NEW DELHI/MUMBAI: Billionaire investorRakesh Jhunjhunwala on Monday bought half of a seafacing building, comprising six plush apartments, in Mumbai’s upmarket Malabar Hill area owned by Standard Chartered Bank, for Rs 176 crore, more than two persons who knew details of the open bidding, told ET asking not to be named.
Jhunjhunwala told ET that he did not want to confirm nor deny the development. A spokesman for Standard Chartered declined to comment. A spokesman for property consultant Jones Lang LaSalle, which was the transaction advisor, also declined to comment.
This is the fourth high-value transaction to take place in south Mumbai over the last few months.
In May this year, YES BankBSE -5.02 % CEO and managing director Rana Kapoor had bought a residential building on Altamount Road from Citibank and GlaxoSmithKline for Rs128 crore.
In June, glassware manufacturer Borosil bought a seafacing duplex for Rs 43 crore.
In September, a duplex in Darshan Apartments on Mount Pleasant Road was sold to the Bulchandani family for Rs 57 crore
The who’s who of the business world stays on Malabar Hill. The Ruias of Essar group, Shapoorji Pallonji Mistry, Adi Godrej, Pranav Mody and Venugopal Dhoot— all have homes here. The combined net worth of residents of Malabar Hill is around $30 billion.
Former residence of Mohammad Ali Jinnah and residents the Maharashtra governor and chief minister are also located in this area. Standard Chartered and a number of other companies such as Citibank, Hindustan UnileverBSE 0.83 %, GSK, Bank of America andHSBC have owned many apartments in prime south Mumbai localities that were given as incentives and perks to their mid to top-level executives in the 1950s and 1960s.
With that culture long gone, these companies and banks have resorted to monetising such properties.
In the last few years, Citibank has sold over a dozen apartments in Mumbai—five apartments in Colaba’s Harbour Heights building and one each in NCPA Apartments on Nariman Point, Meher Apartments on Altamount Road and Kanti Apartments on MountMary Road in Bandra. In 2011, Standard Chartered and HSBC sold a five-storey residential apartment block, Bishopsgate at Breach Candy to real estate developer Peninsula Land for Rs 272 crore.
HULBSE 0.83 % recently sold its apartment block in Worli, called Gulita, to Piramal Realty for Rs 452 crore and has now looking at selling 55 apartments in prime south Mumbai’s neighbourhoods of Nepean Sea Road, Altamount Road, Cuffe Parade, Malabar Hill and Colaba for over Rs 300 crore.
ET has earlier reported that while property appreciation in Sobo, as the area is fondly called, has dropped to 10 per cent from 30 per cent two years ago, rental yields have fallen by more than half.
“Inventory has increased in the last two years, but sales are not happening at the same pace,” said Ashok Narang, partner at real estate property firm L Lachhmandas & Co. Besides falling re-sales, rental yields too have come down from 3 per cent-5 per cent in 2008-11 to 1 per cent-2 per cent in 2011-13.
“As of now, the rental yields in south Mumbai are even below 3 per cent and it makes no sense for an investor to come in,” another broker said. With prices of properties not rising as fast as they did in the peak years, investors and speculators had gone out of the market.