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Our Bureau

Chennai , Nov. 23

AN Andhra Pradesh-based industrialist, with interests in cotton seeds, spinning mills and sugar, has bid the highest for the property of Standard Motor Products of India Ltd (now in liquidation), located at Perungalathur on the outskirts of Chennai.

The industrialist is believed to have bid about Rs 135 crore, according to sources.

The property, including 57.84 acres of land, buildings, plant and machinery, stores, raw materials and vehicles, was put up for auction on Tuesday by the Official Liquidator of the Madras High Court following orders by the court.

Officials in the office of the Official Liquidator declined to provide details, stating that the matter would come up before the High Court on Wednesday. At least 10 parties had evinced interest in the auction, including the MAC group, the Chettinad group and some property developers. While most of the bids were in the Rs 70-crore to Rs 80-crore range, a couple crossed the Rs 100-crore mark, according to the sources.

Those connected with the real estate industry in Chennai were divided on the winning bid amount. Without wanting to be quoted, a few felt that a price of Rs 90 crore, at about Rs 1.3 crore an acre and another Rs 15 crore-Rs 20 crore for the steel scrap in the premises would have been more realistic.

However, they pointed out that a major plus point was that the title for the property would be clear as it had been auctioned by the High Court. It was difficult getting clear title for properties of this extent in Chennai, they said.

Another section of realtors said the price was in line with market trends. They put a figure of Rs 2 crore an acre and with the large quantity of steel scrap in the premises, the winning bid amount seemed all right, they said.

According to them, there is at least 20,000 tonnes of steel scrap in the form of raw material and structural steel in the building and plant.

One property developer said the Perungalathur property, along National Highway 45, would be ideal for an IT park. When a major software development centre is coming up at Maraimalai Nagar, which is further away from the city than this property, why cannot this be developed as an IT park, he asked.

A real estate consultant said the Standard Motor property had a 1.7-km frontage but a depth of 400-500 metres. This posed a problem in developing an IT park, he said.

However, according to real estate experts, the kind of property development that the winning bidder can take up depends entirely on what category the property is classified and whether it can be re-classified without any hassles.

More Stories on : Mergers & Acquisitions | Real Estate & Construction | Tamil Nadu

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