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Mumbai set for another mega land deal
BS Reporter in Mumbai | February 11, 2008 09:30 IST
Three months after its record-breaking land deals, the Mumbai Metropolitan Region Development Authority is going in for another mega auction. The authority is expected to rake in a minimum of Rs 1,900 crore (Rs 19 billion) from the auction, going by the reserve price it has set for five plots in the Bandra Kurla complex, the city's new business district.
MMRDA has set a reserve price of Rs 300,000 per square metre for two plots to develop commercial complexes of a total of 4,645 square metres, and Rs 1,02,699 per square meter for two plots of 655 square metres each to develop residential complexes.
It has also set Rs 300,000 as reserve price for developing a club house with gymnasium. In total, MMRDA has invited bids from the companies to develop 72,000 sq meters of land in the G-Block of Mumbai's business district Bandra Kurla Complex.
The authority is expected to get double the money of what it has set as the reserve price. According to industry sources, leading realty players such as DLF, Unitech, Indiabulls [Get Quote], Hiranandani among others are expected to bid for the projects.
"Though the reserve price is Rs 300,000 per square metre, actual bids could be more than Rs 500,000 it received last year since there is not much space left in BKC," a city-based property consultant said.
Late last year, MMRDA sold nearly 75,350 square meters of land in BKC for a total of Rs 2,798 crore (Rs 27.98 billion). In the largest ever deal in the country, city-based developer Wadhwa Builders paid Rs 5,04,000 per sq metre for the 16,500 square metre plot auctioned by MMRDA. Wadhwa paid Rs 831 crore (Rs 8.31 billion).
TCG-Hiranandani paid Rs 1049 crore (Rs 10.49 billion) for the 28,300 sq metre plot and Reliance Industries [Get Quote] paid Rs 918 crore (Rs 9.18 billion) for the 30,550 sq metre plot.
The authority will give the plots on a 80-year lease. The sale of bid forms will start from February 13 and go on till March 18 and bids will be opened on March 18, it said.
According to estimates by property consultant Jones Lang LaSalle Meghraj, nearly 15 million square feet of office space is expected to come up in Mumbai by the end of this year and it is expected to soften the commercial rentals by 15 to 20 per cent. Rentals in the prime commercial space in Mumbai city have gone up by 100 per cent in the last two years.