5 things about Radhakrishna Damani's record Mumbai property deal worth Rs 1,238 crore

Radhakishan Damani (File Image)

To begin with, 28 housing units worth Rs 1,238 crore were bought by family members and associates of Radhakrishna Damani, the founder of Avenue Supermarts, which runs the D’Mart chain of stores, in Mumbai last week in perhaps the biggest property deal in the country.

The total carpet area bought by one of India’s top retailers, his associates and companies amounts to 182,084 square feet, including 101 slots for car parking. All the transactions were registered on February 3, 2023. Most of these apartments have a carpet area of 5,000 sq ft, and cost Rs 40-50 crore on average, property registration documents accessed by Zapkey.com showed.

The total stamp duty paid was Rs 74.28 crore, the documents showed.

It should be noted that while the Index 2 copies (a document that summarises the registered transaction) for all the 28 transactions are available, the agreement copies have not yet been uploaded.

Where is the project located? 

The buyers have taken apartments in Tower B of Three Sixty West located on Annie Besant Road in Worli, Mumbai. Three Sixty West by Oberoi Realty is a project that contains 4BHK and 5BHK units. It comprises two towers.  Tower A has 66 floors with 28 apartments, while Tower B has 90 floors and 256 units.

The sea-view project presumably gets its name because its height is 360 metres, and all apartments face the west. One tower houses a Ritz-Carlton hotel, and the other apartments managed by the hotel chain.

The people behind the deal

Mumbai-based brokers said that while consultants were approached, there were probably no brokers involved in the deal and that this may have been a direct deal. They said that the last deal registered in this project was at Rs 1.23 lakh per sq ft on carpet area. A price of  around Rs 70,000 per sq ft (base price) at an almost 20 percent discount could have been agreed to as there was pressure on Sudhakar Shetty, one of the co-owners, to repay loans.

The ownership

The project is registered under the name Oasis Realty and had four promoters: Skylark Buildcon Pvt Ltd, Shree Vrunda Enterprises, both part of Shetty’s Sahana Group, and Oberoi Constructions Ltd and Astir Realty LLP, which are promoted by Vikas Oberoi. The seller is builder Shetty, who had partnered with Oberoi to redevelop the project.

Skylark had taken a loan of Rs 1,000 crore from DHFL (now Piramal Finance) in 2019 at an interest rate of 14.22 percent and a tenure of 72 months (48-month moratorium and 24-month repayment period). Units in Oberoi 360 West were provided as collateral, according to data provided by Propstack.

Real estate brokers said the bulk deal appears have been entered into to bail out Shetty.

Market experts said luxury apartments in Worli usually sell at a price of Rs 90,000-1.05 lakh per sq ft. The flats sold in the Damani deal indicate a price range of around Rs 70,000 per sq ft (base price).

Brokers say they expect strong closure of the remaining units in the project at rates above the current deal and the last registered deal, adding that they expect sales momentum to pick up.

Are bulk deals common?

As per documents shared by Zapkey.com, in 2021, HDFC had bought 70 apartments for Rs 639 core from developer Rustomjee in a project in Prabhadevi, Mumbai. Real estate consultants said that this deal was different in the sense that these units were not bought for personal use or to trade in housing stock but was one of the ways to attain financial closure.

Why now?

Real estate experts say that the deal comes close on the heels of a provision in Budget 2023 proposals that was expected to have an impact on the sale of ultra-luxury properties from April 1. A Rs 10-crore cap has been imposed on the reinvestment of capital gains from the sale of long-term assets, including housing property. No such cap is applicable at the moment, they said.

It should also be noted that if the buyers of these units were to resell the units, the buyer would only have to pay the differential stamp duty and not the full amount. This is because in March 2022, the Maharashtra government had decided to extend stamp duty waivers from one year to three years for resale properties. Before this decision, if an investor bought an apartment and sold it within a year, the stamp duty was charged only on the price difference between the purchase and the selling price. The bill passed in the state assembly last year, explaining the rationale of extending the waiver, said that the one-year period did not help earn profits as reselling properties became difficult during the pandemic.