Mumbai: After a two-year wait, the family office of Uday Kotak finally got their hands on a sea-facing property in Mumbai’s upscale neighbourhood Worli.
In one of the largest bungalow deals, executive chairman of Kotak Mahindra Bank and his family have bought the sprawling residence of Ranjit Chougule, managing director of the defunct wine firm Indage Vintner for Rs385 crore , according to two people aware of the development.
According to local brokers, the Kotak family bought the bungalow at 20% above the market rate.
Popularly known as Champagne House, the two-storey property with total size of around 1,900 sqm has been under the possession of Edelweiss Asset Reconstruction Co. Ltd for the last three years. In 2016, Kotak family office entered into a memorandum of understanding (MoU) with Edelweiss to buy the property under which around Rs30 crore was paid in advance,said the first person mentioned above.
However, the deal was not closed as the Chougules and some other tenants continued to live in the bungalow. “As the transaction was not able to close, they (Edelweiss) have even approached few developers to sell the property. Now, the tenants have been vacated and everything is settled,” the same person said.
Both Chougule and Kotak’s family office have confirmed the deal but declined to provide details of the transaction. “Kotak Family Office invests across sectors. Kotak Family Office has invested in an asset at Worli, Mumbai,” said Rohit Rao, spokesperson of the family office in an email response.
In a text message, Chougule confirmed that Kotak’s family office has done a “transaction with Edelweiss, our lenders, for our asset in Worli.”
Edelweiss ARC declined to comment on the transaction.
“The property has been bought as an investment by the family and is not yet clear how it would used in future,” said an official, on condition of anonymity.
Founded by wine baron Shamrao Chougule and his family in 1982, Indage Vintner (formerly known as Champagne Indage) was one of the largest and oldest wine makers in India. Hit by the global financial crisis in 2008, the company, which sold the popular Riviera brand of wines, was reeling under a mounting debt after it heavily borrowed to fund its overseas acquisitions. At the time, the company owed around Rs400 crore to the banks. In 2010, Bombay high court issued a winding-up order to the company.
Later, Edelweiss ARC bought out its loan following which the property came under its possession.
The last three years have seen a few large bungalow transactions both in Mumbai and the National Capital Region (NCR). In September 2015, chairman of the Aditya Birla Group Kumar Mangalam Birla bought Jatia House at Malabar Hill in Mumbai for Rs425 crore. A few weeks later, billionaire and chairman of Serum Institute of India Cyrus Poonawalla acquired Lincoln House in south Mumbai for Rs750 crore, in the largest deal so far. Last year, Anushka Singh, grand-daughter of K.P. Singh, chairman of DLF, bought a sprawling bungalow at Lutyen’s Delhi from the family of Air Chief Marshal Pratap Chandra Lal for Rs477 crore .
“There is an immense demand for bungalows but it is a rare asset now particularly in the island city. Except for company-owned ones where they want to exit the property for financial reasons, there are extremely rare cases of bungalows getting sold,” said Ashutosh Limaye, research (head), JLL India, a property consultant.
According to him, the rates of such transactions do not reflect market conditions. “This is because firstly there is an extremely lopsided demand and supply in terms of availability of bungalows for sale, and secondly, these properties are often bought for personal purpose. So a lot of emotional and sentiment is involved in such transaction,” he said.