After a gap of almost six years, the Haryana Urban Development Authority (Huda) on Wednesday announced to auction a five-star hotel site in Sector 47 at a reserve price of Rs 497 crore. Investors interested in the five-acre site will have to start their bid at a minimum rate of Rs 100 crore per acre, which is the highest ever fixed by Huda.
The same site was auctioned for Rs 255 crore in 2007 against a minimum bid price of Rs 163 crore. At that time, the reserve price was R32 crore per acre which was offered by Eros Group of the Park Royal and Shangri-La hotels fame. The group had, however, later surrendered the site back to Huda.
Anshuman Magazine, chairman and managing director of real estate consulting firm, CBRE, said, “Though the price is high, a lot will depend on the permissible usage plan of the plot. Certain commercial activities like offices and retail space are allowed to operate from a hotel premises. Market price will decide the course to arriving at the break-even point in this case.”
Anckur Srivastava, chairman, GenReal Property Advisers Private Limited, said, “It will be interesting to see the exact conditions of the auction like floor space index and usage plan. Keeping the price at R497 crore, however, seems like wishful thinking on part of Huda. No developer has that much liquidity in the present economic hard times.”
Huda administrator Praveen Kumar, meanwhile, said that R497 crore was the reserve price approved by the department for the auction of the land which should be used to set up a five-star hotel only.
Huda chief accounts officer SK Grover said, “The same property had been offered for auction in 2007 and had been bought by a developer but was surrendered later. The land rates increase by about 15% every year.”
The hotel industry began to flourish in Gurgaon only post-2005, when top industry players flocked to the city to cater to the projected demand of 10,000 rooms in NCR for CWG 2010.
Authority officials added that the auction date has not been fixed yet but it will be held in June. Thirteen top hotel brands already functioning in Gurgaon are expected to participate in the auction process along with other players.