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Feb 23, 2011, 09.52 PM IST
Oberoi Realty is learnt to be in advanced talks with HDIL for purchase of transfer of development rights (TDR). The price that is being negotiated at Rs 2,100-2,400 per square foot indicates stress on TDR pricing. CNBC-TV18's Priyanka Ghosh gives a lowdown.
Oberoi Realty is negotiating with HDIL to buy its transfer of development rights(TDR), reports CNBC-TV18's Priyanka Ghosh, quoting sources familiar with the deal. Transfer of Development Rights (TDR) means making available certain amount of additional built up area in lieu of the area relinquished or surrendered by the owner of the land. The deal is likely to happen at Rs 2,100-2400 per square foot, indicating pressure on TDR prices.
HDIL in each of the three quarters of this financial year, has sold one million square foot and prices have held up at around Rs 3,000 per square foot.
Oberoi Realty has been negotiating this deal between Rs 2,200-2,400 for a long time but many media reports were suggesting that it is perhaps DB Realty , which is a stressed out company and therefore is selling at a distressed valuation.
But sources inform CNBC-TV18 that HDIL, which is the largest player in the market, is indeed in advanced talks to sell TDR for about Rs 2,100-2,400 a sq ft—an amount lower than the market value.
Oberoi Realty is cash rich and is likely to purchase three lakh square feet for two projects. HDIL is in the market to raise funds and has a debt of about Rs 4,000 crore. If this deal happens, HDIL would get Rs 60-70 crore upfront. The deal, however, would be struck at a lower rate than they would have otherwise agreed upon.
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