Unitech Ltd [Get Quote], the country's second largest realty firm, has forayed into the Mumbai's property market and plans to invest Rs 4,000 crore (Rs 40 billion) in the next three years on real estate development.

According to company sources, Unitech plans to develop three million sq ft, primarily office space, in Central Mumbai in the next three years and is targeting to construct up to nine million sq ft in the next five years.

The company would develop the project, spread over about 20 acres, in an equal partnership with a local developer. It has bought equity stake in the special purpose vehicle, which owns the land, they added.

When contacted, Unitech's managing director Sanjay Chandra confirmed the development and said: "We have entered the Mumbai market and we are working on several transactions".

Chandra, however, declined to share further details of its foray into the lucrative property market of Mumbai. For Unitech, which has a presence in NCR, Kolkata and Andhra Pradesh, the sources said Mumbai is going to be as large a market as the national capital region.

The project in Mumbai is likely to start in the next three-four months. Unitech would lease the office space and is likely to earn a monthly rental of over Rs 100 crore (Rs 1 billion). It may build little bit of retail space and a hotel in the project.

The company is looking at acquiring 70-80 acres of land in Mumbai and has completed the first phase of acquisition, the sources said, adding the company also plans to develop residential property in Mumbai as well.

Unitech presently has a land bank of about 20,000 acres with a saleable area of 850 million sq ft, of which 65 million sq ft is under construction. It had a land bank of over 10,500 acre in September last year.

Unitech has committed about Rs 15,000 crore (Rs 150 billion) in last one year to enhance its land bank, sources said.

Out of the total land bank, the company has 17 per cent in NCR, 21 per cent in Kolkata and 24 per cent in Andhra Pradesh. Unitech plans to deliver about 15 million sq ft of real estate space this year and aims to double it in 2008-09.

The company's current net debt stands at Rs 4,500 crore (Rs 45 billion), which is likely to go up to Rs 8,000 crore (Rs 80 billion) by March 2008.

In the second quarter, Unitech reported a consolidated total income of Rs 1,064.25 crore (Rs 10.64 billion), up 142 per cent from the corresponding period last fiscal. Its profit after tax (PAT) stood at Rs 410.12 crore (Rs 4.10 billion) for the quarter.

For the half year ended September 30, the consolidated total income was at Rs 1,963.93 crore (Rs 19.63 billion) and consolidated PAT was Rs 775.80 crore (Rs 7.75 billion).