India's biggest commercial realty deal at BKC

‘Result too large to display’. As mobile phone calculators flashed this message, over two dozen people assembled outside the sixth floor conference room at the MMRDA headquarters scrambled to make sense of the mind-boggling bids for three plots in the Bandra-Kurla Complex (BKC) on Monday evening, reports the Times of India.

It took minutes of brain-wracking to finally realise that India’s biggest commercial land deal had just been struck, leaving the Mumbai Metropolitan Region Development Authority (MMRDA) richer by Rs 2,790 crore. TOI in its Monday edition had predicted that these plots would fetch nothing less than Rs 2,500 crore.

The three plots totalling barely six acres in size, are mainly reserved for commercial/office space and a car park. Bidders who won each of the three plots are Mukesh Ambani’s Reliance Industries, the Wadhwa Group and a joint venture between Purnendu Chatterjee promoted-TCG Urban Infrastructure and Hiranandani Group.

But what sent shock waves in the real estate industry was the phenomenal price quoted by the Wadhwa Group for plot no C-70 behind ICICI building in BKC. The less than two-acre land fetched Rs 831 crore or Rs 5.04 lakh per sq m.

This is almost two-and-a-half times the reserve price of Rs 1.53 lakh per sq m set up by the MMRDA. Wadhwa’s bid works out to Rs 46,800 a square foot. Real estate sector experts say this is by far the largest amount per square foot for the purchase of commercial property in the country. In comparison, the current property prices in the BKC for a finished office space is Rs 35,000 a square foot.

To put the stunning price paid in perspective, Wadhwas have paid well over Rs 400 crore an acre whereas Reliance Industries had paid a shade less than Rs 60 crore an acre for the last mega deal at BKC (in January 2006).

‘‘We paid this price because of the strategic location surrounded by garden from three sides. It is a peaceful environment,’’ said Vijay Wadhwa, promoter of the Wadhwa Group, in a late night SMS to this newspaper.

Earlier in the evening, Wadhwa told TOI that he is looking at a profit margin of about 10-15%. ‘‘We already have committed clients including multinationals and diamond merchants, who missed the bus in booking space in the upcoming Bharat Diamond Bourse in BKC. We will sell the building outright once its constructed,’’ he said.

‘‘We are not surprised by these rates. There is tremendous demand for good quality office space in BKC,’’ said Roopesh Kaul, chief operating officer of the Maker Group.