Wadhwa Developers bagged a 7,107 square metre plot for a mind-boggling Rs831 crore, which works out to Rs46,883 per sq feet.
MUMBAI: When financial bids from 19 companies for three commercial plots owned by the Mumbai Metropolitan Regional Development Authority (MMRDA) in Bandra-Kurla Complex were opened on Monday, a new national record was created.
Wadhwa Developers bagged a 7,107 square metre plot for a mind-boggling Rs831 crore, which works out to Rs46,883 per sq feet.
It’s the highest in the country, says Pranay Vakil, chairman, Knight Frank, and slightly more than two and a half times the rate of Rs18,000 per sq feet paid by Mukesh Ambani owned Reliance Industries Limited (RIL) for a BKC plot in 2006 (See accompanying infographic).
Two other plots were also sold. A 30,550 sq mt piece was picked up by RIL for Rs918crores, which is Rs27,917 a sq feet — more than double the basic bid price of Rs18,000 a sq feet — and a 28,300 sq mt plot, which was bought by TCG and Hiranandani jointly for Rs1,041 crore. That, by the way, works out to Rs 34,187 a sq ft.
In all, MMRDA pocketed a cool Rs2,790 crore. MMRDA claims the money it has generated through selling these three plots will be invested in infrastructure projects like the Metro rail network.
Experts say that once the plots are developed, it will release 10 lakh sq feet of office space into the city. But the sale has sent the entire realty market into a tizzy.
“It’s absolute madness,” Vakil told DNA. “Counting the construction costs and a developer’s profit margin of even 20 per cent, you are talking of selling office space at about Rs50,000 to Rs70,000 a sq ft.”
Significantly, the rate for prime Manhattan commercial realty, opposite Grand Central Station, is Rs25,000 per sq feet.
“I have been in the business for long and I do not have a single client who would be willing to pay such rates.” added Vakil. But Sanjay Chabria, director, Wadhwa Group, differs.
“With the developable FSI to be increased to 4, the land cost works out to roughly Rs30,000 a sq ft,” he said. “I have 4 to 5 corporate clients who are willing to shell out upto Rs 51,000 a sq ft for a good office at BKC.”
Anuj Puri, chairman, Jones Lange Lasalle Meghraj, backed Chabria and said, “Investment banks would be willing to pay such high rates.”
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