In another clear indication of the slump in the real estate sector, over ten acres of prime property in Mumbai went abegging as most major real estate developers remained disinterested.
State-owned National Textile Corporation, which had invited tenders for its 10.8 acre Finlay mill in Parel, received less than half the reserve price forcing the PSU to go for a re-tender.
“It is indicative of the slowdown in the real estate sector,” said K Ramachandran Pillai, chairman, NTC. “We had expected Rs 1,065 crore for the mill but the highest bid that we received was less than half that price. We are going for a re-tender by the end of this month with a 20 per cent lower reserve price.”
In 2005, NTC had sold five mills in the metro with a cumulative area of 49 acres and had managed to raise Rs 2,021 crore in the process, much higher than what was expected. This year's reserve price was based on increase in property prices in three years but none of the players like DLF, Indiabulls or Lodha Group who had acquired mills in 2005, participated.
“In 2005, Kohinoor Mill No 3 was sold at Rs 15,000 per sq ft, but this time around the maximum we got was only Rs 10,000 per sq ft. Prices have generally fallen by 20-30 per cent but in some cases it has dipped by 50 per cent,” Pillai said.
NTC plans to sell 50 acres of land spread across five mills. Pillai said that even with the lower reserve price he would be able to raise Rs 3,000-3,500 crore. After the sale of Finlay mill, Kohinoor Mill 1 and 2 in Dadar with 13 acres would be put on the block.