Sumitomo leases land in Mumbai for over '2k crore

Japan's Sumitomo Corporation Group has concluded a long-term lease agreement for a nearly 3-acre land parcel in Mumbai's Bandra-Kurla Complex with Mumbai Metropolitan Region Development Authority (MMRDA) for over ₹2,067 crore. Goisu Realty, a subsidiary of Sumitomo Realty & Development Company, has picked up the land parcel through an 80-year lease agreement. It emerged as the highest bidder for the plot in 2019 but conclusion of the deal has taken more than four years.

This was the first land parcel auctioned by the authority after a gap of over 12 years since 2007. During this period, it had only allotted a few plots to some government entities. The company has paid over ₹111 crore as stamp duty alone for the registration of the deal that took place on September 3, showed documents accessed through CRE Matrix.

MMRDA is engaged in long-term planning and implementation of strategic projects and financing of infrastructure development in Mumbai Metropolitan Region (MMR). According to property consultants, the Bandra-Kurla Complex continues to be a sought-after business district in Mumbai that could attract a number of large global and domestic entities.

MMRDA is looking to raise an additional ₹3,000 crore through monetisation of its land parcels in BKC in the next few months. It has already invited bids to lease out two more plots in G block of the business district. The authority is also planning to monetise more plots in various sizes in Mumbai soon to finance several ongoing and planned infrastructure and transportation projects in the MMR. However, it is awaiting clarity on a policy related to purchase of additional floor space index (FSI) by successful bidders of the plots.

A committee on the FSI premium policy has already submitted its report, which is being examined by the Urban Development Department. ET's email query to Sumitomo Corporation remained unanswered until the time of going to press. MMRDA declined to comment.

Recently, Goisu Realty entered into an agreement with Wadia Group entity, Bombay Dyeing & Manufacturing Co, to buy an around 22- acre land parcel in Mumbai's Worli locality along with its FSI for a total of ₹5,200 crore.

The transaction with Sumitomo will be completed in two phases, including the first tranche of ₹4,675 crore. The balance ₹525 crore will be received upon completion of certain conditions by Bombay Dyeing and execution and consummation of the definitive agreements for the second phase.