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TVS to raise Rs 200 cr via land sale.

Posted on: March 2, 2009

A big-ticket land deal, which could fetch as much as Rs 200 crore, is underway at Chennai’s posh Boat Club Road. The land parcel of 31.9 grounds, owned by TVS-group firms, is expected to bring in Rs 6 crore per ground (1 ground = 2,400 sq ft), realty sources confirmed to ET.

It is learnt that the land parcels are owned by TVS Motor, TVS Electronics, TVS Investments and other associate firms, managed by brothers Venu and Gopal Srinivasan. The deal is being directly handled by the officials of the companies. Group sources did not want to comment on the deal.

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It is learnt that Gopal Srinivasan is directly handling it by banking
on his contacts in Chennai’s business circle. The sale process began about three weeks back, when the elite circle of the metro’s high-profile buyers were intimated about it. Of the 40-odd parties sounded out, eight to nine have evinced interest, sources said.

To facilitate easy transfer of the corporate ownership of the land parcels in the primarily residential area, they has been split into five plots. It is also viewed as a strategy to woo high-net worth individuals given the fact that real estate prices are perceived to be heading south, sources say. The plot sizes of the ‘L’-shaped property range from 4 to 10.5 grounds.

All the same, TVS firms are also keeping the option of going for a block deal, if they get a good offer. In value terms, the deal would set a new benchmark as compared with the last few deals clinched between 2005 and 2007 in the Boat Club area.

Earlier, two deals (Rs 42 crore and Rs 80 crore) were struck by the Maran brothers, while Mukesh Ambani’s brother-in-law Shyam Kothari bought 2.4 acre in 2007 for Rs 175 crore. The last high-value transaction in Boat Club was concluded at Rs 5 crore per ground.

According to the sources, eight of the interested parties include some influential businessmen and high-net worth individuals. It is being marketed as a ‘vaastu’-compliant site. The other special feature mentioned is the largest open space available in the area with exclusive private access away from the main road.

Lease rentals in the upmarket location range between Rs 80,000 and Rs 2.50 lakh per month depending on the size of the houses/flats. As part of the efforts to abide by the regulations of the Adyar Owners’ Association, the interested parties are told that the plots have to be developed only as residential houses.

Also, not more than two residential units and not less than 4,800 sq ft built-up area can be constructed in each plot. With a ground-plus-one dwelling format, each plot has provisions for a garage and servant quarters. Some of the prospective buyers with whom ET spoke to said the maximum price one ground would fetch is Rs 4 crore. A veteran realtor, residing in Boat Club, says “the strategy of selling in small pieces may get them buyers.”

The land belonged to Binny Mills. As part of its revival plan, it was sold to Som Dutt Builders for Rs 60 lakh per ground in the late nineties. In the early part of this decade, 45 grounds were acquired by firms managed by brothers Venu and Gopal Srinivasan for Rs 41 crore.

After retaining a portion for themselves, 31.9 grounds are now up for sale.



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