The auction by the Greater Mohali Area Development Authority turned out to be a flop show as 37 of the 49 sites offered went unsold on Friday.
As many as 33 commercial sites, including single-storey shops, booths and shop-cum-offices, 14 residential sites and one each for a primary school and a cinema were put on auction.
Surprisingly, GMADA did not find a successful bidder for any of the 14 residential sites. Sources in the real estate business blamed it on high reserve prices.
The saving grace was the sale of 12 sites that went under the hammer for Rs 22.22 crore against their total reserve price of Rs 18.58 crore. These included one institutional and 11 commercial sites.
The highest bid was for the primary school site in Sector 68 that was purchased by Arya Vrath Educational Society for Rs 5 crore against the reserve price of Rs 3.52 crore. A single-storey shop in Sector 60 went for Rs 2.58 crore against the reserve price of Rs 1.5 crore.
Other sites, however, did not get a good premium. For instance, an SCO site in Sector 68 was sold for Rs 3.7 crore against the reserve price of Rs 3.62 crore. Another SCO in Sector 70 went for Rs 2.40 crore against the reserve price of Rs 2.28 crore.
Shalinder Anand, a property dealer, said that the poor response was because of the reserve prices which were higher than the prevailing market rates. Besides, the market had been “weak’’ for some time.
Since GMADA was not a profit-making body, it should keep the prices lower than the market price in public interest, he said.
GMADA’s Chief Administrator A K Sinha, however, said that the auction could be termed successful, keeping in mind the pulse of the market. He said 12 sites were sold for over Rs 4 crore premium above the reserve price. But he admitted that a better response was expected for the sites falling in residential areas.
Asked about complaints of high reserve prices, Sinha said that these were based on a formula and officials could not go against it. “But we will try to look into the matter and do the needful according to the policy in the next auction,” he said.
GMADA is planning another auction in the next one and a half months when it is likely to offer a similar number of sites. Sinha said that details would be put on the official website soon.