Prized Mumbai plot gets dumped by builders, developers for unreasonable reserve price

The Mumbai Metropolitan Region Development Authority (MMRDA), which was expecting to rake it in with a prime Bandra-Kurla Complex (BKC) plot it put up on the block had to do a reality check on Wednesday as the plot found no takers, with not a single bider turning up at the MMRDA office. It turned out that the MMRDA's expectations were grossly exaggerated.

Developers and real estate experts faulted the MMRDA for fixing and ''unrealistic reserve price'' for the 2,612 square metre commercial plot in BKC G-block.

MMRDA sources privately admitted that at Rs3 lakh per square metre base price the plot was grossly overpriced. They said developers could not afford it. While finished office space realty prices in the BKC range from Rs25,000 to Rs30,000 a square foot, the cost of the MMRDA plot itself worked out to around Rs 30,000 a square foot.

The plot was to be leased out for 80 years with the maximum built-up area to be offered for commercial office construction around 14,500 square metres. At the reserve price the plot would have fetched the MMRDA Rs435 crore, but Wednesday's no-show put paid to the MMRDA's ambitious bid to make money and give a boost to the realty market after a bout of recession, turned out to be a dud.

The tenders had been purchased by Vinita Estates (Wadhwa Group), Godrej Properties, Top Value Real Estate Development (Peninsula Group), Housing Development & Infrastructure (HDIL), Oberoi Realty, Shree Yashraj Developers, Bharti Realty and Star Light Systems.

The plot offered a permissible floor space index (FSI) of 4. According to analysts, it was a matter of grave concern that none of the bidders put in a bid as they felt the reserve price was too high. They say that on the one hand the government was seeking to promote budget, low-cost and affordable housing on the other had bodies such as the MMRDA were setting up unrealistic reserved price.