The project, spread across 14 acres and with saleable area of 2.1 million sq.ft, is going to be developed under a development management agreement.
Under the development management model, large realty firms typically step in as development managers for smaller developers and landowners, in return for a share of the revenue, share of profit or a management fee. Mumbai-based Godrej Properties has entered into similar partnership models in many instances in the past.
In the Thane project, Godrej Properties will build homes of various configurations along with a small retail component to support residential development.
“We are happy to add this new project in Thane, a key micro market of Mumbai. This strengthens our development portfolio in Thane and fits well with our strategy of deepening our presence in key markets across India’s leading cities,” Pirojsha Godrej, executive chairman, Godrej Properties, said in a statement.
Dharmesh Jain, chairman and managing director, Nirmal, said, “This partnership is special to us considering the incredible brand Godrej is.”
Nirmal, which owns the land in Mulund, brought in L&T Realty to develop the residential project.
Mid-sized developers like Nirmal, which have land assets but may not have the bandwidth to develop it entirely on its own, have been in talks with larger developers to enter into development agreements to monetize land parcels and reduce debt.
The prolonged slowdown in the real estate sector has thrown up several so-called distressed opportunities for established firms such as Godrej Properties.
Between April and July, Godrej Properties signed up for land parcels—three in the National Capital Region (NCR) and one in Bengaluru. These were a mix of outright buys and joint development deals. Before the Nirmal deal, Godrej bought a 14.8-acre land on Dwarka Expressway from BPTP under the Godrej Residential Investment Program II (GRIP-II), a $275 million fund.
“There are developers who are selling because of liquidity issues but the expectations are now realistic. It’s a buyer’s market,” Mohit Malhotra, managing director and chief executive, Godrej Properties, told Mint in an interview in July.