Park and Ride Plaza: Legal challenge turns off investors

Only 11 of 26 shops sold at auction for close to reserve price.

LAHORE:

Only 11 of the 26 shops up for auction at the Park and Ride Plaza were sold on Wednesday, as investors showed little interest in the sale amidst rumours of a court stay order.

Just 16 investors participated in Wednesday’s auction, compared to 62 at the first auction of shops in the plaza on January 26. Some Liberty Market traders have asked the Lahore High Court to stay the auction while a petition contending that the plaza violates zoning laws is decided. The LDA vehemently denied rumours that the court had granted the request, but the uncertainty appeared to have put off investors.

Not a single bid was received for a restaurant space of 2,560 square feet on the first floor, which had a reserve price of Rs35 million. The 11 shops on the lower ground floor successfully auctioned were sold for close to reserve price. They fetched a total of Rs47.025 million, while the combined reserve price was Rs43.800 million.

Shop number 27 fetched the highest above reserve price – it sold for Rs3.4 million, Rs700,000 above the reserve price. Shop number 1 sold for Rs6.75 million, just Rs50,000 above the reserve price.

In the first auction, the LDA had sold 13 shops on the ground floor for a combined Rs211.45 million. Shop number 1 sold for Rs20.2 million, while the asking price was Rs14.8 million.

The LDA suspended the auction of the remaining 15 shops on the lower ground floor. Three shops in the plaza have been reserved for widows and orphans on the orders of Chief Minister Shahbaz Sharif.

The bidding started at 11:30 am, one hour late, and ended at 1:30 pm. The LDA had advertised Wednesday’s auction for several days in the print and electronic media. It hired the marketing company Collier International to advertise the sale.

Published in The Express Tribune, April 7^th, 2011.