DLF, Nitesh, HDFC vie for Beacon House
DLF, Nitesh Estates and HDFC Realty are amongst the bidders reportedly in the fray to acquire NRI tycoon C Sivasankaran’s Beacon House, located off the upmarket Cenotaph Road in the heart of Chennai. The 3-acre property, a former residence of UB Chairman Vijay Mallya when he controlled Best & Crompton (B&C), may fetch as high as Rs 225250 crore, sources said.
Mr Sivasankaran has mandated CB Richard Ellis to sell the property through an auction, with five bidders indicating early interest. While multiple sources confirmed interests from DLF, Nitesh Estates and HDFC Realty, unconfirmed reports indicated that local developer Arihant and Bangalore-based Sobha Developers are also in the fray.
Mr Sivasankaran had acquired the property in early 2006 for Rs 100-110 crore, sources said.The bidders, like DLF and Nitesh, may be eyeing the property for premium residential units, which, going by the current FSI of 1.5, could see 4 lakh sq ft of fresh development. The area has houses of leading industrialists, including Murugappa Group family members, and Japanese Consulate. Recently, DMK leader and son of chief minister MK Karunanidhi, MK Stalin, has moved there.
It is believed that a leading local developer True Value Homes may sit down with HDFC Realty for joint development, if the latter shows up with the winning bid. Earlier, True Value Homes had attempted to join with Mr Sivasankaran for developing premium residential apartments on the land.
Several local real estate sources said, in view soft market conditions, the maximum price it can fetch is Rs 3.25 crore per ground (56 grounds in 3 acre). Recalling the objections raised in the past over building multi-story buildings in the posh area, the realty sources added that it is not easy to take up development unless the bidder is familiar with the local conditions.
However, the national players, which may view Chennai as a more sable market in terms of real estate prices, may put in an aggressive bid that could take the auction price t Rs 225/250 in the highest band. A few months back, Bangalore-based Nitesh Estates made a winning Rs 640-crore bid for a nine-acre plot on Chamiers Road, which is in close to Beacon House.
Nitesh is in the midst of developing a one million sq ft mixed use development including luxury hotel, retail, commercial space and serviced apartments.
Beacon House came to the fold of UB chairman Vijay Mallya after he acquired B&C. Later, when the company was acquired by Indonesia’s Polysindo, it decided to sell the property making use o the scrapping of urban land ceiling act. Since Mr Sivasankaran had picked up stake in B&C, it helped him to clinch the deal.
Source: Economic Times, April 18, 2008.
