Tongue-N-Cheek

The broking game

Sipping coffee at a restaurant overlooking the Arabian Sea, while conversing with a few friends from the industry, I suddenly felt a rush of adrenaline. At first I thought it might be the coffee. But I knew better. I had just heard of a prime seaside property in North Mumbai - that has been a centre of everyone's attention since its disinvestment, acquisition and further hush resale and now litigation - is up for sale yet again for Rs 900 crore.

Rs 900 crore! Now that's some money. But the real cracker came when a real estate broker friend told me that he had a buyer for the same. "Outrageous," I said to myself. One of the three - the seller, the broker or the buyer - had lost it. These kinds of buyouts seem unrealistic. Besides, when is one suppose to expect any return on investments?

Over time, I have come across many such talented brokers - some so talented that they fix a price on a property and even find a buyer for it while the seller is completely unaware that his or her property is up for sale.

On my recent visit to Goa, I met a local broker who insisted that the Radisson property is up for sale for Rs 700 crore. I nearly had a heart attack - no one in their right mind should pay more than Rs 350 crore for that property. Since the broke seemed so confident, I did some inquiries and found out that the owners were so upset about such queries from brokers that they put up advertisements in the local newspapers warning brokers of legal consequences for spreading such rumours.

But nothing can be funnier and downright ridiculous than the price that a Delhi-based company is asking for the re-sale of its property on a 70-acre plot in extreme South Goa (where land prices are estimated to be around Rs 50 crore). Rs 200 crore, and nothing more. Perhaps, the property has a hidden goldmine that the buyers might find during excavation.

These stories only get better. I was given to understand that a 23,000 square metres plot in North Mumbai - Kurla to be precise - is up for sale at a price of Rs 110 crore! I want to know the party who will be willing to develop a hotel project on the plot and pay the asking price.

Such stories make me wonder how any hotel project become feasible as far as costs are concerned when one has to pay such ludicrous prices, which in most cases are caused on account of the brokers playing the market rather than the actual owners. Perhaps this is why mixed-use development is becoming the order of the day.

Savio Rodrigues
ehc@vsnl.com