Lodha Developers on Tuesday emerged as the highest bidder at a Mumbai Metropolitan Region Development Authority (MMRDA) auction to bag a 25,000-sq metre (around 22 acre) plot at Wadala in central Mumbai for Rs 4,050 crore. Lodha pipped Sunteck Realty, which made a Rs 3,500-crore bid, Indiabulls Real Estate (Rs 3,350-crore) and Dosti Group (Rs 2,300-crore).
MMRDA, responsible for planning the metropolitan area development of Mumbai as well as the urban area on the mainland, had originally planned to build a 101-storey tower on the land, but abandoned it because of an unresponsive market.
Lodha plans residential developments on the site. The project will be priced at around Rs 14,000 per sqft. Abhisheck Lodha, MD, said: ?With the upcoming monorail and metro rail both converging here and the new freeway being built along the harbour also joining here, this site will be by far the most well-connected site in the city.?
Analysts said the price of was too steep. ?Prima facie, it?s pretty difficult to justify the bid price at these numbers in that area. At 14,000 per sq ft, we see difficulty in the company making money. Given the price of Rs 4,050 crore and construction costs going up, they have to price it at an upwards of Rs 20,000 per sq ft. It will be difficult to attract buyers. A lot of inventory is coming up in that area, which will lead to downward pressure, impacting profitability,? said Ghulam Zia, national director, advisory services, Knight Frank India.