Two ultra-premium apartments in Mumbai are on the block. The first is located in the NCPA apartments compound at Nariman Point. It measures 3,500 sq ft in size and the reserve price being quoted is R30 crore or R85000 per square foot.
The last date for receiving bids for this apartment is December 26, 2010. The property is currently owned by Ambuja Cement.
The second apartment is the top floor of a Godrej building called Planet Godrej in Mahalaxmi. It is a private-edition market that was designed by Parmeshwar Godrej herself. She’s designed the property upon the request of her son Pirojsha, who heads Godrej Properties. It is the only apartment that she’s designed.
The all-white branded residency is 3,400 sq ft and has a 360 degree sea view. The last date for receiving bids for this apartment is January 9, 2011. The reserve price is R15 crore or R45000 per sq ft.
“We’ve fixed the reserve price for this designer apartment guided by factors such as design, unit size and location,” said Anand Narayanan, national director — residential agency, Knight Frank India, which is marketing the two properties. “It is however, quite difficult to put an absolute price tag on such branded residences and hence the requirement to sell it through ‘auction’ rather than through a normal sale process.”
Auction ensures better price discovery for such assets. Branded residences are similar to the branded bags or apparel market where one always sees a price premium as compared to normal mass market products.
Though the entire branded label market including apparels, shoes, bags, cars among others is expected to be growing at a CAGR of 40% in India, the branded residences segment is still at a nascent stage.
It however, holds immense market potential through its ability to meet the aspirational requirements of India’s rich to own “trophy assets”. The fact that Nisa Godrej lives in the same building is a huge reaffirmation of faith from the Godrej family about the property itself.
Realty consultants point out to a trend in these two bids. They point out that unlike other properties that have so far gone on auction, there have been enquiries both by big industrial houses in Delhi and Mumbai for these two flats. “For every three enquiries from Mumbai, there is one from Delhi for these two apartments. The trophy buys are no longer local purchases,” said Narayanan.
Also, in case of the NCPA property, ‘a take it now price’ has been introduced. This means that if somebody likes the property today and does not wish that is auctioned, he/she can take it at a price close to the reserve price or more.