Real Estate News No 17

Revenue Sharing Partnership Between Landowners and Builders on The Increase

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NEW DELHI: Businessman Vijay Gupta has accumulated such a lot land in Gurgaon over the years that he's left with 1,500 acre even once selling huge tracts to builders because the Delhi's suburb has grown into a worldwide business hub. Finding it tough to dump the land, Gupta has joined hands with builders and given them the rights to create the property on his land on a revenue share basis.

Gupta is simply one of many land aggregators who have turned developers.

"Land homeowners see an upside in holding on to their land and doing such joint developments instead of selling. Returns are higher this fashion," says Anckur Srivasttava, chairman of GenReal Property Advisers.

Gupta, chairman of Orris Infrastructure, recently bound with the Noida-based the 3C Company for a 48-acre parcel of land in Gurgaon. Since Gupta had already taken approvals and permissions to create a gaggle housing project on the land, his partner is in a very position to launch the project in only four-five months. If 3C had bought land on its own, it might have taken a minimum of a year or a lot of to kick-start the project.

Gurgaon-based Sidharth Chauhan of Sidhartha Developers, Sharab Reddy of the Triangle cluster in Bangalore and Prashant Solomon of Chintels in Gurgaon are tying up such agreements with developers to maximise their returns.

"Land costs have shot through the roof, thus developers do not see worth in shopping for land outright," says Sidharth Chauhan, who has been consolidating land for over a decade and is currently developing properties on his own likewise. Within the past, he has additionally aggregated land for Adani's SEZ in Gurgaon.

"Most developers nowadays are already leveraged to the hilt and cannot invest to shop for land nowadays. Joint Development Agreements(JDA) are the sole answer for them," says Amit Bhagat, CEO of raise Property Investment Advisors.

Home sales have dropped by quite 50 per cent over the past year and a 0.5 and banks have turned cautious whereas lending to the world. This has pushed developers into a liquidity crunch, creating it tough for them to shop for land, when they have to launch newer comes so as to sustain their money flows. Many developers have additionally taken huge quantity of debt for construction and different activities.