Haryana Urban Development Authority (HUDA) is set to auction around 100 commercial sites in Panchkula city. For the auction, HUDA has written to the controller of finance for determining reserve price and formulating other modalities.
A reserve price is the minimum value at which a property is put up for auction. As per practice, the reserve price is fixed by taking out an average of the last three bids received for a property of the same size. Sites to be put up for auction are in Sectors 5, 6, 7, 8, 10, 11, 14, 15, and 20.
HUDA estate officer (EO) Mahavir Kaushik said that they have written to the controller of finance for determining reserve price and auction would be held soon after.
Owing to high reserve price and other factors, many auctions of commercial properties had received a lukewarm response in the past few years.
For keeping a realistic reserve price, the authorities would also conduct an exercise to study the rates prevailing in surrounding areas.
The president of Haryana State Property Dealers Welfare Association, Suresh Aggarwal, said that the HUDA should review its policy of determining the reserve price. “HUDA keeps on increasing reserve price irrespective of outcome of previous auctions. The reserve price has to be reasonable, otherwise the auction will not attract buyers,” said Aggarwal.
During the last auction held in 2013, the reserve price for a three-storey shop-cum-office (SCO) site with basement in Sector 14 was fixed at `17.20 crore, followed by a showroom with basement at `15.18 crore and a three-storey shop-cum-flat (SCF) site with basement in Sector 7 at `8.13 crore.
No response was received to any of these sites.
HUDA has been receiving a poor response to its commercial properties since 2011. The auction for commercial sites held on October 11, 2103, was a flop show as only three of the total 25 sites could be sold. On March 21, 2012, HUDA failed to get response for 47 commercial properties out of 75 put to auction. On August 3, 2012, only three sites were sold out of the total 38. On July 21, 2011, only nine commercial sites out of 45 could be sold.
The real estate market in the tricity has witnessed a down trend for the past several years.
The recent auction of commercial sites held on April 11 by the Greater Mohali Area Development Authority (GMADA) turned out to be a lackluster affair as it the agency could find buyers for only 37 of the 49 sites.
Similarly, the auction of commercial properties held by the Chandigarh Housing Board in February last year flop-ped with just two booths being sold.
A total of 145 booths, bay shops and a restaurant site were to go under the hammer.