A dozen real estate companies in Mumbai, including Oberoi Realty, have bid for sale of transferable development rights (TDR) for over 3 lakh square feet, which could fetch the Mumbai Metropolitan Region Development Authority (MMRDA) about Rs 150 crore. The 3.22 lakh square feet of TDR on auction was generated from slum rehabilitation projects at Nirlon and Nesco plots in Goregaon and Ajgaonkar in Jogeshwari.
TDR is generated when the developer surrenders his land to the government and agrees to rehouse slumdwellers or project-affected persons free of cost. In lieu, he is issued a TDR certificate that gives him additional construction rights in the suburbs, but only to the north of the plot he has surrendered.
Whether MMRDA will get the projected Rs 150 crore will be announced after four weeks.
The highest bid it received for the Nirlon Plot was Rs 4859 per square foot. On the Nesco plot, developers agreed to pay as much as Rs 4,739 per square foot. “Each developer bid for a minimum of 500 square meter at a given price. MMRDA will now try to sell the entire 3.22 lakh square feet at the highest bid price, which developers who bid at a lower price may or may not agree to pay,” said one developer who participated in the auction and did not wish to be named.
Developers can load TDRs they purchase from these plots only on projects that are located north of Nirlon, Nesco and Ajgaonkar, where property prices are typically lower.
MMRDA, however, is confident that it will be able to sell these TDRs at maximum price. “Except for Oberoi Realty, all the other developers bid between Rs 4205 per square foot and Rs 4859 per square foot so we are confident that we can conclude the deal close to the highest bid,” said Anil Wankhede, Deputy Metropolitan Commissioner (Land and Estate) of MMRDA. Oberoi Realty was the lowest bidder and wanted to bid for the entire 3.22 lakh square feet, Wankhede added.
Market analysts said prevailing TDR rates were in the range of Rs 4,000-4,500 per sq. ft. Typically, when the government sells or auctions TDRs, they are priced at a lower rate than when private companies sell TDRs. The highest bid of Rs 4859 per sq ft received is indicative of hardening TDR prices in Mumbai, analysts said. TDR prices in Mumbai have been steadily increasing since March this year after the government decided to change their pricing mechanism.
Companies that participated in the auction include Saroj Landmark Realty, Kunal Realtors, Aristo Realty, Bhoomi Construwell, Spade Realtors, Sapphire Land Development, Aakash Universal, Valji Sejpal & Co, Steel Plant, Streamline finance & Investment, Blue Diamond Construction Company and Oberoi Realty.
