Commercial auction: Investors in no mood to bid high

Out of five bids, four below reserve price.


Our Correspondent August 21, 2013
A Two-day commercial plots’ auction was held by the Capital Development Authority (CDA), disgruntled investors led a two-hour boycott of the session.ILLUSTRATION: JAMAL KHURSHID

ISLAMABAD:


A number of interesting developments surfaced on the first of a two-day commercial plots’ auction held by the Capital Development Authority (CDA) on Tuesday, foremost among them a two-hour boycott of the session by disgruntled investors.


Desperate to shore up revenues through the sale of land, city managers faced reservations of bidders that resulted in a brief boycott of auction proceedings and surprisingly low offers made by investors for commercial plots in the capital.

A member of the auction committee confided that bids offered by investors on the first day surprised committee members. “We saw the worst ever auction results. Only five commercial plots out of 31 received bids, out of which four were below CDA’s reserve benchmark price.”

On the first day we succeeded in selling only one commercial plot as the CDA board will turn down bids lower than the reserve price, he added.

According to insiders, the auction began on time but at around 1pm, a group of investors led by a property dealer, complained about the recently introduced by-laws  for auctioned commercial plots and slow processing of files despite submissions of approved bids. Charges levelled by them gave others courage to speak up. Other investors complained about the hegemony of a group of investors who always manages to win bids in connivance with CDA officials, the official said.

Another issue that sparked controversy was the increase in the size of car parks for commercial plots. “We weren’t taken consulted before amending the by-laws. If we cut out 200 square yards for parking from a 600 square yard plot how are we supposed to make money? The real estate market in Islamabad is already witnessing a downward trend,” said a property dealer who attended the auction. The group then asked other participants to boycott the proceedings which remained suspended for over two hours.

Talking to The Express Tribune, CDA Director Public Relations Asia Gul said, “CDA assured the investors their grievances would be addressed at the earliest.”

For the two-day auction, city managers have identified 31 commercial plots in various sectors. The plots are meant for construction of restaurants, hotels, petrol pumps, wedding halls, vegetable markets, or other ventures. There are nine plots in Sector I-8 Markaz, eight in F-11 Markaz, three in Sector G-5, one each in sectors I-9, I-10, D-12 and F-7 and four in Sector I-11/4.

Published in The Express Tribune, August 21st, 2013.

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