Aug. 05, 2011--Morgan Stanley-backed Oberoi Realty Ltd has dropped its Goa hotel project more than a year after it acquired the property through a bank auction for '61 crore.

The Mumbai-based developer has sold the 15-acre property for '82 crore to a private hotelier, said Oberoi Realty's chief financial officer Saumil Daru.

Oberoi Realty had bought the property in the form of a non-operational hotel with plans to revive and run it. It doesn't have any other project in Goa.

"When we bought the property, we thought we could acquire land around it and make it a larger property. Since that didn't happen, and we also got a good price, we decided to exit," said chairman and managing director Vikas Oberoi.

Goa went through a real estate boom of sorts a few years ago when many large property firms bought land in the tourism hotspot. But complicated land acquisition issues and citizen protests have made it difficult for many projects to take off or continue.

Real estate firms such as DLF Ltd, Unitech Ltd and Emaar MGF Land Ltd have consistently evaluated and divested non-core assets including those in the hospitality space, say analysts.

"This kind of streamlining of the portfolio is the right strategy in a long-term view, because if there are one-two projects and future commitments, then it makes sense to exit," said Sanjay Dutt, chief executive (business), Jones Lang LaSalle India, a property advisory.

At a time when several property developers are stuck for cash, Oberoi Realty has '1,600 crore of cash in its hands, making it one of the most comfortably placed realty firms today.

"With higher borrowing costs and unavailability of funds for the real estate industry, land prices will correct," said Oberoi. "We want to buy land, even acquire through the joint development model, but only where we can make money."

Oberoi Realty has hired South Korean construction company Samsung Engineering Construction (Shanghai) Co. Ltd for its signature mixed-use projects in Mumbai's posh Worli area.

Samsung was the contractor for the Burj Khalifa in Dubai and Malaysia's Petronas Towers, among the tallest buildings globally.

Oberoi Realty on Wednesday said its April-June quarter net profit rose 33% to '106 crore over the year-ago period. Revenue went up marginally to '159 crore from '158 crore.

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