DDA hotel plot auction finds few takers
17 May 2007
It was another round of failed auctions for the Delhi Development Authority, or DDA. Only three out of the 19 hotel plots put on the block could find any takers despite the DDA slashing reserve prices by over 20 per cent, reports CNBC-TV18.
Falling realty prices forced the DDA to cut down the reserve prices of the hotel plots that it had put up for auction across the capital. But even that failed to excite bidders.
Sources
say, of the 19 plots auctioned in areas like Dwarka,
Mayur Vihar and Harinagar, only three were sold. While
the total reserve price for these three plots was Rs
43.28 crore, DDA managed to rake in only about Rs44.28
crore. That is only about 1 per cent more than the reserve
price.
Vivek Dahiya, Associate Director, DTZ India said, "There is very little demand for hotel rooms in these areas. DDA follows the standard policies of district centres and community centres having hotels. But these areas in Delhi do not need hotels."
The DDA''s decision to only auction plots for five-star hotels was the reason behind the sluggish response. Experts say these areas will not see enough traffic to justify prices. Hoteliers are willing to pay big bucks for prime location. For instance, in the last such auction held by DDA in Jasola, the Emaar MGF Group picked up land at Rs 100 crore an acre.
Hotel
Leela Ventures picked up a plot for Rs200 crore an acre
in the posh Chanakyapuri area in an auction by NBCC
last month. So, even though prices in this round were
three times lower, bidders were hard to come by.