The Prestige Group has acquired a 2.3-acre land parcel in central Mumbai from a DB Realty subsidiary for Rs 704 crore.
The land parcel located at Bhuleshwar, towards south Mumbai, was acquired by Prestige Projects, a subsidiary of Prestige Estates Projects from DB Realty’s subsidiary Marine Drive Hospitality & Realty.
According to the registration documents made available by real estate data analytics firm CRE Matrix, the DB Realty subsidiary had commenced developing a residential project on the land, but it was not approved by the Brihanmumbai Municipal Corporation. The company had taken loans from lenders such as Edelweiss Asset Construction, RARE Asset Construction, and Edelweiss Finvest by creating a mortgage on the property. With a view to repaying the debt and reducing its total indebtedness, the company has sold off the land and is using the money raised to repay the lenders.
About 20 flats were sold in the project but the purchases have been cancelled and the flat-holders have been refunded the amounts collected.
DB Realty has defaulted on debt repayments to banks. In a filing to the exchanges last week, the company put its total outstanding debt obligations at Rs 1,000 crore.
In May, Prestige Estates had bought out DB Realty’s stake in two joint commercial projects in Mumbai for Rs 1,176.5 crore. These projects are in the business district of Bandra Kurla Complex and Mahalakshmi.
Prestige Estates entered Mumbai in 2021. In FY23, of the Rs 13,000 crore of sales reported, about 21 per cent was contributed by Mumbai. It expects the city will have a higher contribution going forward. It has two projects coming up for launch in Mumbai and next phase of an existing project in Mulund.