MMRDA puts 9 BKC plots on the block, hopes to make ₹9k cr

The nine plots, all in BKC’s ‘G’ block, include five commercial plots with a reserve price of ₹4,82,992 per square metre of built-up area (BUA), which are being offered on lease for the first time

Mumbai: The Mumbai Metropolitan Region Development Authority (MMRDA) has put nine prime plots in the Bandra Kurla Complex (BKC) on the block, with an eye on shoring up revenues and reducing dependence on financial institutions. The nine plots have a combined area of around 53,461 square metres (around 13 acres), and the MMRDA is hoping to make at least ₹9,284.88 crore by offering them on long term lease, based on reserve prices mentioned in the tender floated on May 11.

All nine plots are located in BKC’s ‘G’ block (Hindustan Times)

The nine plots, all in BKC’s ‘G’ block, include five commercial plots with a reserve price of ₹4,82,992 per square metre of built-up area (BUA), which are being offered on lease for the first time. Among the four residential plots which have a reserve price of around ₹3,52,008 per square metre BUA, three were offered on lease earlier this year but did not find any bidders.

According to the tender document, all plots have a floor space index (FSI) of four, indicating the constructed floor area or BUA can go up to four times the plot area. Accordingly, the total permissible BUA on offer is 212,764 sqm, including 137,076 sqm commercial area and 75,688 sqm residential area. The largest plot, identified as C75, has a reserve price of ₹1,432.55 crore.

Despite the BKC’s prime status in the realty market, the MMRDA has struggled to find takers for its land parcels in the business district. Though commercial plots attract multinational giants, residential plots rarely fetch bidders, as had happened last year with three of the four residential plots on the block this time.

Industry experts blamed “astronomical” reserve prices for the feeble response earlier and warned that prevailing geopolitical conflicts posed an additional challenge this time.

“At nearly ₹5 lakh per sqm for commercial BUA, the entry barrier is so high that only a handful of global institutional investors can participate in the bidding process,” said a real estate expert who did not wish to be identified.

Large developers were currently prioritising completion of existing projects over long-term, high-capital lease commitments, the expert said. “The ongoing geopolitical situation is also creating uncertainty in financial markets as well, which may further discourage interested parties.”

The success of the tender is critical for the MMRDA, as the authority is currently executing infrastructure projects of more than ₹1.5 lakh crore, officials said. These projects include multiple Metro rail lines, the Sewri-Worli Elevated Connector, the Eastern Freeway extension, and the Thane-Borivali Twin Tunnel.

“Leasing the land banks can help generate significant non-fare revenue, helping us offload borrowings from financial institutions,” an MMRDA official said, requesting not to be identified.

In April this year, a 10,026.44-sqm plot in G block was allotted to Jupiter Lifeline Hospitals for a multi-specialty hospital, while a 5,117.85-sqm plot was allotted to DY Patil Education Group for an educational institute.