VTP Group to Develop Satellite Group’s Mumbai Uber Luxury Residential Tower

The family of builder Pankaj Shah of Satellite Group has ceded control of its uber luxury residential tower, Sesen, at Nepean Sea Road to Pune-based VTP Group.However, the planned 66-storey tower remained stuck as Satellite was unable to procure further building permissions and had to pay back a Rs 340 crore loan to Indiabulls. VTP group is the developer nominated by the lender (Indiabulls) to complete the project. The plot earlier belonged to the National Textiles Corporation (NTC) whose sole tenant was the late industrialist Kamal Morarka, who occupied the bungalow. Morarka and the senior Shah had tied up to redevelop the plot though a rival builder in 2005 had objected to the agreement on the ground that Morarka was only a tenant. The bungalow was demolished, and construction of the tower commenced. However, it remained incomplete because the developer was unable to get additional floor space index (FSI) from the NTC, which was to auction it. Subsequently, development control rules have changed. Now the new developer can buy additional construction rights from anywhere to complete the project and does not have to depend on NTC’s FSI. The project requires quick implementation given the momentum in premium real estate. So, it’s best that a more established player with focus on construction takes over. According to a joint development agreement signed between Satellite Group and VTP Group, the latter will be responsible for obtaining all pending approvals.Expected revenue from the project will be approximately Rs 2,500 crore. VTP Group will be entitled to fees of 12% of revenue or Rs 200 crore, whichever is lower. As per latest reduction in rates of premium by government, the approval cost of the project has reduced by Rs 216 crore. Pending cost to complete the project will be Rs 630 crore. Of the 30 duplexes, 11 have been sold over the past decade and two more are on the verge of being sold. Each duplex is around 10,000 sq ft in size. While some were initially booked for Rs 75 crore each, a few are believed to have fetched around Rs 100 crore. Yes Bank co-founder, Rana Kapoor (currently in jail) and his family firms booked three duplexes in Sesen.