Published On:February 4 2023
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Oberoi Realty acquires Blue Star’s 9-acre land parcel in Thane’s Pokhran Road.

Property developer Oberoi Realty has acquired air-conditioning and commercial refrigeration company Blue Star India’s 9-acre land parcel in Thane on an outright basis for nearly Rs. 200 crore, said people with direct knowledge of the development.

The land parcel is located on Thane’s Pokhran Road II next to GlaxoSmithKline Pharmaceuticals’ 60-acre land parcel that Oberoi Realty acquired in 2019 for Rs. 890 crore. In May, the developer also entered into an agreement to jointly develop an over 4 million sq ft residential project on an 18.3-acre land parcel in Thane’s Kolshet locality.

“The deal for the Blue Star land parcel was concluded earlier this week. Oberoi Realty is planning to combine the Blue Star India land parcel with the plot it has acquired from GlaxoSmithKline Pharmaceuticals,” said one of the persons mentioned above.

In 2018, ET was first to report that the listed developer is in talks with Blue Star to acquire this land parcel.

In 2015, Blue Star had introduced a voluntary retirement scheme (VRS) for its workmen at the Thane plant. It had then announced that this plant had become non-viable due to various reasons such as high-cost of manufacturing, including local body tax (LBT), leading to losses for four years before that. The plant was closed with effect from August 10, 2015.

Blue Star’s managing director B Thiagarajan had told ET, in an interaction in November 2018, that the company had invited bids for the plot and was negotiating with at least three more entities apart from Oberoi Realty.

The money realised will be used for expansion of the company’s manufacturing facilities, research & development, and digital enterprise initiatives, Thiagarajan had said then, while adding the consideration for the land parcel would be higher than Rs. 150 crore.

Blue Star confirmed the deal. “Lump sum consideration of Rs. 192.31 crores (Net consideration after transaction cost Rs.170.82 crores),” the company said in a regulatory filing while referring to the deal size.

Oberoi Realty declined to comment citing a silent period.

Transactions for land parcels have started to gather momentum again with many deals including outright acquisitions and joint ventures in key property markets of Mumbai, Pune, Chennai, Hyderabad, and Bengaluru either being closed or expected to close soon. The increased demand for land parcels is led by sustained recovery in the housing market and buoyed warehousing and data centres space.

In the backdrop of the increasing preference for alliances and joint development of land holdings, this will be one of the few instances of an outright purchase in recent times. Over the past few years, several realty developers have reworked their business strategies to focus on asset-light models, such as joint development, to reduce the upfront capital cost and cope with liquidity pressure.

Over the last few years, Mumbai’s central suburbs and neighbouring Thane’s micro-markets have been emerging as new hotspots for residential developments. Several real estate developers have either acquired land parcels on an outright basis or have entered into agreements to jointly develop plots in these pockets.

Recently, realty developer Runwal Group acquired an over 20-acre land parcel in Thane’s Ghodbunder locality from chemical company PB Global for around Rs. 471 crore.

In 2021, billionaire investor and founder of DMart, Radhakishan Damani, acquired an 8-acre land parcel in Thane from Mondelez India, formerly Cadbury India, for nearly Rs. 250 crore.

In 2019, Singapore-based global investment firm Xander Group’s retail arm Virtuous Retail South Asia (VRSA) acquired about 20 acres in Thane from textiles firm Raymond for over Rs. 710 crore. Prior to that, Godrej Properties had also acquired a 4-acre parcel on Ghodbunder Road to develop a residential project.


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