After nearly a gap of eight years, state-run Mumbai Metropolitan Region Development Authority (MMRDA) has invited bids for a plot of 12,500 sq mt in plush Bandra Kurla Complex (BKC), which houses commercial and residential establishments. Reserve price for the plot is Rs 1,500 crore.
MMRDA official, who did not want to be identified, told Business Standard, "International real estate services firm CBRE will assist in the tendering process, hold road shows in and outside India and organise meetings with the prospective bidders. The last date for filing bid is August 10. MMRDA has taken a decision that the successful bidder can use the entire plot for 100 per cent commercial purposes or use up to 30 per cent for the residential use."He said the reserve price of the plot is estimated at Rs 2.90 lakh a sq mt.
He added MMRDA in 2008 had auctioned three plots for a collective price of Rs 1,322 crore. However, in 2007, sale of three plots at BKC had fetched Rs 2,800 crore. The reserve price during those deals ranged between Rs 3 lakh and Rs 3.53 lakh a sq mt. He said MMRDA had in 2010 had tried to sell the land in BKC at a reserve price of Rs 3 lakh a sq mt but could not carry out for want of bids.
Gulam Zia, executive director, said, "MMRDA has been marketing BKC for the last three decades, and this has given the civic agency enough visibility in the market. However, its ability to generate interest in the auctions entirely depends on the market dynamics such as demand-supply situation and state of economy. We have seen in the recent past that few of their earlier attempts drew a naught. So, seeking external help to market its next auction may not help much unless an active interest from an interested party"
On MMRDA's move allowing portion of the plot for residential uses, Zia said it will only add to the diversity of the project, making it more feasible. '"This will definitely excite buyers and make the auction a big success. However, going by the prevailing land prices in BKC, the successful developer will be forced to create an ultra luxury housing project but this segment is already burdened with large unsold inventories," he said.
UP FOR GRABS
MMRDA has kept a reserve price at Rs 2.90 lakh a sq mt
Successful bidder can use up to 30% plot for residential purpose
In 2008, MMRDA had auctioned 3 plots for Rs 1,322 crore
In 2007, MMRDA had fetched Rs 2,800 crore by selling three plots