Palm Beach Road plot fetches record price, but 18 CIDCO plots receive no bid
A plot of land in the prime location of Palm Beach road in Navi Mumbai has been auctioned for a record bid of ₹6.46 lakh per sqm. This rate is close to that of prime land in Mumbai and highlights the unprecedented demand for land in the area. Despite the high bid, there were no bids for 18 other plots in the auction, which industry sources blame on the high base price set by CIDCO and current market conditions. CIDCO earned a total of ₹1,170.80 crore from the sale of the plots.
NAVI MUMBAI
There is no stopping the unprecedented demand for land in the much sought after Palm Beach road area of Navi Mumbai. In the latest round of CIDCO auction for a plot along the prime location, a record bid of ₹6.46 lakh per sqm has been received. The rate industry sources say is close to that of prime land in Mumbai.
The plot is located at plot number 23 in sector 4 right at the entrance of Nerul from Palm Beach road. The residential cum commercial plot is of 2,459.33 sqm with an FSI of 1.5.
The plot is in fact the same that had fetched a record ₹6.72 per lakh sqm rate in the auction in March this year. The highest bidder Aramus Heaven LLP, was to pay ₹165.50 cr lease premium to CIDCO for the plot apart from 18% GST. The company however reportedly withdrew later, leading to the plot again being offered by CIDCO.
This time Falcon Electro-Teek Private Limited bid the highest among 4 bidders at ₹6,46,803 per sqm for the plot which will cost it ₹159.07 cr plus 18% GST. The second highest bid was of ₹6,26,000 per sqm.
Though the bid this time is less than last time, it is still around ₹1 lakh per sqm higher than the previous highest record of ₹5.54 lakh per sqm in the auction held in November 2022 for another Palm Beach road plot located in sector 20 of Sanpada. In fact, all the bids this time are of over ₹6 lakh per sqm.
Realising that the Palm Beach road plots are much in demand due to lack of availability of land in the area leading to the record bid last time being 6.5 times more than the base price of the plot, CIDCO this time increased the base price to a whopping ₹5,18,328 per sqm.
Explaining the high bid, Vasant Bhadra, president of Builders Association of Navi Mumbai (BANM) said, “These rates are for the location of the plot. There is a huge demand for big flats from 3 BHK to 6 BHK here. However, there is no plot left on the Palm Beach road and hence anything that is offered is grabbed.”
He added, “Several developers have been coming together to form companies and bid for such plots. It helps if they themselves want flats in the building to be constructed as it makes them cheaper for them and a large stock gets automatically sold.”
Stated Haresh Chhedda, former president of BANM, “There is intense competition among the developers to grab land in the much sought after area. This is leading to unrealistic bids which do not really make any sense. CIDCO is fueling this race by increasing the base price manifold, which is not right.”
Cautioned Manohar Shroff, senior vice president of CREDAI-MCHI, Navi Mumbai, “The previous bidders were a group of developers who had come together to ensure the highest bid and distribute the cost. They had even taken bookings. It was obviously not feasible and hence the plot was returned.”
He added, “No lessons have been learnt still. This is not good for the market here. The price is almost the same that is being quoted in a place like Juhu, close to the Bachchan bungalow.”
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₹1,171 cr windfall for CIDCO but shockingly no bids for 18 plots
CIDCO has earned a whopping ₹1,170.80 cr from the sale of 18 plots in the auction. However, shockingly there were no bids for 18 of the 36 plots on offer which included bungalow plots. Industry sources say this is unprecedented and blame CIDCO for the high base price and market conditions.
Said Vasant Bhadra, “The Palm Beach plot was the only plot in which there was serious interest. The rest that were bid for received reasonable response while plots even in Vashi and Kharghar apart from the bungalow plots received no bids.”
He stated, “CIDCO has taken the base rate to unreasonable levels, scaring away the buyers. Besides, unlike the open tender system where bids were made in each other’s presence and everyone had an idea of the price to bid, the system now gives no clue on what is the right bid to make. CIDCO needs to change its tender system.”
According to Haresh Chheda, “It was in the pre-1995 era that one saw no bids for CIDCO plots. What has happened now may be unprecedented but expected for those who saw it coming.”
He explained, “The new UDCPR of the government has helped increase FSI for the plots through various incentives. This has led to an increase in supply in the MMR region. In such circumstances, the high base price of CIDCO does not make sense. The market has already peaked.”
Stated Chheda, “Barring the Palm Beach road plot, all the other plots that were bid are mostly in the range of ₹1 to 3.5 lakh per sqm. Also these plots were bid by the developers. Most of the bungalow plots did not get bids as standalone buildings are not in fashion.”
Said Manohar Shroff, “CIDCO has to understand that there is a limit to how high it can take the prices. Individuals buyers felt that the base price was very high. There is a lack of enthusiasm and the height restrictions due to the proposed airport is also a factor.”
Said B N Kumar, convenor of Alert Citizens Team, “The auction bids show speculation bidding on one side as well as absolute lack of interest on the other. Redevelopment in the city is offering a huge supply of premium flats and hence CIDCO needs to undertake a tender process with reasonable rates.”
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