DELHI: Realty firm Parsvnath Developers has dropped its plan to sell a prime land in Connaught Place and will now develop a commercial building on the plot at a cost of around Rs 70 crore to achieve better sales realisation and brand value.
The company is expecting a sales realisation of over Rs 1,000 crore from its commercial project on Kasturba Gandhi Marg near Connaught Place with saleable/leasable area of 1.3 lakh sq ft.
Parsvnath had acquired 1.18 acre of commercial plot at KG Marg in 2008 for Rs 212 crore. By 2011-end, the company had put this plot on block for about Rs 700 crore and had even appointed consultant Jones Lang LaSalle to find buyers.
"In 2011, we had decided to monetise this asset and received a couple of bids as well. But, later we changed our mind as owning a property in Connaught Place is an opportunity once in a life time," Parsvnath Developers Chairman Pradeep Jain told reporters here.
He also said that the development of this project would help in achieving higher sales realisation of over Rs 1,000 crore compared with outright sale of plot and also lead to enhancement of company's brand value globally.
On project cost, Jain said: "We had bought this prime land for Rs 212 crore and will invest another Rs 70 crore on construction".
The construction of the project has started from today and will be completed in the next 18 months. The commercial building will have a salebale area of 1.3 lakh sq ft, of which 40,000 sq ft will be retail and the rest will be office space.
The company would prefer offering commercial space to big corporates and retail chains, he said, adding, the area currently commands a monthly rental of Rs 400-450 per sq ft.
Jain said the company would utilise the sales realisation from this project to reduce net debt, which currently stands at about Rs 1,200 crore. "We are targeting to bring our debt to well below Rs 1,000 crore by end of this fiscal".
The company has significant presence in the national capital. It has two housing projects and several shopping malls at metro stations across the city.
That apart, it has recently completed an office building on Bhai Veer Singh Marg near Gole Market here with an investment of Rs 225 crore.
Moreover, the company had bought 38 acres of land near Sarai Rohilla from the Railways in 2010 for Rs 1,651 crore. It is in the process of acquiring government's approval to develop this high-end project.