Tata Housing bids to buy US consulate buildings

The American consulate properties have generated considerable interest in Mumbai's real estate circles. "Negotiations are at an advanced stage and the deal is expected to be concluded in less than a month,'' said an industry source tracking the sale. The US government had set a reserve price of Rs 850 crore for Lincoln House, but found no takers when it invited bids late last year. "Most big developers found the price too high because the development potential of the plot is limited due to coastal regulation zone (CRZ) restrictions and the heritage tag the property enjoys,'' said the source. It was then that the Tata Group stepped in with its offer. Market sources said indications were that the Tatas may have quoted an amount "close to the reserve price'' . Another property market insider claimed that the salt-to-software group has already made an upfront payment for the Breach Candy property. A builder, not wishing to be identified , told TOI that "they (Tata officials ) are telling people they have taken the consulate property for development'' . Tata Housing MD Brotin Banerjee and Tata Group spokespersons were unavailable for comment despite repeated attempts by TOI to contact them over the past two days. DTZ international property advisors, retained by the US government as its exclusive representative to find buyers, said in its bidding memorandum for Lincoln House, "There is a strong potential demand for residential units from within the neighbourhood itself. The business families residing here have a strong tendency to continue to grow and expand in the vicinity and willingly pay a premium for the location.'' The property has a large piece of open land in its sea-facing backyard, which currently houses a tennis court and a small garden patch. "With the permission of the BMC's heritage committee, the winning bidder could build around the heritage structure,'' said a property consultant who gave the example of Colaba's Buckley Court where a skyscraper was build without demolishing the heritage property. The Altamount Road residential building, Washington House, has a reserve price of Rs 350 crore and is believed to have received three bids. Sources said the Lodha Group has already offered Rs 400 crore, which may be the highest of the three bids for this over half acre property. Washington House too is a listed Grade III property like Lincoln House and falls under CRZ II. The floor space index-the ratio which defines how much can be built on a plot-is restricted to just 1.33 on both these properties. The US property sales will have to be cleared by the Union external affairs ministry and state government/local authorities . The bidding memorandum said the US government expects to procure clearances from the MEA and state and local authorities for the sale within 90 to 180 days of getting the confirmation letter from the winning bidder. However, if the clearance does not come through within this period, the US government may cancel the transfer of property and hand the money back to the bidder. "The sale can be effected subject to an approval from the ministry of external affairs, government of India, and from the state government/authorities , as may be applicable. The time-frame for grant of such approval is not definite and on receiving such approval(s), the United States government will notify the successful bidder,'' said the document. "However, in the event the US government is unable to obtain the approval within 90-180 days, it may terminate the arrangement of prospective transfer of the property to the successful bidder and refund the money deposited by the successful bidder...Alternatively, the US government may approach the successful bidder for a mutual decision on extension of the time limit for obtaining the said approval from the ministry of external affairs,'' it said.

Source: http://economictimes.indiatimes.com/markets/real-estate/news-/tata-housing-bids-to-buy-us-consulate-buildings/articleshow/12157476.cms