Mahindra Lifespaces to buy land parcels with Rs. 3k-crore sales value.

Realty firm Mahindra Lifespace Developers is looking to acquire a few land parcels this fiscal to build housing projects with sales potential of Rs. 3,000-4,000 crore, a top company official said.

The company will acquire these land parcels either through outright purchase or by forming Joint Development Agreements (JDAs) with landowners.

Mumbai-based Mahindra Lifespace Developers Ltd, part of Mahindra Group, is one of the leading real estate players in the country. The company's market cap recently touched USD 1 billion (about Rs. 8,000 crore).

In an interview with PTI, the company's Managing Director (MD) and Chief Executive Officer (CEO) Arvind Subramanian said Mahindra Lifespace is looking to acquire new land parcels for business expansion in three focus cities -- Mumbai Metropolitan Region (MMR), Pune and Bengaluru.

He highlighted that the company already acquired a land parcel this fiscal that has a Gross Development Value (GDV) of Rs 1,700 crore and the deal pipelines are strong.

"Last year, I had set a guidance of Rs 2,500 crore worth of new land acquisition. All these numbers are GDV, so the sales value of the new land that we acquire and not the cost of land acquisition. We did Rs 3,800 crore last fiscal year and this year we have already done Rs. 1,700 crore. We will certainly be doing at least an equivalent amount in the rest of the year," Subramanian said.

In terms of the GDV, he said the new land acquisition should be in Rs. 3,000-4,000 crore range and the company was well above the guidance in creating new business development opportunities.

Mahindra Lifespace Developers in July informed about acquisition of a new land parcel in Pune, which has a development potential of 2.1 million square feet with an estimated sales value of Rs. 1,700 crore.

On increasing competition among large players for land acquisition, Subramanian said: "There is a lot of heightened interest in land and developers are getting very active. But at the same time the landowners have also become much more selective about which developers they want to do business with..."

Five years back, he said, landowners would simply give land to whoever give the highest, bid but not any more.

"Now landowners realise that people may have given the highest bid but they are not able to complete the transaction because they are not able to get financial closure. So many landowners are saying: look, I will only do business with a larger, more well-established developer, corporate developers so that I can have surety that my deal will get completed," Subramanian said.

BS