India Real Estate Link

In a sign of the times, the country’s third largest real estate player, Housing Development and Infrastructure Limited (HDIL), has offered to sell off three of its plots totalling about 4.5 million square feet.
Analysts say the rare move shows the extent of liquidity crunch in the realty market where no developer normally takes the extreme step of off-loading valuable land stock.
The plots along with their potential Floor Space Index amounts to 1.5 million square feet saleable land at Andheri, 2.5 million sq ft at Kurla and 63,000 square feet at Carmichael Road in the upmarket Malabar hill area. At present, the Carmichael Road plot houses a bungalow.
The Kurla plot is a portion of the 53 acre land acquired by HDIL to rehabilitate 20,000 of the 85,000 slum-dwellers’ families, in Phase I of the massive Mumbai Airport Slum Rehabilitation project.
Earlier this year, HDIL had raised money through debts to purchase the Premier Automobiles Kurla land from an IFLS affiliate at Rs 1,900 crore.
The current debt of the listed real estate company, which is also one of the largest landowners in Mumbai, stands at over Rs 3,000 crore.
Sarang Wadhwan, HDIL managing director, brushed aside any co-relation between the debt and the proposed land sale. “It’s just a business move where we are planning to offload some land as a means of revenue. We are trying to raise money for the airport land rehabilitation. At present, work is on as per schedule at 125 of the 190 buildings,” he said.
Wadhwan refused to comment on how much money he expected to raise from the land sales. On whether the land would have any takers in the present market, he said, “The market is seeing a correction and there will definitely be no problem in getting buyers.”
Realty analysts state that HDIL’s move is just the tip of the iceberg in the real estate industry which has been aggressively acquiring land over the past few years. According to Akshaye Kumar, CEO of Parklane Property Consultants, over the last few months, a significant number of developers have put up a few sites on their portfolio for sale. “Historically, developers never sell land. Even when the previous real estate crash happened, there was only an odd developer who put up his land for sale. But this time, considering the asset-rich cash-strapped scenario, such a step might be unusual but not surprising,” said Kumar.
Amol Shimpi, national director for land sales at Colliers International, added, “Developers would not have done this during normal times. But with the tight cash flow, developers have more stock than they can build. A few have recently approached us to put up their land for sale; several others are expected to follow suit.”