Once hailed as the new experience in the destination shopping of super luxury, Parsvnath Developers is reportedly selling its 1.2-acre plot in the heart of Delhi, near Connaught Place, hoping to raise Rs.700-800 crore for paring its debt.
If the company manages to fetch the price it is looking for, it would translate into a 300% premium over the price (Rs.200 crore) it paid to acquire the property from Mahajan Industries and the Dhoot family of the Videocon group barely three years ago in 2008.
The Kasturba Gandhi Marg plot, located bang opposite the American Centre, has an old bungalow, and has been zoned as commercial which will allow the buyer to build a nine storey high-rise with around 150,000 sq ft of space.
“We wanted to build a commercial project ourselves but selling it can get us a good multiple. So we have decided to monetise it to reduce debt,” Pradeep Jain, Managing Director of Parsvnath Developers, said.
Once redeveloped, it would be the first new building to be built in the central business district of Connaught Place in Delhi after the Birla Tower built in early 2000.
Parsvnath, which has a net debt of Rs.1,200 crore as on September 30, 2011, is expected to use the proceeds of this sale to reduce its debt, the person said. The company has been selling its non-core assets to reduce debt, which has come down by 50% over the last two years.
