Peninsula buys 5-acre Byculla mill for Rs 600cr

MUMBAI: In a deal signalling the realty market's appetite for clear land parcels, Peninsula Land Ltd, an Ashok Piramal Group company, has purchased the defunct five-acre Great Eastern Spinning and Weaving Company Ltd in Byculla for more than Rs 600 crore, or more than Rs 120 crore an acre.
The Ashok Piramal Group company is learnt to have signed a memorandum of understanding with Mahindra Lifespaces and the Kanoria family, who jointly own the mill.A formal sale agreement is to be signed later this year.
Piramal beat three competitors-Lodha Group, Vallabh Sheth group and Piramal Realty-and bagged the deal.
Rajeev Piramal, managing director and vice-chairman of Peninsula Land Ltd, declined to comment, while an email to Mahindra Lifespaces did not elicit any response. Cushman and Wakefield, advisors in the deal, also declined to comment.
This is the second property purchased by Peninsula. In 2011, it had bought Bishopsgate, a five-storey residential building co-owned by Standard Chartered and the HSBC Ltd in Breach Candy for Rs 272 crore.
Situated near Jijamata Udyan on Dr Ambedkar Road, the mill is spread across five acres with a development potential of about 6 lakh sq ft. Considering the location, on the main Dr Ambedkar road and Jijamata Udyan the developer will construct high-end residential apartments. Flats in this area are currently quoted at over Rs 25,000 per sq ft.
The Byculla mill is among the earliest defunct textile mills that opened up for development following a state decision in 1991. On July 14, 1995, the Kanorias entered into a joint venture agreement with Mahindra and Mahindra to develop the land.
According to the agreement, Mahindra gave an advance in excess of Rs 35 crore to the Kanorias to fulfill certain formalities and also formed a firm Mahindra Gesco. But differences arose and an arbitrator was appointed by the Bombay high court. Both parties ended their differences by filing consent terms in court.