No bidders for 2 plots in Bandra-Kurla auction

Indicating a slowdown in the property market and negative investor sentiment, the Mumbai Metropolitan Region Development Authority (MMRDA) failed to get bids for two of the five plots that it auctioned in the Bandra-Kurla Complex (BKC), Mumbai's secondary business district, today.

One of these plots is intended for commercial use and the other is meant for a club house and gymnasium.

For a commercial plot with a total developable area of 24,000 sq metres, the authority received around Rs 3.4 lakh per sq metre, only 14 per cent more than the reserve price of Rs 3 lakh per sq metre.

Jet Airways bagged the plot for Rs 816 crore. Surprisingly, the airline company was the sole bidder for the plot. The airline is planning to build its global headquarters at the site and shift its offices from Andheri, a company official said.

The price that Jet paid contrasts poorly with the bid of Rs 5.04 lakh per sq metre, the highest in the country to date, by Mumbai-based developer Wadhwa Builders for an MMRDA plot in November 2007.

However, two residential plots with a developable area of 7,050 sq metres each went for Rs 3.52 lakh per sq metre, against the reserve price of Rs 1.02 lakh per sq metre.

Starlight Systems, part of Piramal Sunteck Realty, a joint venture between the Ajay Piramal group and Sunteck Realty, bagged both the plots for a cumulative Rs 496 crore. Starlight's bid was much higher than ONGC and Jet Airways.

Piramal Sunteck will use these residential plots to extend a nearby residential project, Signature Island.

"We will use these plots as an extension of Signature Island, which commands rates of Rs 45,000 per sq foot (11.1 sq feet = 1 sq metre). We are confident of getting similar rates for the new projects also," said Kamal Khetan, managing director, Piramal Sunteck.

Commenting on today's auction, real estate consultant Ambar Maheshwari of DTZ said: "Market sentiment is negative and realty prices have been very high. New supply is also coming on the market and competing with these land auctions. That is the reason many people did not show too much interest in today's auction."

He added that the realty market has slowed down over the past six months and today's development reflects that.

However, MMRDA is confident that buyers will see handsome gains in the future.

"Fluctuations in the stock market and negative sentiment have contributed to the lower bids. However, the residential bids set a new record for the Bandra-Kurla area. The commercial plots also received high bids," said Milind Mhaiskar, joint metropolitan commissioner, MMRDA.