Tuesday, January 26, 2010

Mumbai selling office space at 2008 reserve price

Bids, with a floor of 300,000 rupees per square metre, open on March 3

India’s financial capital plans to sell office space in an emerging business district at a minimum price of 4.35 billion rupees (S$132 million) in a deal that may test demand for property amid an economic recovery.

The Mumbai Metropolitan Region Development Authority, or MMRDA, proposes to sell 14,500 square metres of built-up area on 3,162.5 sq m of land in Bandra-Kurla, where Citigroup Inc and the nation’s capital markets regulator are located.

The reserve price is 300,000 rupees per sq m, the authority said in an advertisement, unchanged from the last such offer in 2008.

The sale aims ‘to cater to the growing demand for business area’ in the north-central neighbourhood that was reclaimed from marshland, MMRDA said.

Indian and overseas companies in financial services, insurance, fund management, information technology, telecommunications, among others, can bid for the land, the advertisement said yesterday. Bids open on March 3.

Standard Chartered Plc and Nomura Holdings Inc are among companies expanding their India operations as consumer spending fuels growth in Asia’s third-biggest economy.

An 81 per cent rally in the benchmark stock index in 2009 has also revived developers’ interest, with Lodha Developers Ltd and Sahara Prime City Ltd among at least nine property companies planning to raise about 164 billion rupees in initial sale of shares.

Bandra-Kurla is centrally located in the Manhattan-shaped island-city and the authorities are increasing its access with a new Metro rail, in addition to the existing commuter train and road networks. The existing main business district in South Mumbai at the tip of the city lacks expansion space and stretches daily commuting to up to four hours for some.

The new business district is closer to the city’s two airports, compared with Nariman Point in South Mumbai, which is about 25 km from the closest domestic airport.

The last sale of land in 2008 attracted buyers for only three of the five plots on offer as the global economic slowdown dried up funds and demand for property. Jet Airways India Ltd then bidded 344,448 rupees per sq m for a land parcel with a maximum 24,000 sq m of development area.

India’s gross domestic product grew 7.9 per cent in the three months ended Sept 30, making it the fastest-growing major economy after China.

Finance Minister Pranab Mukherjee on Jan 8 forecast growth of as much as 7.75 per cent for the year ending March.

The Reserve Bank of India has slashed interest rates to a record low to shield India’s US$1.2 trillion economy from the global recession, fuelling demand.

Source: Business Times, 26 Jan 2010

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