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Want to buy a Rs 100 crore plus property? Many luxury properties up for sale post demonetisation

Vandana Ramnani

Chillicious News

Super premium properties, whose price run into several crores, even over Rs 100 crore, are coming up for sale post-demonetisation. Consider this:

# Fort House, the home of Videocon Group in Mumbai, was sold last month for Rs 300-crore. Dawat-e-Hadiyah, a charitable trust of the Dawoodi Bohra community, had entered into an agreement to acquire the DN Road heritage property that has 1.50 lakh sq ft office space.  State Bank of India sold the entire building directly to recover its dues from the Videocon Group.

# Kodak House located on D N Road was bought by the Cathedral and John Connon School from Deutsche Bank last month, ending a hunt of almost eight years for additional space. It cost the school approximately Rs 74 crore, according to reports.

# A leading corporate house recently had sold its iconic south Mumbai guest house Alhambra, which was built by the sultan of Darsultan of Darbhanga, for around Rs 170 crore.

# An international real estate consultancy recently advertised for the sale of prime residential flats in Mumbai and a bungalow in Delhi’s Lutyens zone, both owned by corporates. Estimates suggest that the price of apartments could easily be around Rs 15 crore and that of the bungalow can run to over Rs 100 crore.

Almost five months after the government announced its decision to ban Rs 500 and Rs 1000 notes, a few multinational companies across the country are planning to sell properties that they owned for several years or acquired by way of mergers and acquisitions.

“After the note ban, there are a few sellers in the market today and these include financial institutions who are keen to get rid of non-performing assets. Some leading corporate houses are also planning to sell properties acquired by way of acquisitions and mergers or those they may have bought for use of their senior management,” say real estate experts.

These are all part of surplus assets owned by them. Selling properties for these companies is a business decision as after demonetisation they are certain that prices may not rise any further, they say.

“Most corporates are preferring to sell these properties to become asset-light in their balance sheets. These companies own a mix of properties – apartments ranging anything between Rs 2 crore to Rs 15 crore and plotted developments priced as high as Rs 500 crore,” says Shveta Jain, managing director – Residential Services at Cushman & Wakefield.

What attracts buyers to these properties is the clear title, the asset profile, location and the profile of the owner. Buyers are interested in these properties because the title is clear. These are historically premium properties commanding a great address and there is not much new supply in this category.

Expectations are also realistic and the buyer is assured of a time-bound closure of the deal. Also, companies who own these properties are generally detached from the entire sale process versus a property deal where the owner is an individual and selling a house is a sentimental decision.

Prior to demonetisation, Renuka Talwar, daughter of DLF Chairman KP Singh, acquired a bungalow on Prithviraj Road in September last year for Rs 435 crore from Kamal Taneja of TDI Infracorp. Located on a 4,925 square metre plot, the bungalow has a built-up area of around 1,189 square meters and was sold for Rs 8.8 lakh per square metre.

Such properties are typically evaluated by professionals and price is arrived at on the basis of premium transactions in the area.

Prices of such properties are decided on the basis of who the present owner is, the neighbours, the road, the last transaction is the benchmark and a premium is added to it to arrive at the closest valuation. “Other factors taken into account include the extent of the frontage of the building, the car parking space, layout of the building, neighbourhood profile,” says Somy Thomas, managing director, valuation services, Cushman & Wakefield.