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The recent auction of plots in Navi Mumbai by CIDCO saw a tepid response, with only 15 of 47 plots receiving qualified bids, despite ongoing mega-projects that typically drive up property demand. Developers cited high base prices as the primary reason for the limited interest, arguing that the location of many plots did not justify the high rates. CIDCO, however, refuted these concerns, with Vice Chairman Vijay Singhal noting that prices were based on an independent market analysis by Knight Frank, not CIDCO. Some plots saw bids as much as 118% above the base rate. Godrej Properties, among successful bidders, purchased three plots in Kharghar for INR 716.58 crore. While the auction saw fewer bids, it highlights varying demand across locations in Navi Mumbai.
The latest auction of plots in Navi Mumbai has drawn a lukewarm response, given the premium real estate prices in the city and the record numbers seen in earlier times. Last week, only 15 of the 47 plots offered by the City and Industrial Development Corporation (CIDCO) received qualified bids. This poor response is surprising considering the ongoing mega-projects in Navi Mumbai, which typically drive up property prices. Advertisement
Developers attribute the lackluster interest to the high base rate set by CIDCO, which relies on revenue from plot auctions to fund its mega projects. Under Scheme 40, CIDCO offered 47 plots for residential, commercial, residential-plus-commercial, bungalow, and service industry use-20 in Kharghar, 10 in Ghansoli, and the remainder in Airoli, Dronagiri, Kalamboli, Kopar Khairane, Nerul, New Panvel (East), and Panvel (East).
While only 15 plots received the necessary three bids for allotment, another 10 plots received one or two bids, and 22 plots attracted no bids at all. These 22 plots were located in New Panvel (East), Panvel (East), Airoli, and Ghansoli. Among the developers whose bids were accepted were Godrej Properties, Satyam Lifescapes, Viraj Bhoir of Amber Developers, Shree Swami Enterprises, Ambe Refrigeration, Hari Krishna Buildcon, Giriraj World, Max Home, Abhinandan Builders, Abhinandan Developers, Majestic Dreams, Subhash Hariprasad Agarwal, and R K Infra.
Builders and office bearers interviewed by leading publications shared their thoughts on the same. Several believed that the location of the plots did not justify the bid price and that the current rates were at par with plots in premium locations. Representatives of CIDCO however have dismissed these concerns, stating the response they received was better than expected.
Vijay Singhal, CIDCO Vice Chairman And Managing Director, told reporters at HT that after selling 18 plots in their previous scheme, 34 plots sold within just two months, aligning with market appetite. Refuting the concerns about base prices, Singhal explained that the pricing was based on market rate analysis conducted by Knight Frank, an independent third party, and not by CIDCO. He highlighted that they received a INR 4 lakh/sqmt bid for a plot with a base price of INR 1.83 lakh/sqmt in Kharghar, indicating that bids were 21% to 118% higher than the base rate if considered high.
Godrej Properties purchased three adjoining plots in Kharghar's Sector 5A, a consolidated area of 26,477.87 sq mt, for INR 716.58 crore-averaging INR 2,70,633 per sq mt. Gaurav Pandey, Managing Director & Chief Executive Officer of Godrej Properties, stated that they aim to build a residential community that creates long-term value for its residents.
In conclusion, while CIDCO's recent plot auction in Navi Mumbai attracted fewer bids than anticipated, the outcome demonstrates a mixed response from developers. The high base prices set by CIDCO, justified through market analysis, may have contributed to the limited participation. However, the successful bids, including those by Godrej Properties, indicate that certain locations still hold significant investment potential. As Navi Mumbai continues to develop through mega-projects, the real estate market will likely see further fluctuations in demand and pricing.
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