NEW DELHI: Bungalows outside Lutyens Bungalow Zone are becoming hot property with a breed of new entrepreneurs on the hunt for a premium address in the Capital.
After a landmark Rs 170 crore-deal for a 2,000 square yard plot in south Delhi's Shanti Niketan area, a 70-year-old bungalow on Kasturba Gandhi Marg, barely 300 meters from Connaught Place, has been put on the block for a price of Rs 140-160 crore.
Five bidders have been shortlisted so far. Among them are promoters of two large real estate firms, the owner of a steel company, an infrastructure firm and a high net-worth individual. "The non-binding price bids have already been opened and we are in the final stages of concluding the transaction," Jaiwant Daulat Singh, director, Daulatsingh Consulting, who's advisor for the transaction told ET.
He declined to share more information on the bidders. The property is owned by the Singh family and the Sardar Ujjal Singh Trust , and has a total built-up area of around 18,000 sq ft and stands on a one-acre plot, which is a third of the size of a soccer field.
Late Ujjal Singh was a parliamentarian, member of the finance commission and also governor of Punjab and Tamil Nadu. He was also brother of the late Sobha Singh, novelist Khushwant Singh's father and a top builder when Lutyens' Delhi was being built.
The bungalow was acquired in 1957 by Sardar Mohan Singh, a member of the Punjab Legislative Council and a member of the Council of the Secretary of State for India in London in the 1930s. The current residents of the property, Gurbachan Singh and his wife, are also part owners.
The bungalow is bang at the corner of the KG Marg-Tolstoy Marg intersection, opposite Amba Deep building. It was originally constructed by its erstwhile owner, Badr-ul-Islam, Bar at law, Delhi in the early 1940s in the classical style, having a shaded porch and pillared porticos in the front, large rooms and high oldfashioned ceilings. A major section of the bungalow encircles an open courtyard. In addition, there are verandahs and terraces running through the entire length of the house and facing the lawns around it.
"Buyers are willing to pay a premium for properties outside the Lutyens Bungalow Zone, that have larger built up areas or development potential, because there are restrictions on development in the LBZ," said Santhosh Kumar, chief executive officer of operations at global property firm Jones Lang LaSalle , which is running the transaction along with Daulatsingh Consulting. The property on KG Marg is being sold through a private auction process.
"The valuation methodology for such properties is changing. They are now being valued on a per square feet basis, taking into account the total built up area of the property," said Singh. The Lutyens Bungalow Zone, which is home to ministers, top bureaucrats, embassies and a few rich industrialists and individuals originally covered 2,800 hectares and has recently been expanded to cover newer areas in Delhi like Barakhamba Road, Golf Links, Ferozshah Road and Sardar Patel Marg.
According to the LBZ Guidelines, 1988, new construction on plots in the LBZ must use the same size of land for construction purpose as the original bungalow and must have a height not exceeding the original height. Plot sizes in the LBZ area are typically of 1-4 acre, and only 5-15% of the land can be used for construction, the balance will remain green area.
The 3.85-acre property that industrialist Naveen Jindal bought in 2006 (5, Man Singh Road) has a construction area of around 5%. In contrast, on the property sold recently in Shanti Niketan, outside LBZ, one can use 40% of the land for construction. Some experts argue that a higher construction area to green area ratio should be allowed in the LBZ and the density of the area increased as real estate in the capital city becomes more and more scarce.
The 1961 Master Plan recognised this fact, even while it intended to preserve the special character of this area. The new plan allowed higher floor area ratio and a maximum of four floors, not exceeding 45 feet, to keep the structures below tree line.
"There was certain logic in allowing this moderate amount of development. But this was reversed by the freeze imposed in 1988," said architect, Ranjit Sabikhi.
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