Skyline sells rights to provide exit to RIL-backed Urban Infra Venture Cap
Mumbai: Realty developer Kanakia Group has bought development rights for 0.5 million sq ft on a Powai land parcel for .₹ 400 crore. Skyline, the local developer, which has sold these rights, will be providing an exit route to Reliance Industries-backed fund Urban Infrastructure Venture Capital, said two persons familiar with the development.
Urban Infrastructure had invested in this special purpose vehicle in 2011 and will get .₹ 275 crore through this transaction. “First part of this transaction has been concluded with the agreement between Kanakia Group and Skyline being inked a week ago. The second part of the transaction, relating to the Urban Infrastructure’s proposed exit, is being discussed with promoters,” said one of the persons mentioned above.
The deal will be financed by Kanakia Group through its internal accruals and the first tranche of the payment has already been made, he said. Kanakia Group and Skyline Group declined to comment on the story, while an email query to Urban Infrastructure Venture Capital remained unanswered till press time. Skyline Group had planned a total development of 1.5 million sq ft on the land parcel spread across 12 acres close to Hiranandani Hospital in Powai. Kanakia will now undertake around one-third of this total planned development, while the rest will be with Skyline. The fund Urban Infrastructure Venture Capital will exit the project completely.
As per the agreement, both Kanakia and Skyline will manage their approvals separately apart from marketing and execution of the project. Kanakia has already started the process of getting development permissions and has submitted its plans to the civic authority. The developer is looking to launch the project in the next six months. Currently, Kanakia Group is developing total 3.5 million sq ft of area through seven projects spread across Mumbai.
At present, residential property prices in the vicinity range between .₹ 16,000 and .₹ 17,000 per sq ft. With Powai gaining importance as a startup hub, realty developers are eyeing this zone as a high-potential residential micro market.