Wadala land deal is India’s biggest
A six-acre government plot in Wadala fetched the highest bid of Rs 4,053 crore from the Lodha Group on Tuesday, setting not only an all-India record, but once again reaffirming land-starved Mumbai’s numero uno position in the property market. While Mumbai has a negligible amount of open spaces like parks and playgrounds compared to other leading global cities, its real estate is one of the most expensive in the world. Analysts had predicted that this tract of land was all set to create a record after the Mumbai Metropolitan Region Development Authority (MMRDA), which controls the land, tweaked tender conditions to allow multiple towers instead of a single ‘iconic’ tower. It also permitted 100% residential construction instead of the earlier stipulation of just commercial. MMRDA officials said this bounty would be redeployed for the city’s transport projects. In 2008, a Delhi-based developer, BPTP, had bagged a 95-acre plot in Noida for Rs 5,000 crore, but the deal was later called off. Till now, DLF’s bid of Rs 1,750 crore for 350.7 acres in Gurgaon last year was considered to be the highest in the country. But on Tuesday afternoon, the Lodha Group beat this record by several times after it outbid three other developers for the Wadala plot by quoting double the reserve price. The MMRDA had set a minimum rate of Rs 40,000 per sq m (Rs 1,980 crore) and Lodha put in its bid for a hefty Rs 81,818 per sq m.
The six-acre sprawl sold for over Rs 4,000 crore on Tuesday is located in the Wadala Truck Terminal. It will also allow the developer for the first time ever to utilise an unheard floor space index (FSI) of 20. The average FSI—the ratio of the permissible built-up area vis-avis the plot size—in Mumbai is between 2 and 4. The FSI here is high because the entire FSI available for the Wadala truck terminal is being used up on this six-acre portion. “Clearly, the location is great with the upcoming Metro and monorail projects in close vicinity. This site will be by far the most well-connected in the city. With the plot offering a saleable area of close to 80 lakh sq ft, we plan to utilise about 70% of it for residential purposes,’’ Lodha Group’s managing director, Abhisheck Lodha said minutes after he emerged from the bidding process held at the MMRDA headquarters in the Bandra-Kurla Complex. Lodha Group is mainly into constructing high-end apartment buildings in the city. Other developers in the fray were Piramal Sunteck Realty (Rs 3,465 crore), Indiabulls (Rs 3,327 crore) and Dosti Group (Rs 2,251 crore). Perhaps the biggest advantage of this jaw-dropping transaction is the easy payment schedule laid out by the MMRDA. Lodha will have to shell out this humungous amount over five years with a 10% annual interest (which takes the figure to over Rs 5,700 crore). Of this, barely 30% of the amount will have to be paid in the first three years. “The money will come for internal accruals and from the sale of apartments once the booking commences,’’ said Lodha, who is the son of BJP MLA from Malabar Hill, Mangal Prabhat Lodha. The developer has already calculated his profit at Rs 3,036 crore. MMRDA commissioner Ratnakar Gaikwad said, “I am happy that the plot has fetched twice the amount we had asked for. We hope to get high prices for our other plots and the money will be used for Mumbai’s infrastructure.’’ A property expert said that Lodha should now launch the project quickly after procuring all permissions. “They must start the bookings early and receive advances from buyers so that it will be easier for them to pay off MMRDA,’’ the expert said. MMRDA is to lease out the 25,000 sq m Wadala land for 65 years to the highest bidder. According to the tender document, the land could be used for commercial offices, business centres, shopping malls, star hotels and restaurants, entertainment centre, health, sports facilities and residential. “The maximum permissible height of the building shall be subject to limitations, if any, set out from time to time by the civil aviation department. Subject to the provisions of the BMC Act, the allottee will have full discretion to organise inner spaces, both horizontally and vertically, to suit his requirements,’’ it said. The plot is situated near the inter-state bus terminal in Wadala and falls along the upcoming monorail line between Jacob Circle and Chembur via Wadala and is close to the Eastern Express Highway. It was initially planned as a 101-storey commercial tower, but the MMRDA had to scale it down after it found no takers, besides facing objection from the civil aviation department.