Guess who just taught the pros how to sell real estate at a premium in the midst of a slowdown? The Bengal government!
In a first for a state long accused of lacking business spunk, a government agency has auctioned 54 residential flats in Rajarhat-New Town through a professionally managed process that fetched prices 15 to 20 per cent higher than market valuations.
The West Bengal Infrastructure Development Finance Corporation Ltd (WBIDFC) has sold 54 out of the 60 units at Sankalpa, located in Action Area-I, that it had put up for auction. This is a departure from the practice of selling HIG flats on first-come-first-served basis.
A 1,330sq ft flat on the top floor of a 17-storey block fetched Rs 90 lakh against a reserve price of Rs 79.81 lakh.
If advertising professional Sandeep Shah was happy paying a premium over the reserve price to give his family the best on offer, WBIDFC chairman Abhirup Sarkar was delighted that the idea clicked.
“I teach auction as a topic in class. When I took over (the corporation) in 2012, I thought of putting it into practice. It was a policy decision. I am very happy that it worked out well,” Sarkar, an economist and ISI professor, told Metro.
He said the auction served a two-fold purpose. First, it fetched the government the best possible price. Second, the process was conducted in a transparent manner.
Harsh Neotia, chairman of Ambuja Realty, was among those pleasantly surprised by the result. “It is laudable that such an innovative idea worked despite difficult market conditions,” he said.
The corporation had hired real estate marketing firm NK Realtors to carry out the auction. Each flat was valued on the basis of various parameters, including floor height and direction. Advertisements were published in newspapers to invite bidders.
The bidders were required to quote their price for a particular unit in sealed envelopes and submit a bank draft each for Rs 5 lakh to demonstrate their seriousness in participating in the auction. The bids were opened on Sunday.
Sources said there were 77 bids for 54 units, leaving just six apartments unsold.
Standard apartments priced Rs 45-55 lakh were sold in the Rs 48-60 lakh range. Deluxe flats priced Rs 76-81 lakh fetched Rs 80-90 lakh.
Shah, the highest bidder, said: “I wanted the topmost flat. My family liked the view from the top. Had it been a lottery, I might have ended up buying a flat in which I would not like to stay,” he said.
Pawan Agarwal, director of NK Realtors, said his team had studied various models to design the bidding process. “The idea, of course, came from WBIDFC. We executed it,” he added.
Real estate experts said auctioning had opened up new possibilities in the sector, but cautioned that it would work only if demand outstripped supply.
Flats in the LIG and MIG segments of projects involving government agencies can’t be sold through auctions because that would contradict the promise of affordable housing. These apartments are sold through a draw of lots.