Bengaluru-based Nitesh Estates inks pact with Garden City

Real estate firm Nitesh Estates NSE 2.86 % has entered into a joint development agreement with Garden City for three of its residential assets in the city. The move will help it reduce debt by Rs 200 crore, said two people aware of the deal.

“The tieup is for three projects totaling to 1 million sq ft. The projects includes of park avenue, Napa valley and Knightsbridge,” they said, adding that Nitesh Estates plans to halve its net debt by the end of 2019.

Bengaluru based Nitesh Estates, which has been struggling with projects between the slump in sale of residential units, had brought down its net debt of Rs 1,500 crore by Rs 450 crore earlier this year by selling land in the city and exiting a joint venture mall project with Goldman Sachs.

“The debt is Rs 200 crore on the projects, to be taken over from Nitesh Estates by Garden City and the revenues of Rs 500-600 crore goes to them and they will finish the projects.

Murali Krisna, managing director of Garden City, confirmed that a deal has been signed but did not share any details.

Over the next two quarters, Nitesh Estates plans to focus on commercial real estate with 3 million sq ft of projects. “The builder will be clearly focused on exiting residential business in one year by asset sales and finishing last-mile projects,” the person cited said.

The Indian real estate sector is hamstrung by a liquidity crisis and unsold inventory of about 665,000 units across seven major cities, according to Anarock Research.