|Rs 1,104 cr
|Rs 1,011 cr
Jan. 17: Mukesh Ambani today set a national record in real estate deals by paying Rs 1,104 crore for a piece of land in Mumbai, beating brother Anil in the bidding.
Mukesh’s Reliance Industries picked up the 7.5-hectare commercial property in the Bandra-Kurla complex that was placed for auction by the Mumbai Metropolitan Region Development Authority.
Noida-based DLF was in second place at Rs 1,050 crore. Anil’s Reliance Infrastructure, which quoted Rs 1,011.12 crore, came third, followed by Gammon India ' all quoting double the reserve price of Rs 480 crore for the property.
The highest paid for a piece of land thus far was the Rs 720 crore DLF put up for a similar-sized plot on NTC property in Mumbai.
A spokesperson for the authority confirmed the deal, saying that the winner would set up a convention centre there. Reliance would not comment on its plans, but industry sources said a commercial complex would be built on the rest of the land left after the convention centre.
RIL has big plans for organised retail and the development at Bandra-Kurla could well be its signature project.
“A convention centre at Mumbai makes sense because there is not a single one between Dubai and Singapore. Given the fact that Mumbai is fast becoming the financial hub of the region, it becomes all the more relevant,” an industry observer said.
Sources said the centre would have four to five big auditoriums. The company has promised to develop the property in four years but, given Reliance’s record, it could come up before schedule.
Real estate analysts feel the Reliance purchase could create a psychological barrier for other players in the market who might think twice before bidding in other land deals if it was present in the fray.
A late starter, RIL intends to mark its presence quickly. “Reliance is creating a huge land bank. They have big plans for every aspect of real estate development, from housing to retail to hotels to entertainment. They intend to set up malls in 3,000 towns,” Joygopal Sanyal of Trammell Crow Meghraj, Mumbai, said.
With today’s deal, the company has firmly established its reputation as an aggressive bidder, having shown its intentions earlier with a Rs 1,600-crore quotation for a 143-acre plot in Bangalore. But that deal got bogged down in legal wrangles.
The real estate market in Mumbai believes today’s deal could serve as a fresh benchmark. Niranjan Hiranandani, the managing director of Hiranandani Constructions, which is a big property player, agreed. “It shows the tendency of increasing values and prices that people are willing to put in real estate.”
Early this month, when the same metropolitan authority opened bids for five commercial plots in the Bandra-Kurla complex, the quotes had surprised many realtors. The highest bid was then Rs 153,000 per square metre, made by TCG Infrastructure of the Chatterjee group of Haldia Petrochemicals.
TCG had bagged the property for Rs 117.8 crore, but the Reliance deal tops it by some margin. The company is paying over Rs 195,000 per square metre.