The MMRDA had originally planned to build a 101-storey tower on the plot, but has now allowed the builder to build as they wish.
In the country’s biggest land deal till date, Lodha Developers on Tuesday picked a 25,000 sq mt plot in Wadala for a mind-boggling Rs4,053 crore from the Mumbai Metropolitan Region Development Authority (MMRDA).
The developable space works out to 4.95 lakh sq mt, or 54 lakh sq ft. The plot has been leased for 65 years. The developer will pay the amount (with interest) over five years, which works out to Rs5,723 crore.
What makes the deal unique is that the MMRDA has given an unprecedented high FSI of 19.8 to the developer. Given the small size of the plot (25,000 sq mt), this means the developer could build a tower over 80 storeys high.
The land is part of the 46-hectare Wadala truck terminal, for which the MMRDA is the planning agency. The terminal has a global FSI of 4. The high FSI of 19.8 has been arrived at by adding FSI from open and unused plots.
Assuming a loading of 40%, it translates into saleable space of 75 lakh sq ft as proposed by the developer.
In 2008, a consortium led by the Delhi-based Business Park Town Planners (BPTP) bagged a 95-acre commercial plot in Noida for Rs5,006 crore from the Noida Authority, but the deal fell through as the developer was unable to make the payment.
The MMRDA had set a reserve price of Rs40,000 per sq mt for 25,000 sq mt (which adds up to Rs1,980 crore) of the Wadala plot.
But it got double the price.
The other bidders were Suntech Realty Ltd (Rs3,465.99 crore, or Rs70,002 per sq mt), India Bulls Real Estate (Rs3327.50 crore, or Rs67,222.42 per sq mt) and Gaurhari Estate Pvt Ltd (Dosti Developers; Rs2,251.99 crore, or Rs45,494.94 per sq mt)
Lodha will have to make the payment in five years. “The builder will be allowed to make telescopic payment,” said SVR Srinivas, additional metropolitan commissioner, MMRDA. This means the builder will have to make an upfront payment of 10%, which translates into Rs40.5 crore, pay 5% the same year, and then pay 10%, 15%, 20 % and 40% in the following years.
The MMRDA had originally planned to build a 101-storey tower on the plot, but has now allowed the builder to build as they wish.
“They can construct any number of buildings in the premises,” Srinivas said. Last year, the MMRDA received three bids for building the tower from Australian firm Hyder Consulting, Essar Realty in partnership with a Dubai-based firm, and Reliance Infrastructure partnering with a Chinese firm.
But the MMRDA was not happy with the offers and so decided to go for re-tendering.
The deal has sent shockwaves in the city’s realty market. HDFC chairman Deepak Parekh termed the price “ridiculous”.
Real estate experts believe sales, and in turn prices, will further dampen due to a situation of oversupply with many large developments underway in the neighbourhood.
“Importantly, it is to be seen whether the MMRDA or civic authorities allow the 75 lakh sq ft to be utilised on the very small plot area of 25,000 sq mt. We are not even counting problems like height restriction or open space requirements,” said the head of the land department section of a global real estate firm.
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