The Hindu Business Line : Few bidders at Mumbai property sale

Mumbai, March 18 Providing a clear indication of diminishing valuations in the realty sector, the Mumbai Metropolitan Region Development Authority’s (MMRDA) auction on Tuesday saw a near boycott of bidders, with only one bidding Rs 3.44 lakh per sq. metre for an office plot of 24,000 sq. m (built-up area) at the Bandra-Kurla complex here.

There were no takers for another commercial plot of 28,000 sq. m and for a 6,420-sq. m area for a residential clubhouse.

In November last year, property prices in Mumbai touched a record high when the Wadhwa Group bid Rs 5.04 lakh a sq. m for a 7,107-sq. metre commercial plot at the Bandra-Kurla complex.

On Tuesday, Jet Airways turned out to be the lone bidder for the commercial space, willing to pay Rs 826 crore for it. Mr Prasun Sengupta, Vice-President, Corporate Administration with the airline, said the property was for Jet’s global headquarters.

There were 18 bidders for the residential properties, indicating that there is still some steam left in the residential segment. Two residential plots each measuring 7,050 sq. m (built-up area) fetched identical bids of Rs 3.52 lakh a sq. m from Delhi-based Starlight Systems, the top bidder. Starlight will pay Rs 496 crore in all.

MMRDA had invited bids on Tuesday for two commercial and two residential plots, as well as for a residential-cum-clubhouse area. The base price for the commercial plots and the residential-cum-clubhouse area was Rs 3 lakh a sq. m. The base price for the residential plot was Rs 1,02,699 per sq. m. MMRDA will raise Rs 1,322 crore from this auction.

MMRDA Joint Commissioner, Mr Milind Mhaiskar, conceded that the response was subdued for the commercial offerings, and said it was probably due to adverse market conditions.

It could be a ‘wait-and-watch policy’ by some industry majors who did not want to rush into any commitment for now, he said.

Mr Mhaiskar, however, ruled out any lowering of the reserve price for the unsold plots and said they would come up for re-tender soon. Mr Nikhil Mansukhani, Director, Man Infra Project Ltd, who was among the bidders, said, “It was a clear indication that of a slowdown as far as commercial properties were concerned.”

According to sources, Starlight had been aggressive with its bid of Rs 3.52 lakh a sq. m for the residential plots, having bought an adjoining plot at BKC only two years ago. ONGC had quoted Rs 2.71 lakh a sq. m, while Jet Airways was third best at Rs 2.70 lakh a sq. m. Mr Kamal Khetan, Managing Director, Piramal Suntech, said Starlight Systems was a joint venture between the Ajay Piramal Group and Suntech Realty. The plots would become an extension of the group’s ongoing Signature Island project at BKC, which would comprise 35 to 40 high-end residential apartments. Twenty apartments have already been sold at Rs 45,000 a sq. ft, he said.

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