New Delhi: Realtor Indiabulls Real Estate will pay more than double the asking price for a plot of land in central Mumbai, state-run National Textile Corp (NTC), which sold the land, said on Friday.
Indiabulls, which counts HSBC and Fidelity among investors, is paying double the asking price to avoid losing the auction to other developers desperate for stock in the land-starved city.
Indiabulls will pay Rs1,505 crore ($326 million) for the 8.37-acre plot of NTC’s Bharat Textile Mills, which had a reserve price of Rs750 crore ($162 million).
DB Realty, Peninsula Land and Lodha Developers were among the other bidders for the plot.
Last week, Indiabulls agreed to pay Rs474 crore ($103 million) for NTC’s 2.39-acre Podar mill land in central Mumbai, which is home to many textile mills that are not in use anymore.
Indiabulls officials were not immediately available for comment.
NTC sold both land plots through an online auction.
Skyrocketing prices in most recent Mumbai land auctions have raised concerns over an asset bubble.
Property prices in major Indian cities such as Mumbai and Delhi have nearly doubled in the past year as home and office buyers returned to the market, lured by a recovering economy and low mortgage rates.
Mumbai is rated among the most expensive office locations in the world. Earlier this year, Lodha Developers paid more than twice the asking price to win a plot in central Mumbai for $850 million, in what is the single largest land transaction in the city.
The NTC auction is part of the firm’s sale of mill land across major cities such as Mumbai, Indore and Bangalore to fund its modernization programme.
NTC hopes to raise a total of Rs8,000 crore this fiscal year from land sale and would come out with at least eight more land auctions in that period, K. Ramachandran Pillai, chairman of the state-run firm, told reporters on Thursday.
This will include about 50 acres of land across Mumbai, Bangalore and Indore, he added.