The National Textile Corporation (NTC) on Friday got the highest amount so far for any of its mills in Mumbai as Indiabulls Infra Estate Limited won the bid for the 8.3-acre Bharat Textile Mills in Worli for Rs 1,505 crore.
The amount is double the reserve price of Rs 750 crore set by the NTC for the online auction, which ended after three days of intensive bidding.
The deal works out to Rs 181.32 crore per acre. The last such big deal was in 2005, when DLF purchased the 17.5-acre Mumbai Textile Mill for Rs 702 crore.
The second highest bidder was Lodha Developers, at Rs 1,503 crore, and Peninsula Real Estate Management Pvt Ltd came in third at Rs 1,409 crore.
K Ramchandran Pillai, chairman and managing director, NTC, said, “It has been the greatest deal for us.”
Indiabulls had last week won the adjoining Podar Mills for Rs 474 crore, at almost double the reserve price of Rs 250 crore.
“Since they have Podar Mills, it makes great sense to get this property,” said Gulam Zia, National Director (Advisory Services), Knight Frank India Ltd. “The developer is bound to make good profits considering the location,” he added.
The Floor Space Index for the plot is 1.33, but since most developers go in for public parking lots, they are granted an FSI of 4 as incentive. In case it is 4, the total construction cost will be about Rs 16,000 per sq ft.
“They can easily sell at Rs 25,000 per sq ft and make good profit,” said Aditya Bansal, senior analyst, Liasas Foras, a real estate research firm.
Even if Indiabulls has to settle for an FSI of 1.33, the cost of land, including construction cost, works out to approximately 35,000 per sq ft. “The company then has to start bookings at Rs 42,000 per sq ft,” said Bansal.