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Bangalore-based real estate developer Sobha Ltd has completed a Rs 121 crore payment to Gurgaon-based Chintels India Pvt Ltd for land within their joint venture project, Sobha International City. This transaction involves two separate land parcels of 2 acres and 5.8 acres and includes a stamp duty payment of approximately Rs 8.5 crore. The land in question, situated in Babupur village near Dwarka Expressway, is part of the ongoing partnership between the two companies for the development of International City. This deal follows Sobha's record-breaking performance in Q2 2023, with the highest-ever quarterly sale value of Rs 1,724 crore.
The 5.7-acre plot, designated as the commercial portion of the licensed land known as International City, was transferred to Sobha in December 2023. Chintels India's VP, JN Yadav, clarified that no consideration was received, as this was always part of Sobha's allocation. The 2.06-acre plot, initially allocated to Chintels for the clubhouse of International City, has now been transferred to Sobha. These transactions, part of the existing Joint Development Agreement (JDA), recently concluded post the fulfillment of mutual obligations, according to Yadav.
The deal comes after Chintels India faced controversy in February 2022 when six floors of Tower D in the Chintels Paradiso housing complex collapsed in Sector 109, Gurugram, resulting in two fatalities. Subsequently, a structural safety audit declared five out of nine towers "unsafe to live." Despite this, the recent land transfer is unrelated to the Chintels Paradiso project, involving different land parcels under the International City development.
Sobha's strong performance in the first half of the year, achieving a real estate sale value of approximately Rs 3,188 crore and 3.08 million square feet, marked its best-ever period. In the July-September quarter, Sobha reached its highest quarterly sale value of Rs 1,724 crore and 1.69 million square feet, marking the ninth consecutive quarter of improved presales. The National Capital Region (NCR) continued to witness significant demand, contributing around 20.6% to Sobha's sales.
Sobha emphasized its robust pipeline, with plans to launch approximately 6-7 million square feet in the current financial year. Despite potential delays due to upcoming elections, the company anticipates a steady economic environment and strong demand in the residential sector. The heightened interest in real estate is attributed to India's steady economic growth and the proximity of the interest rate cycle to its peak, as stated in Sobha's Q2FY24 earnings call.
The joint venture's land transaction aligns with the increasing appeal of the Dwarka Expressway, a 26.7 km corridor connecting Dwarka in New Delhi to the Kherki Dhaula toll plaza on NH-48 in Gurugram. This area has become a sought-after micro market, witnessing numerous new projects.
In conclusion, the land deal between Sobha and Chintels India for International City exemplifies continued collaboration and commitment to real estate development despite industry challenges, marking a significant transaction in the dynamic landscape of the National Capital Region.
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