U.S. Consulate Buildings on Sale in India

Bangalore: The U.S. consulate properties are being auctioned in India by the U.S. government which has created a buzz among prominent real estate players in Mumbai, who are generating more interest and bidding high on such properties. According to an industry source, "Negotiations are at an advanced stage and the deal is expected to be concluded in less than a month,'' reports Nauzer K Bharucha & Reeba ZachariahNauzer K Bharucha & Reeba Zachariah of TNN.

For instance, Lincoln House in Mumbai a U.S. consulate is being auctioned, for which the U.S. government has quoted a reserve price of 850 crore.  And according to market sources, Tata Housing is expected to secure the deal for Lincoln house by bidding an amount close to the reserve price of 800 crore.  However, "Most big developers found the price too high because the development potential of the plot is limited due to coastal regulation zone (CRZ) restrictions and the heritage tag the property enjoys,'' according to sources.

DTZ international property advisors, group of exclusive representatives appointed by U.S. government to find buyers for the consulate buildings, stated on this context that "There is a strong potential demand for residential units from within the neighborhood itself. The business families residing here have a strong tendency to continue to grow and expand in the vicinity and willingly pay a premium for the location,” reports Economic Times.

The Lincoln House property has a wide portion of open land in its sea-facing backyard, which includes a tennis court and a small garden patch.  "With the permission of the BMC's heritage committee, the winning bidder could build around the heritage structure,” said a property consultant.

Furthermore, Washington House, the Altamount residential building, has quoted a fixed price of 350 crore and it is presumed that the property has got three bids by now. And according to sources, the Lodha Group has proposed 400 crore for this property, which is expected to be the highest amount among three bids.

Similar to Lincoln House, Washington House is also a listed Grade III property and comes under coastal regulation zone (CRZ) II. To acquire the consulate property the bidder has to get a clearance from the Union external affairs ministry, state government and local authorities. According to the bidding memo, the U.S government should get a prerequisite clearance for sales from the Minister of External Affairs (MEA) and state/local authorities within the period of 90 to 180 days from the date of receiving the conformation letter from the bidder. If there is any delay in receiving the clearance letter within the stipulated time, then the U.S government can withdraw the deal and refund the entire amount to the bidder. 

The memorandum describes that "The sale can be affected subject to an approval from the ministry of external affairs, government of India, and from the state government/authorities, as may be applicable. The time-frame for grant of such approval is not definite and on receiving such approval(s), the United States government will notify the successful bidder.”