MUMBAI: A Bombay HC interim order last week has paved the way for the biggest deal in Mumbai for a single building. The deal between global real estate investor Blackstone and Radius Developers for the building in Bandra-Kurla Complex (BKC) is believed to be worth nearly Rs2,500 crore.
Blackstone will pick up a 60% stake in Wing A of One BKC, sources told TOI. The 18-storey building has around 6.5 lakh sq ft of space on lease. Tenants in this wing include Bank of America, Facebook, Amazon, JLL, ICICI Prudential, Cushman & Wakefield, Brookfield, Cisco and Trafigura. The last biggest commercial property transaction in Mumbai was in 2015 when Abbot India paid Rs 1,479 crore to Godrej Properties for 4.35 lakh sq ft space in Godrej BKC inside the BKC enclave.
The One BKC deal has been stuck for a few months owing to a dispute between Radius and MMRDA over payment for additional construction rights. MMRDA controls all lands in BKC. The HC, in its order of March 27, resolved the issue and directed MMRDA to issue an NOC and part occupation certificate to the building within seven days of the builder making the payment.
Radius will repay the Rs1,700-crore loan taken from Indiabulls Housing Finance in 2017, while Rs 541 crore will be paid to MMRDA for the extra FSI it had purchased to construct the tower.
When contacted, Radius MD Sanjay Chhabria refused to comment. People tracking the deal said the MoU has been signed but the deal hadn’t been registered because of the legal case. “This is the largest transaction in the BKC and the biggest, perhaps, in the country for a portion of a commercial building,” said sources.
One BKC has three wings and about 1.5 million sq ft of space. Of this, 6.5 lakh sq ft of Wing A is planned to be sold. Blackstone currently manages US $119 billion of equity for real estate investments.
Chhabria got the 2.5-acre One BKC property as part of a division of assets with Wadhwa Group some years ago. The developer was to pay Rs 984 crore to MMRDA for the additional FSI over five years.
However, due to the delay in paying a portion of the premium by the builder, MMRDA calculated the remaining amount to be paid at Rs 782 crore. Radius challenged this amount, stating it owed MMRDA Rs 541 crore. A HC bench of justices Ranjit More and Bharati Dangre last week ruled in the builder’s favour.
However, in its interim order, the court said the payment of this amount by the builder and issuance of permissions by MMRDA will be subject to the final outcome of the writ petition filed by the builder. Radius has challenged the penal interest rate levied by MMRDA.
The last biggest commercial property transaction in Mumbai was in 2015 when pharma firm Abbot India paid Rs 1,479 crore to Godrej Properties for 4.35 lakh sq ft space in Godrej BKC situated inside the BKC enclave. In January 2006, Reliance bid a record-breaking Rs 1,104 crore for an 18-acre plot in BKC, where it is currently building its convention centre.