Navi Mumbai land auction prices rise, more to follow

The sale of two land parcels by City and Industrial Development Corporation of Maharashtra Ltd (CIDCO) in Navi Mumbai has fetched higher prices than three months ago, signalling a revival of interest in a market that has largely been frozen since mid-2008.

A 5,000 sq. m plot in Kharghar was sold through tender at Rs 75,515 per sq. m, more than the Rs 68,000 per sq. m that Piramal Sunteck Realty Pvt. Ltd paid in a CIDCO land sale in August. The other plot, of 1,500 sq. m, also in Kharghar was sold at Rs 61,000 per sq. m, higher than the current market price by Rs 5,000-7,000 per sq. m.

“Like property prices, land prices have also risen in the past three months, though they still haven‘t reached the 2007-early 2008 peak levels. Land sales are still slow but demand has returned,” said Mohan Ninawe, CIDCO spokesperson. According to the official, land prices that crashed by nearly 60 percent in the past one year have gone up 20-25 percent in the recent two-three months. Land prices started cooling down from mid-2008, when both land and home sales slowed and developers, struck by a credit crunch, stalled expansion and land-buying plans.

State-owned bodies, such as National Textile Corp. Ltd (NTC) and the Mumbai Metropolitan Region Development Authority (MMRDA), which failed to sell land parcels in the past few months, even at reduced prices, are firming up new sale plans for the next few months. “There is always interest for such land sales, but there is also a need to unlock the huge amount of land which belongs to government bodies to make valuations become reasonable,” said Akshaya Kumar, CEO of Parklane Property Advisors.

Lodha Developers Ltd, which had raised its bid to Rs 710 crore from Rs 657 crore to qualify, filed a petition in the Delhi high court, which has stayed NTC from issuing fresh tenders for the property. That hasn‘t deterred NTC from being aggressive on the pricing front. “We are ready with the land for our remaining mills and we need to speak to property consultants to know how soon we can put them on sale. But we are very clear that we will not compromise on the market price and will not lower rates,” said K. Ramachandran Pillai, chairman and managing director, NTC, for which the sale of mill land is a large source of revenue.

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