Unitech bags largest land deal

Firm to develop Rs 1,582.84 crore project at Noida.

Unitech today bagged the country's single largest land development project of 340 acres in Noida for Rs 1,582.84 crore.

It emerged as the highest bidder in the Noida Development Authority (NDA) auction, edging out rivals DLF and Bangalore-based consortium ICity for the high-profile Express City project.

While declining to comment on the investment that the company would be putting in the venture, Sanjay Chandra, managing director, Unitech, said, "We have won the bid and will finance the entire project from internal accruals. It is only now that we are getting down to numbers and specifics of the product mix." The entire project would be completed by 2010, Chandra added.

Unitech outbid DLF, which had quoted Rs 1,401.46 crore for the prime Noida land, while ICity was knocked out in the technical evaluation stage, industry sources said.

This deal goes past the previous largest real estate deal of Rs 1,104.11 crore, which was what Reliance Industries paid for a property in Mumbai.

The closed tenders floated for the 300 acres at Noida, near Delhi, had received only three bids, one each from Delhi-based DLF and Unitech, and the third from Bangalore-based consortium Icity. Thirty-three applications had been sold by the NDA, which owns the land, for the tender.

The reserve price for the bid was Rs 789 crore while the earnest money was fixed at Rs 25 crore. Earlier titled NRI city, the project will now be called the Express City. The project was initially expected to garner Rs 3,000-5,000 crore. However, with the residential area being restricted to half of the total area, the valuation had to decline, an analyst pointed out.

According to the land use guidelines, half of the 300-acre land can be used for residential constructions, 12 per cent for institutional and 18 per cent for recreational parks. The remaining 20 per cent is for roads that must be built as a public-private partnership.

"It would be a fairly low-density high-end residential area, as there is restriction of population density of 250 people per hectare," Chandra said.

The big ticket auction has faced protests by local traders against the stringent qualification norms for allotment that allegedly cleared the coast of smaller players, paving way for the bigger ones. The major requirement for bidders was a turnover of Rs 500 crore, which was too high for individual players.

The process now, hinges on a final decision from the Allahabad High Court, which is hearing petitions filed by smaller players who have been excluded from the bidding process because of the tough eligibility criteria.

Chandra is, however, confident about the project. "We have no concerns. The court hasn't given out a stay order or any such thing. In large scale projects, it is a reasonable requirement by the government to ensure that the parties are financially sound."