L&T Realty, the real estate development division of engineering giant Larsen & Toubro, has signed an agreement with Jagdale Infrastructure for the joint development of a 12.2-acre land parcel in Thane’s Panchpakhadi area. This collaboration marks a significant step in the rehabilitation of a large slum area, with a development potential exceeding 3.12 million square feet.
The project, which involves the redevelopment of over 20 slum pockets, is anticipated to be completed within five years. In 2022, Jagdale Infrastructure received a letter of intent from the Slum Rehabilitation Authority, and L&T Realty has now been brought on board as a partner.
Under the terms of the agreement, L&T Realty will take the lead on the project, securing a 69% share of the profits, with Jagdale Infrastructure receiving the remaining 31%. Documents accessed via CRE Matrix estimate L&T Realty’s profit share at approximately Rs 698 crore, while Jagdale Infrastructure is projected to earn around Rs 303 crore.
L&T Realty executed the joint development agreement through its subsidiary, L&T Parel Project, and paid over Rs 34.88 crore in stamp duty for the transaction's registration on May 7. The land, originally owned by the Maharashtra government, was designated as a slum rehabilitation area under the Maharashtra Slum Area (Improvement, Clearance & Development) Act, 1971, as of an October 2016 notification.
The site is currently occupied by slum dwellers organized into more than 20 societies, with the rehabilitation component expected to cover over 1.2 million square feet. L&T Realty will manage the design, development, construction, completion, marketing, branding, and sale of the free-sale component of the project. The necessary floor space index for this component will be generated through the proportional rehab component. L&T Realty will also oversee the approvals and construction related to the rehabilitation responsibilities of its partner.
Despite efforts, ET's email inquiries to both L&T Realty and Jagdale Infrastructure remained unanswered at the time of publication. Joint development and redevelopment projects are vital to the dynamics of property markets, particularly as land prices rise and the availability of vacant parcels diminishes in major urban areas. These initiatives offer innovative solutions for optimizing land use, revitalizing existing properties, and efficiently utilizing limited space, thereby sustaining the growth and vibrancy of urban real estate markets.
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