Valor Estate, erstwhile DB Realty, and L&T Realty, the property development arm of engineering major Larsen & Toubro (L&T) have entered into an agreement to jointly develop a Rs 8,500-crore project. It would come up on a 7.5-acre land parcel at Bandra Reclamation in Bandra west locality of Mumbai.

The companies plan to develop a nearly 1.6 million sq. ft. premium residential project on the plot. In 2013, Valor Estate’s subsidiary Goregaon Hotel & Realty (GHRPL) had inked a  pact with a consortium led by a hydro-mechanical engineering services company Om Metals to develop this project. The consortium had secured the approval to develop this project from the Maharashtra Housing and Area Development Authority in 2006.

As part of the agreement, which was signed last month, L&T Realty will retain 80 percent revenue and share 20 percent revenue with Valor Estate if the average sale rate is up to Rs 55,000 per sq. ft. of RERA carpet area in the project.

In addition to this, L&T Realty is expected to provide Valor Estate developed area of 2.75 lakh sq ft in the project and Valor is expected to retain this space as a luxury hotel with around 200 keys. Valor Estate is in advanced talks with an international hotel brand for a 20-year operating agreement for the luxury hotel. This will be the second luxury hotel in Bandra west, after the Taj Lands End.

Valor Estate's responsibility is to get the land vacated and obtain necessary approvals, which are expected to be completed in the next 12 to 18 months. It also entails providing rehabilitation to 1,050 tenements by 2027-28. The total project is estimated to be completed within the next five to six years after the project gets started.