US consulate property evinced little interest due to lack of scope for redevelopment
Restriction on redevelopment and uncertainty over other approvals have led to the US consulate's South Mumbai property, Lincoln House at Breach Candy, being finally sold about . 100 crore below its initial reserve ` price of ` . 850 crore. The sprawling three-storey house is being sold at about ` . 750 crore to Cyrus Poonawalla, chairman of Poonawalla Group that includes biotech company Serum Institute of India.
Poonawalla, a prominent personality in horse racing, confirmed the deal for the house, which is a mere 10-minute drive from the Mahalaxmi Racecourse. The 2-acre Grade-III heritage property at Breach Candy has a built-up area of around 50,000 sq ft. “It's a beautiful house, we will use it as our residence,“ Poonawalla told ET.
The Poonawallas will make few changes to the house, which was earlier used as an office by the US consulate. The deal will conclude in a few weeks after completion of certain documentation process.
The property has been in the market since the past five years, but there were no takers, given that there was no redevelopment potential for it. Initially, when the sprawling property that carries grade III heritage tag, was put on the block in 2011, the reserve price . 850 crore.was set at ` While few developers, including Tata Housing Development Company, had evinced interest in the property then, their bids were below the reserve price. Tata Housing was the sole bidder for the property at a reserve price of ` . 850 crore. Recently, Tata Housing Development Company also backed out of the deal, given the development restrictions.
Few developers were also evaluating the property, but they decided not to bid for it in the face of the uncertainty surrounding the heritage tag, approval from the ministry of external affairs and restriction on redevelopment, said two realtors who had planned to bid for the property.
They said that the property was best suited for an end-user as it would not involve complexities that a developer would have faced for redeveloping it.
After the US Consulate shifted into its new premises in the Bandra-Kurla Complex, it had put up two of its South Mumbai properties -Lincoln House and Wash ington House -for sale in June 2011 with a reserve price of ` . 850 crore and ` . 350 crore, respectively.
Of these, Washington House at Altamount Road in South Mumbai was bought by realty developer Lodha Group in 2012 for ` . 341.82 crore, also below the reserve price.
Built in 1933, the palatial house was earlier owned by the Maharaja of Wankaner until 1957, when it was leased to the US consulate. Leading British architect Claude Batley, whose work includes landmarks such as the Bombay Gymkhana, had designed the Lincoln House.
In a sluggish property market, this is the second large bungalow transaction that has taken place in the past week. On September 7, industrialist Kumar Mangalam Birla emerged as the highest bidder for the sea-facing 30,000-sq-ft bungalow Jatia House in South Mumbai's Malabar Hill locality with a bid of ` . 425 crore.
The Jatia House deal is also expected to be concluded in a month's time. This is the most expensive bungalow deal overtaking Maheshwari House transaction that took place in 2012 . 400 crore.at `
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