Huda to slash reserve price for school sites

GURUGRAM: Huda is planning to slash the reserve price for school sites by 50% after a year-long struggle to find any buyer for the same in the city, where HSIIDC recently sold a commercial plot for a record Rs 1,496 crore.
Sources said the development authority had been unable to sell any plot earmarked for setting up schools in the past one-and-a-half years due to a high reserve price (Rs 10 crore per acre) and a strict deadline (only six months) for payments.

“Despite repeated listing, buyers have shown little interest in school sites put up for auction in different parts of the city in the last one year or so,” said a senior Huda official.

The last time Huda had auctioned school sites was in September 2016, when it sold off three plots for a total of Rs 135 crore. Two five-acre plots reserved for setting up senior secondary schools in sectors 47 and 56 were sold for Rs 60 crore each, as against a reserve price of Rs 34 crore. Another plot of 1.25 acre reserved for primary school in Sector 52 was sold for Rs 15.5 crore, as against a reserve price of Rs 8 crore.

Excited by the high bidding rate for school sites, Huda had then revised the reserve price upwards and fixed it at Rs 10 crore per acre. Besides, the development authority also changed the payment plan, making it mandatory to clear all dues within six months.

However, after a year of no-response and a huge inventory of unsold plots, Huda recently reviewed the performance of its estate offices and found out that school sites were not attracting enough buyers. It was found that the reserve price was higher than the prevalent market rates — private developers are selling school sites for Rs 3.5 to Rs 5 crore per acre in the city. Also, developers give a buyer 2-3 years to make the payment in instalments.

“Thus, it has been recommended that the reserve price may be reduced by 50% to clear the unsold plots,” said another Huda official.