News & Views on Indian Real Estate

Friday, August 01, 2008

Kolkata loses charm for real estate firms

Realty firms seem to have lost their appetite for properties in Kolkata, where developers such as Emaar MGF Land Ltd and DLF Ltd were fighting to secure plots for building luxury hotels. For the first time, a tender to lease out a prime 10-acre plot on the western fringes of the city is being scrapped because there was only one bidder. The Kolkata Metropolitan Development Authority (KMDA) had invited bids for two more properties, but the response to each was poor. KMDA officials had claimed that developers such as Emaar MGF and DLF had enquired about the properties, but none of them bid even for the 10-acre plot, which was to be leased for building a five-star hotel. Less than a year ago, Life Insurance Corporation of India (LIC) had set a new benchmark by buying a five-acre property on the eastern fringes of Kolkata for Rs276.20 crore, or Rs55.24 crore an acre. LIC has since announced it would build 50-storey towers on the plot.A KMDA official, who didn’t want to be named, confirmed that the tender for the 10-acre plot would be cancelled, but he wasn’t sure what would be done with the bids for the other two plots— one measuring five acres and the other 2.7 acres. “The bids aren’t attractive, but we haven’t decided yet,” he added.