Unitech lines up Rs 4000 cr for Mumbai foray

Unitech, the country's second largest realty developer by market capitalisation, will foray into the Mumbai real estate market with a commercial project spread over 80 acres near Bandra Kurla Complex.

The company will invest nearly Rs 4,000 crore over the next three years for the first phase of the project comprising three million sq ft, which will eventually be scaled up to 8-9 million sq ft.

The first phase could yield Rs 1,200 crore as rentals annually, if one were to go by the prevailing market rate of Rs 350 per square feet a month near the project site.

It is believed that Unitech has acquired 50 per cent stake in a special purpose vehicle of a Mumbai-based private builder. "The land belonged to this SPV in which Unitech has now acquired 50 per cent stake. The project will be developed solely by Unitech, but the profits will obviously be shared," said a source close to the development.

"We have strong plans of entering Mumbai with various development projects," said Sanjay Chandra, managing director, Unitech. However, he declined further comment.

Sources told Business Standard that the commercial project has been inspired by Canary Wharf, London's newest business hub.

In fact, Canary Wharf architects have been roped in for the project.

Last September, Unitech had disclosed a land bank of nearly 11,000 acres. Since then, this has grown to nearly 20,000 acres with a developable area of 850-900 million sq ft. The company will deliver around 15 million sq ft by year-end and plans to double it to 30 million sq ft next year.

Unitech's current net debt stands at Rs 4,500 crore, which is likely to reach to Rs 8,000 crore by March 2008.