Sahara chief Subrata Roy. Photo: AFP
Sahara chief Subrata Roy. Photo: AFP

Selling Sahara land parcels won’t be an easy task

In India, the real estate sector has seen a prolonged slowdown, making buyers wary of buying land, particularly if the property is embroiled in legal issues

Bengaluru: Sahara Group, which has many land parcels in India and hotel properties overseas, has been trying to sell some of them over the last couple of years, but it’s been far from easy.

On the domestic front, the largest transaction it managed to close was the sale of a 185-acre parcel of land to Gurgaon-based real estate company M3M India Pvt. Ltd for 1,211 crore in December 2014. The land in Chauma near the Gurgaon-Delhi border, was one of four land parcels Sahara said it had signed sale agreements for. The other land parcels are in Jodhpur, Vasai and Pune.

These are part of the ten properties Sahara was allowed by the Supreme Court to sell. A part of the Aamby Valley project in Maharashtra, about 600 acres, was also allowed to be sold.

In early 2014, Sahara sold a 100-acre plot in Ahmedabad to city-based HN Safal Group for around 411 crore.

A report in The Times of India on 29 November 2015 said Sahara had sold the 265-acre land parcel in Vasai for 1,111 crore to Sai Rydam Realtors, which planned to build a township there.

Details of the other transactions couldn’t be ascertained.

For more than two years now, Sahara has been negotiating the sale of three of its overseas properties—Grosvenor House in London, the more than a century-old Plaza Hotel overlooking New York’s Central Park, and the Dream Downtown Hotel in the same city.

In February, Mint reported that Sahara told the Supreme Court that it has sold Grosvenor House hotel in London to the state of Qatar.

While the sale price was not disclosed, another sale transaction for the Plaza Hotel and Dream Downtown is underway with Russia’s VTB Bank, the court was informed.

A 17 March 2016 Bloomberg report said that the Plaza Hotel and the Dream Downtown were poised to go on sale in April as a package.

Billionaire brothers David and Simon Reuben hold the mortgage on the Plaza and have scheduled a foreclosure auction for 26 April, the report said. The Reubens bought the loan from Bank of China Ltd after a default by Sahara, the report said.

In India, the real estate sector has seen a prolonged slowdown for more than two years now, making buyers—both developers and investors—wary of buying land, particularly if the property doesn’t come with a clear title or is embroiled in legal issues.

On 17 March, the auction of Kingfisher House, the headquarters of Vijay Mallya’s grounded Kingfisher Airlines Ltd in Mumbai, failed to draw any bids. The base price for the multi-storey, 17,000 sq.ft building was set at 150 crore.

Property consultants said it will not be easy to find buyers for properties unless they are competitively and reasonably priced.

“There were 9-10 land parcels that Sahara was trying to sell but some of the deals fell through in the last stage. Sahara has more than 100 land parcels in Tier II and III cities.... Today, if those are put up for sale, it is doubtful if they will find many takers, unless they are very well-priced to attract buyers," a property consultant, who was involved in a Sahara land sale transaction, said on condition of anonymity.

Sahara has filed a defamation case in a Patna court against Mint’s editor and some reporters over the newspaper’s coverage of the company’s dispute with the Securities and Exchange Board of India. Mint is contesting the case.