India’s largest listed real estate firm DLF Limited bid Rs 1496 crore , and agreed to pay an additional Rs 143 crore as statutory charges (and another Rs 104 crore as stamp duty) to win, in an auction, 11.76 acres of prime land in Gurgaon in one of the most valuable land deals in the Delhi satellite.
Analysts say it is too early to see this as a revival of the real estate market in the National Capital Region (Delhi and its environs) and that the price DLF has agreed to pay may be because of the location of the land — in close proximity to Delhi and next to DLF’s sprawling Cyber City and Cyber Park developments.
The land was being auctioned by the Haryana State Industrial Infrastructure Development Corporation and had a reserve price of Rs. 686 crore. DLF’s subsidiary, Aadarshini Rear Estate Developers Private Limited, emerged as the highest bidder for the plot. There were three other bidders in the fray.
The land parcel is earmarked for mixed use development and is eligible for higher floor area ratio (FAR) ; the total saleable area including additional area based on TOD policy will be around 2 million square feet.
“This project is a strategic fit in the overall master plan of Downtown Gurugram as its location is next to the existing buildings of CyberCity, Cyber Park and future development of Mall of India. The development of this land parcel is envisaged in the near future and shall be positioned as a Grade A commercial complex in a similar genre as Horizon Centre in DLF 5 Gurugram,” DLF said in a statement.
It is also close to the Trident and Oberoi Hotels. The auctioned land includes existing office building of HSIIDC.
Last year Haryana Urban Development Authority (HUDA) auctioned a 10 acre plot for Rs 884 crore (multinational lifestyle and furniture giant IKEA won that auction).
“This is the highest-ever bid for any site for any public agency in the state till date,” said Rajasekhar Vundru, managing director, HSIIDC. It also reinforces the status of Gurgaon as the most preferred investment destination in India near Delhi, he added.
Despite the steep bid, DLF should make money from the deal, said an expert.
“This purchase increases coverage for DLF in the Cybercity commercial district. While the rate seems to be on the higher side, outbidding stiff competition from other players, DLF will be able to derive the maximum value due to synergy with its existing assets in the nearby locations,” said Vivek Dahiya, Managing Director – North, Cushman & Wakefield India.