News | Oct 12, 2022
Realty developer Rustomjee Group has entered into an agreement to jointly develop a nearly 2 million sq ft affordable residential project on a 12-acre land parcel in Kalyan, near Mumbai. The deal marks Rustomjee Group’s foray into the eastern region on the outskirts of Mumbai.
The company, which is currently in the process of raising funds through its initial public offer (IPO), is planning to invest over Rs 500 crore to develop the project that will be completed in the next five years.
As part of the agreement, the developer will be sharing 21% of the developed built-up space of the proposed project with the landlords as their compensation.
Rustomjee Group has entered into this development agreement with three local landlords through one of its subsidiaries, Keyblue Realtors, that will undertake the execution of the proposed project.
In addition to the built-up space in the said project, Keyblue Realtors will also be paying Rs 20 crore to these land owners as a refundable deposit. The agreement was executed and registered on September 30, according to the documents accessed through CRE Matrix, a real estate data analytics firm.
Within 45 days of the registration of the joint development agreement, the developer is expected to prepare and submit a tentative master plan for the development of the project to the land owners.
This master plan is expected to comprise the layout of the said land reflecting the location of the buildings, a construction schedule and delivery timelines, and a schedule of permissions and sanctions to be obtained by the land owners.
The Rustomjee Group is planning to develop an affordable housing project on the said land parcel with residential apartments priced between Rs 50 lakh and Rs 75 lakh.
As of March 31, 2022, Keystone Realtors, which operates under the brand Rustomjee, had 32 completed projects, 12 ongoing projects and 19 forthcoming projects across the Mumbai Metropolitan Region (MMR). These include affordable, mid and mass, aspirational, premium and super-premium segments.
It has developed 20.05 million sq ft of high-value and affordable residential buildings, premium gated estates, townships, corporate parks, retail spaces, and various other real estate projects.
Boman Irani, chairman & managing director of Rustomjee Group, declined to comment for this story.
Peripheral areas of Mumbai, the country’s commercial capital, have been witnessing strong interest from real estate developers given the state government’s thrust on infrastructure projects aimed at improving connectivity and making affordable housing available to the rising population.
Last week, deputy chief minister Devendra Fadnavis reinforced the government of Maharashtra’s commitment to developing infrastructure and knowledge-based industries in and around the Neral-Karjat region near Mumbai and to developing Panvel and the Navi Mumbai Airport Influence Notified Area (NAINA) project as Mumbai 3.0.
The MMR has been witnessing a significant demand-supply gap for affordable housing.
According to a Knight Frank India study, the region registered high demand for affordable housing units, with 67% of the demand concentration being registered for units priced less than Rs 25 lakh. The demand concentration for housing units in the range of Rs 25 lakh to Rs 50 lakh was recorded at 13% and units above Rs 50 lakh at 20%.