Biggest land deal in India! Why is Sumitomo investing Rs 2,238 crore for 3-acre plot?

Sumitomo, a Japanese conglomerate, has submitted a bid of Rs 2,238 crore for a three-acre plot at Mumbai's Bandra-Kurla Complex. Under the deal, an acre of land costs about Rs 745 crore which is the costliest last deal ever in India. The reserve quote for the plot was Rs 3.44 lakh per sqm.

According to reports, the Mumbai Metropolitan Region Development Authority (MMRDA) said that Sumitomo was the only bidder for the plot and added that they are processing the bid. The bid is expected to come from Sumitomo's real estate company trying to invest in rent-yielding office spaces. Investors like Blackstone, Brookfield, GIC and Qatar Investment Authority have poured investments to scale large profits.

Sumitomo has paid an insane price, but it is obvious it wants a presence in a prime commercial enclave like the BKC, reports The Times of India.

Sumitomo is allowed to have a built-up area of about 10 lakh sq ft. MMRDA officials have given them permission to use a floor space index (FSI) 4 on the plot.

The Japanese giant has plans of building a commercial office complex. Focusing on the angles of economic and business ties with India, Sumitomo is planning to house all its businesses having an Indian footprint under one roof.

The Maharashtra government has been trying to manage the BKC area as a commercial hub since 1977. Pointing out at the accessibility of railway tracks, airport and the LBS Marg in the area, the government claims that it is the best location for an alternate centre of business.

The largest land deal before Sumitomo's bid was in 2010 when the Lodha Group bid Rs 4,050 crore for MMRDA's 6.2-acre plot in Wadala. The break down per acre was about Rs 653 crore.