Larsen and Toubro (L&T), the $14-billion engineering and construction conglomerate, is seeking to monetise its land holdings through a mix of sales and development projects, starting with a proposed sale of the land earmarked for its abandoned SEZ project.
The 30-acre plot in Chennai, which was to be developed into an SEZ, has been put on the block, people familiar with the development told FE. In addition a 5-acre strip in Kattupakkam, a suburban area of Chennai, that housed an assembling unit of the company’s shipping venture but is no longer in use is also up for sale.
?With lack of clarity on SEZs, the company has decided against developing the large land parcel and instead has decided to sell it completely to an end user,? said an industry source. In March, L&T Chennai Projects, had asked the government for de-notification of the SEZ, citing the global recession in the IT/ITES sector. As for the 5-acre parcel, sources say the company has already started receiving interests. The names of the interested parties could not be immediately known.
The broad strategy being followed by the company through its real estate arm ? L&T Realty ? is to sell land parcels below 10 acres owned by the conglomerate and develop parcels above 10 acres on its own or through a joint venture. However, decisions on specific parcels of land will be taken on a case-to-case basis.
Last year, L&T had set a target of raising Rs 300 crore by selling land parcels, of which it achieved a little over half of about Rs 163-Rs 171 crore, according to real estate industry sources.
The sales that went through included 1 acre parcel off Mount Road in the central business district of Chennai, purchased by a manufacturer of pharmaceutical formulations Tablets India for Rs 88 crore. This was L&T’s regional headquarters for about 70 years, but as it moved its operations to Manapakkam, a southwest suburban area along Mount Poonamallee Road, the space remained unutilised. A 6-acre parcel housing a training centre was sold for Rs 45-50 crore, and another 6-acre parcel was sold for about Rs 35 crore on GST Road Chennai to Lanco Properties, a local realty developer, say sources.
An email sent to L&T seeking response remained unanswered.
Apart from aggressively selling its spare land holdings, L&T’s plans to develop parcels of land are also gathering steam. At present, L&T is preparing to launch three premium residential projects, two in Mumbai’s suburbs of Powai and Andheri, and one in Chennai. According to sources, the Andheri (West) project is expected to be launched in the next two months.
Sources also say, the first round of sales are currently on for the apartment complex launched in Emerald Isle, Powai, spread over 16 acres. This is the second project L&T in Mumbai, its first was a joint venture with Mumbai-based Omkar Realtors & Developers in central area of Parel.