Piramals close to buying DB Realty's Marine Drive plot

Piramal Realty, an Ajay Piramal group company, is set to take over DB Realty’s Marine Drive project in Mumbai for close to Rs 1,000 crore, a top company official confirmed Monay.  

The Piramal company will use the 2.2-acre plot to construct a multi-storey residential tower.

“(It is) more or less a done deal. What we are working on now is to get permission from the government to construct the residential tower,” a top Piramal official said.  

DB Realty had planned a 126-storey 5-star hotel that failed to go through due to various legal issues involving the company’s promoters and a slowdown in the real estate sector.

DB Realty was trading flat at Rs 52.60 a share in Monday morning trades. 

The plot is behind heritage buildings on Marine Drive and will therefore not be subjected to height restrictions, said the official, on condition of anonymity. 

Piramal Realty's investment in land parcels comes in the midst of a crippling slowdown in the real estate sector; the group is bullish on the realty sector. With investments of close to $3 billion in the sector, the realty division has emerged as the second-largest investors in the sector after HDFC. 

Apart from investing in the Marine Drive project, the company is constructing a luxurious residential project in Byculla, a commercial complex in Kurla and residential projects in Thane and Mulund. 

The company recently received equity funding from Warburg Pincus and Goldman Sachs, with Warburg investing close to Rs 1,800 crore and Goldman investing Rs 900 crore. The investments were made in July this year at a time when real estate prices are not showing any signs of a pick-up and demand in Mumbai is declining. 

Piramal officials said the investments by Warburg and Goldman is the biggest FDI in the real estate sector in recent times, and reflects the sector's potential. 

“With the Indian economy growing at the rate of 7-8%, we will double our economy in the next nine years and demand for real estate will pick up as developers reduce prices,” said the official.