No bidders for Finlay Mills, yet again | india | Hindustan Times
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No bidders for Finlay Mills, yet again

The bidding of the 10.5 acre, the size of 10 football fields, Finlay Mills in Parel by the National Textile Corporation (NTC) received a cold shoulder for the second time with a reserve price of Rs 745 crore. Gigil Varghese reports.

india Updated: Mar 04, 2009 01:27 IST
Gigil Varghese

The deepening global slowdown has exposed fissures in the real estate market.

The bidding of the 10.5 acre, the size of 10 football fields, Finlay Mills in Parel by the National Textile Corporation (NTC) on Tuesday received a cold shoulder for the second time with a reserve price of Rs 745 crore.

“We received only one bid from Christy Products but it was invalid as the earnest deposit money was only Rs 1 crore as opposed to the mandatory Rs 100 crore,” said Ramesh Chandra, a senior official of the NTC.

As part of Phase I, the NTC had got Rs 2,200 crore from sale of its five mill land plots in 2005. And the first to be put on the block in Phase II was Finlay Mills.

However, in December 2008, it received quotations less than half its reserve price of Rs 1,065 crore.

While senior NTC officials had then maintained that the textile corporation would hold on to its rates despite the slump, recently they decided to re-invite bids at a reserve price 30 per cent lower than before.

The mill land areas — touted as the central business district — are reeling under a severe crisis as most of the projects, which are either in the last stages of completion or have been completed, are not finding any takers.

According to a recent report by global real estate consultancy firm JLL Meghraj on office space in the city, the vacancy rate has increased from 1.11 per cent at the end of 2007 to 4.78 per cent, with the addition of 6.89 lakh sq ft, in the last four months. The report said that by 2009-end, the vacancy rate would reach 9 per cent and prices would fall further by another 15 to 25 per cent.