MUMBAI: Tata Steel’s 25-acre land in Borivali received five bids from Mumbai’s top corporates and developers. The deal is expected to rake in Rs 1,000 crore for the company, though the buyer will have to shell out anywhere between Rs Rs 1500-2,000 crore to acquire and develop the property.
Sources said Tata Housing, Tata Consultancy Services, Oberoi Realty, Kalpataru and Piramal Realty are in the race.
Due diligence on
An official privy to the development said: “The bids have been opened and due diligence is on. Over the next three months, the highest qualifying bidder would have to pay 10 per cent of the bid amount, and the balance over the next three months.” The land is located close to the Western Express Highway, in Borivali, a Mumbai suburb, and housed Tata Steel’s manufacturing facility, which was shut down in 2009.
One of the conditions set by Tata Steel for the sale was that the bidders should have a net worth of at least Rs 100 crore. Sources said the land development potential could stretch from 2.5 million square feet to 4 million square feet depending on the space allotted for parking.
Accordingly, the development cost of 2.5 million square feet would be in the range of Rs 1,500 crore, while developing four million square feet with parking, would be around Rs 2,000 crore. These include other costs as well.
While Tata Steel declined to comment on the status of the transaction, real estate consultancy Knight Frank, which has been roped in to mandate the deal, said that it was too early to comment.
No word on deal
“Given the sensitivity of such a large deal, we would be unable to comment on the bid status at this point,” Knight Frank Country Head and Managing Director Shishir Baijal told Business Line.
Tata Housing said that while the company has not signed any new deal yet, it has aggressive growth plans for the next three-five years.
In separate e-mail statements, spokespersons of TCS, Piramal Realty and Kalpataru refused to comment. Oberoi Realty’s management remained unavailable for comment.