• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Port Info

• Ships in Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• The Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

N. Ramakrishnan

Runnymede, a property belonging to HSBC in the Boat Club area of Chennai, which is to be sold through an electronic auction. - Bijoy Ghosh

Chennai , Aug. 2

IT may well be the first time in the country that prime residential properties are being sold through an electronic auction. The seller — the Indian subsidiary of the Hongkong and Shanghai Banking Corporation Ltd (HSBC), which has put seven properties in four cities on the block — is confident that the e-auction will attract more than the normal buyers.

The bank is confident of getting more than Rs 50 crore in all for these properties, and hopes to complete the sale in the next few months.

HSBC India will be the first in the group to conduct such a sale, according to bank officials. The first to come for auction in cyber space will be three flats in Mumbai's upmarket Malabar Hill, each over 2,000 sq ft, followed by an independent house in Chennai, a flat in Bangalore and two in Kolkata.

HSBC opted for an e-auction rather than the traditional route for the transparency that the bidding process offered and the speed at which the deals can be completed.

"The e-auction process will be transparent, open and fair to all bidders," said Mr Simen Munter, Chief Operating Officer, HSBC India. Each bidder can see the price another bidder has quoted without knowing the identity of the bidder, he added. The traditional method of selling — appointing a broker, advertising for the properties and then waiting for the highest offer — was time consuming and would result in a number of non-serious buyers wanting to look at the property, bank officials said.

In Chennai, the bungalow — Runnymede — is on an 11-ground plot (about 26,400 sq ft) in the upmarket Boat Club area. According to real estate industry sources, this property can fetch up to Rs 2 crore a ground (2,400 sq ft).

For the e-auction, HSBC has appointed C.B. Richard Ellis, an international real estate consultancy firm, as its adviser. Prospective bidders have to pay a deposit of Rs 5 lakh to participate in the auction. This will be adjusted against the bid amount in the case of successful bidders, while it will be refunded for others.

According to Ms Malini Thadani, Senior Vice-President - External Affairs, HSBC, the auction in Mumbai was to have been completed last week, but has been postponed due to the rains. The bank hoped to complete the sale next week.

The bank has put the properties on the block due to a change in its accommodation policy for senior executives. The bank has given them the option of choosing their own accommodation or staying in apartments owned by the bank. The properties that are being sold have been freed up because of this change in policy, she said.

Mr Munter said that the bank would fix a floor price for each of these properties. It would advertise in newspapers for these properties (this process has been completed in the case of Mumbai) after which the real estate consultant would walk prospective bidders through the process of the auction, giving them a chance to view the properties.

Mr Munter and Mr Kapil Bedi, who is in charge of purchases at HSBC, were confident that the e-auction route would attract more bidders than the traditional selling process. For the Mumbai properties, there were 43 bidders, including from overseas.

According to Mr Munter, HSBC will use an e-trading platform developed by A.T. Kearney, a consultancy, for the group worldwide. The bank used this platform for its online purchases and the Indian subsidiary was now using it for a sale process. The high level of IT literacy among the bank's target group was one of the reasons for HSBC to opt for the e-auction route to sell the properties, he said.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
New low-pressure area advanced by a day

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line