Gurgaon: Real estate major DLF has snapped up an 11-acre commercial plot in Udyog Vihar, the office hub opposite Cyber City in Gurgaon, for a record Rs 1,496 crore. The price is the highest any government agency in Haryana has received through an auction, and is more than double the reserve price set for it.
For the cash-strapped Haryana Haryana State Industrial and Infrastructure Development Corporation (HSIIDC), which put the plot at Vanijya Nikunj in Udyog Vihar Phase 5 on the block, this single deal is equivalent to 10% of the total amount it has to repay banks on account of loans taken by it.
Since the area has been notified for transit-oriented development (TOD) that allows a real estate developer to purchase higher FAR (floor area ratio) — which in simple terms means more floors and a bigger builtup area than what is usually permitted — DLF will have to pay an additional Rs 143 crore as statutory TOD charges, besides registration fee estimated at Rs 104 crore to the revenue department.
A senior government official in Chandigarh, who did not wish to be named, said, “The auction price is going to put Gurgaon once again in global news. Skyrocketing prices of land stands testimony to growing economic fortunes of the city.” The official said other than DLF, major companies like Spicejet Limited, Emaar India, Tata Realty and Infra, Bharti Realty, Central Park, JLL, Ambience, CBRE, GMR and Indiabulls Real Estate had participated in the pre-bid meeting.
HSIIDC owes almost Rs 14,000 crore in loans across several branches of 18 banks. Sources in the industry agency said the reserve price for the land was set at Rs 676 crore, considering FAR as 175%. Up to 350% FAR is allowed in a TOD zone, an official said, adding DLF could buy additional FAR for the Vanijya Nikunj plot if it wishes to.
TOI had earlier reported that HSIIDC was in the process of auctioning multiple industrial plots across the state to generate cash. More than 1,300 such plots have been put on sale by HSIIDC. Of these, two plots were in Gurgaon, the most prime location. The other plot in the city, a 20-acre parcel off Dwarka Expressway, carved from land for the Global City project, has not, however, found any takers.
In October 2017, Huda had auctioned a 10-acre plot for Rs 884 crore to multinational lifestyle and furniture giant IKEA.
HSIIDC managing director Raja Shekhar Vundru said the deal will augment the corporation’s efforts to ensure a steady revenue stream. “This will be a new phase in Gurgaon’s redevelopment,” he said, adding that for the first time, 50% of the payment will be made within 60 days. “We’ve planned more auctions across the city in the next few months. This deal should trigger the real estate market and help revive business sentiment in the city,” he added.
Managing director of DLF Home Developers Devinder Singh confirmed the deal but did not give any detail. In a letter to the Bombay Stock Exchange and National Stock Exchange, DLF named its subsidiary Aadarshini Real Estate Developers Private Limited as the successful bidder.