Mumbai: MMRDA extends bidding date for lease of two land parcels in BKC

The two plots that are up for lease are in G Block of BKC, which houses several multinational companies, banks, and also has the US consulate in its vicinity.

The Mumbai Metropolitan Region Development Authority (MMRDA) has extended the bidding date for the lease of two land parcels in India's costliest commercial district, the Bandra Kurla Complex (BKC), to September 29, 2023. The land parcels measure 13,168 sq metres (sq m) in total.

In May 2023, the MMRDA had floated bids for an 80-year lease of these plots, hoping to collect Rs 2,928 crore. Now, the last date for the submission of the bids has been extended owing to clarifications related to foreign direct investment (FDI) and Goods and Services Tax (GST) that are awaited from the government, MMRDA officials told Moneycontrol.

Where are the two plots?

The two plots that are up for lease are in G Block of BKC, which houses several multinational companies, banks, and also has the US consulate in its vicinity.

One of the plots, named C-13, measuring 7,071 sq m and with a permissible built up area of around 4.84 lakh sq ft, has a reserve price of Rs 1,550.25 crore. The other plot measuring 6,096 sq m has a permissible built up area of 4.30 lakh sq ft,  and a reserve price of Rs 1,378 crore.

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Mehul R Thakkar

Special Correspondent|Moneycontrol

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While only commercial buildings may be constructed on the plots, however, the MMRDA may allow mixed use subject to approval from the Maharashtra government. Under this, 30 percent residential construction may be allowed on the plots.

Bid response

"We have seen good response in the pre-bid meeting from global as well as domestic players, and we expect to close this in the coming months. The extension in the bidding date is purely on account of clarifications awaited from the government in relation to FDI norms and GST taxation. Once we receive a reply, we will upload that and conclude the bidding procedure," a senior MMRDA official told Moneycontrol.

Past deals

In October 2022, MMRDA had announced that Japan's Sumitomo Corporation, through its subsidiary Goisu Realty Private Limited, had submitted the winning bid for the lease of two land parcels in BKC for 80 years, for a sum of Rs 2,067 crore. In 2019, the same group had won the bid for a 12,400 sq m land parcel, for Rs 2,238 crore.

Also read: Japan's Sumitomo wins auction for leasing 2 land parcels in Mumbai's Bandra Kurla Complex at Rs2,067 crore

The BKC is among the most premium commercial districts of India and houses, among others, the National Stock Exchange, Bank of Baroda, Indian Oil, Reserve Bank of India, etc. In the near future, the BKC will have a terminal for the upcoming Mumbai-Ahmedabad bullet train,  and the Maharashtra government is also going to construct an International Financial Service Centre (IFSC) at BKC.

Office space leasing

Gross office leasing is expected to close at 40-45 million sq ft across the top six markets in 2023, according to a report by real estate consulting firm Colliers India released in August 2023.

The six cities are Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune. Bengaluru is expected to close at 12-14 million sq ft, Delhi-NCR at 9-11 million sq ft, Chennai at 7-9 million, and Hyderabad, Pune and Mumbai at 4-6 million sq ft, the report said.

Also read: Maharashtra forms panel to study FSI premium in Bandra-Kurla Complex

During H1 2023, the technology sector led the demand for office space with a 24 percent share, followed by the flex space, and engineering and manufacturing sectors, at 18 and 17 percent, respectively.