Adarsh Developers Sells 41-Acre Land Parcel to Mapletree Investments for Rs 1,900 Crore

In a strategic move to reduce debt, Adarsh Developers, a prominent real estate development firm, has sold a 41-acre land parcel in Bengaluru to Singapore-based private equity fund Mapletree Investments. The transaction, valued at over Rs 1,900 crore, marks a significant step in Adarsh Developers' efforts to strengthen its financial position and fuel its growth plans.

According to sources familiar with the deal, the sold land offers a development potential of around 7 million square feet. The proceeds from the sale will be utilized to reduce the company's debt. "It is a greenfield development, and the money will be used to reduce debt. Adarsh Developers has been consistently reducing debt and focusing on growth", noted two individuals aware of the transaction. Despite inquiries, representatives from Adarsh Developers, Mapletree, and Savils, the advisory firm involved, declined to comment.

This land sale is part of Adarsh Developers' broader strategy to raise capital from private equity funds as it embarks on its next phase of growth. Over the past two years, the firm has successfully refinanced debt exceeding Rs 3,000 crore. "The builder is looking to reduce the net debt by another Rs 1,000 crore, and this is the last land monetisation undertaken by Adarsh", added one source. As of March 2024, Adarsh Developers' net debt stood at Rs 3,300 crore.

In a related development, Adarsh Developers previously sold two land parcels in Bengaluru to Godrej Properties for approximately Rs 180 crore in 2022. The company remains focused on luxury homes, with prices exceeding Rs 1.4 crore, and dedicates 20% of its portfolio to mid-income projects.

In 2023, HDFC Capital Advisors, a subsidiary of India's largest private mortgage lender HDFC, invested over Rs 1,600 crore in a portfolio of 12-13 residential projects developed by Adarsh Developers. These projects, located exclusively in Bengaluru, span a total area of 10 million square feet and include both ongoing and approved developments. Additionally, Adarsh Developers has secured capital from Oaktree and Edelweiss to replace old debt and support its growth initiatives.

"The capital infusion has multiple objectives, such as fostering expansion, guaranteeing operational funds, and expediting the conclusion of current projects", stated a source. Over the next seven years, Adarsh Developers plans to allocate approximately Rs 7,000 crore to develop 25 million square feet of residential properties in Bengaluru. This includes ongoing apartment projects covering 17.10 million square feet, plotted developments spanning 2.80 million square feet, and villa developments totaling 4.62 million square feet.