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DLF sells 17 acres of Mumbai land to Lodha for Rs 2,700 crore

DLF Monday announced sale of 17 acres of prime land in Mumbai to Lodha Developers for Rs 2,700 crore, almost four times higher than the price it had paid in 2005.

Published: 13th August 2012 08:27 PM  |   Last Updated: 14th August 2012 11:30 AM   |  A+A-

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By PTI

In the biggest realty deal in the country this year, DLF Monday announced sale of 17 acres of prime land in Mumbai to Lodha Developers for Rs 2,700 crore, almost four times higher than the price it had paid in 2005.

India's largest real esate company DLF had bought the land from National Textile Corporation for Rs 703 crore. It decided to sell this piece of land as part of the strategy to exit from non-core business.

In a statement, DLF said that the company has sold the entire stake in its arm Jwala Real Estate, which owns this land at Worli in Mumbai, for "an enterprise value of about Rs 2,700 crore".

Separately, Lodha Developers said it has entered into an agreement with DLF to acquire the land.

"The acquisition is for a consideration of Rs 1,200 crore for both equity and debentures of the company. In addition, Lodha is also expected to take over about Rs 1,500 crores of liabilities that Jwala has incurred for the development since it purchased the property from NTC in 2005," Mumbai-based Lodha said.

Although DLF has earned Rs 2,000 crore proft on this deal, the valuation is lower than Indiabulls' deal in 2010 for the 8.39 acres of NTC land for Rs 1,580 crore.

"The acquisition is 3-4 times cheaper than deals recently done by other real estate players. At a cost of just over Rs 5,000 per sq ft, this land acquisition gives Lodha significant competitive advantage to build a mixed-use development over 5 million sq ft at the prime location of Worli," Lodha said.

When contacted, DLF Group CFO Ashok Tyagi said: "We have received Rs 500 crore in advance from Lodha. The deal will get completed by October."

On valuations, Tyagi said: "The size of the deal is fair. We have broadly got what we were looking for" and added that the funds would be used to cut debt that currently stands at Rs 22,680 crore.

DLF aims to cut debt by Rs 5,000 crore this fiscal, he said, adding that talks are on for sale of hotel business Amanresorts and wind energy.

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