Rs 2,669 cr cut-off for 10 Delhi hotel plots

The Delhi Development Authority is looking to make at least Rs 2,669.13 crore "" as indicated from the reserve price "" from the auction of ten hotel sites on September 25, 2006. Two-thirds of this sum is expected to accrue from four plots in Dwarka, for which the total reserve price amounts to Rs 1,812 crore.

Going by the current market rate, the reserve price of these plots in Dwarka is quite high.

For plots of 7.39 acres (321605.64 sq ft) and 6.06 acres (263996.6 sq ft), DDA has given a reserve price of Rs 723.10 crore and Rs 592.73 crore, which works out to Rs 15,927 per sq ft and Rs 15,928 per sq ft, respectively.

To put this into perspective, it may be stated that residential space in pockets of New Delhi's Defence Colony, Greater Kailash II, Lajpat Nagar, and Panchsheel Park sell at this rate. In contrast, 1,450-sq-ft apartments in Dwarka are being sold at between Rs 3,300 and Rs 3,600 per sq ft.

Delhi-based Arora Associates said commercial space near DLF Golf Club in Gurgaon was sold for approximately Rs 22,000 per sq ft. Going by DDA's last auction of hotel sites in March, the reserve price of these plots is expected to be beaten manifold.

For instance, at DDA's last auction, Emaar-MGF had bid more than 200 per cent of the reserve price for two hotel sites in Jasola. The company had spoken of Jasola as an upcoming business district.

Two hotel sites in Dwarka are likely to have structures containing 500 rooms each. Industry experts said given that the minimum cost of developing a five-star room was Rs 1 crore, those who successfully bid would be making an investment in excess of Rs 1,000 crore in the purchase of land and construction.

The size of the other two hotel sites being auctioned in Dwarka is 3.36 acres and 3.8 acres. DDA has put for them a reserve price of Rs 233.13 crore and Rs 263.38 crore, respectively.

This works out to Rs 15,927 per sq ft and Rs 15,928 per sq ft, respectively.

At present, there is only one five-star hotel""Uppal's Orchid "" in Dwarka. Given its proximity to the airport and connectivity with the Delhi Metro, the reserve price of these sites is expected to be beaten manifold.

The other sites being auctioned by DDA include a 1.51-acre plot with a reserve price of Rs 45.79 crore in Shalimar Bagh, a 3.25-acre plot (Rs 304.01 crore) in Paschim Vihar, 1.94 acres (Rs 145.74 crore) in Rohini Twin District Centre, 1.76 acres (Rs 48 crore) in Rohini Manglam Place, as well as two plots of 4.94 acres (Rs 244.3 crore) and 2.09 acres (Rs 68.95 crore) in Shahadra.

DDA had unsuccessfully tried to auction the two sites in Rohini in March.