Bengaluru-based developer Prestige Estates Projects is in talks to enter into a partnership with Mumbai’s Nirmal Lifestyle to jointly develop a 1 million sq ft mall in Mulund suburb of Mumbai, two persons familiar with the development said.
As part of Rs 1,000-crore agreement, Prestige will pay 50% upfront to Nirmal, while the balance amount will be invested in the project that has been a non-starter for the last couple of years.
“The deal is being discussed right now and the numbers may change slightly depending on the final terms being offered and agreed upon. The asset is likely to be valued at around Rs 1,800 crore,” said one of the persons mentioned above.
ET’s separate email queries to both Nirmal and Prestige Estates Projects remained unanswered till the time of going to press. Prestige Estates Projects has been looking to acquire malls across major cities to expand its rental income base. Earlier this month, ET reported that the company is in talks to buy out malls across Pune and Mumbai, which will also mark its foray into these cities.
Earlier this year, Prestige group acquired Singapore-based CapIta-Land’s stake in five mall projects in Hyderabad, Mangaluru, Mysuru and Udaipur. The buyout includes a mall management company operating Oakwood serviced Residences in Bengaluru and under construction properties in Kochi.
The company has 48 million sq ft of upcoming projects across assets classes and holds a land bank of 424 acres with potential developable area of over 42 million sq ft.
Nirmal Lifestyle has been looking to monetize its land parcels on Mulund’s LBS Marg for more than a year. It was keen on a joint development pact as it would help the company get future revenues apart from an upfront payment.
Nirmal has so far entered joint development and development management agreements with Godrej Properties, L&T Realty and Shapoorji Pallonji Real Estate. It has also sold a 3.2 acre land parcel to Piramal Realty for Rs 153 crores.
In late 2016, the Debt Recovery Tribunal (DRT) had directed Nirmal Lifestyle to freeze the sale of its properties and to disclose all movable and immovable assets in response a petition filed by IDBI Trusteeship Services in relation to the company’s dues to Kotak Realty Fund.