After A Failed Attempt In June, Delhi’s Iconic Taj Mansingh Hotel To Be Reauctioned In July
After a failed attempt to auction Delhi's iconic Taj Manshing hotel in June, the New Delhi Municipal Council (NDMC) has announced the date for a re-auction. After years of litigations and interventions by the Supreme Court (SC), the civic body had earlier planned to conduct the auction on June 19. However, against the clause of minimum three bids, only one was received. Now, the date for re-auction has been set as July 18. The NDMC owns the 3.78 acre-land over which the property is built.
MakaanIQ tells you more on the story and all about this iconic property:
About Taj Mansingh Hotel
The iconic luxury property is situated on Mansingh Road in Lutyen’s Delhi near important landmarks like India Gate, Rashtrapati Bhawan and commercial district. The hotel, with a built-up area of around 2,45,884 square feet, has 292 rooms and luxury suites spanning from 357 sqft to 1,031 sqft, along with a host of lifestyle amenities. The Tata Group-owned Indian Hotels Company Limited (IHCL) manages the property under the brand Taj Hotels Palaces Resorts Safaris.
The hotel was inaugurated two years after Indian Hotels entered into a 33-year lease agreement with the NDMC in 1976. The lease expired in 2011 and NDMC decided for a public auction of the property. A series of litigations followed in the coming years as the company challenged the decision in the Delhi High Court and this led to several lease extensions. The SC finally gave its go-ahead for the auction in April 2017.
NDMC firm on its decision to auction
The NDMC has stood its ground and stated that IHCL should also participate in the auction like other players if it wants to secure the rights over the property. If IHCL loses, the NDMC will give a 6-month window to vacate the premises. Moreover, the NDMC has made it clear that the lease deed does not have any provision of 'first right of refusal' (RoFR) for IHCL in the public auction. However, IHCL had defended itself by saying that the agreement had various rights accruing to IHCL as a joint-venture partner, and not as a mere lessee. Even the Solicitor General and Attorney General, in 2014, supported the hotel company by pointing out its clean track record over the years which gave it the right to lease renewal.
The council had postponed the auction several times since the first tender was released in December 2017. It ultimately lapsed after prospective bidders raised objections to the terms and conditions. As per a notice issued by NDMC, most of the financial terms have been retained from the previous tender. A site review will be held between June 16 and 22 while the pre-bid meeting will be held on June 25. The last date for submission of bids is July 9. The e-auction will be facilitated by MSTC and SBI Capital Markets will be the transaction adviser.
Earlier, the bidders raised objections to some conditions such as:
- Restrictions on the winner from making structural changes to the property.
- Bidders must have a five-star hotel brand and at least 500 rooms across three properties.
- Two bidders must not have a cross-holding of 5 per cent and beyond between them. For instance, the ITC Hotels owns 14.98 per cent in EIH (Oberoi Hotels). The cut-off is now revised to 20 per cent and above.
Property market in Lutyen’s Delhi
Lutyen’s Delhi is a locality in the heart of the national capital and is named after the British architect Edwin Lutyens. While the Lutyen's Bungalow Zone (LBZ) has residences of top government officials, the area around is known for many privately-owned bungalows. These are among the highest priced residential properties in the country. Premium properties are located in areas like Prithvi Raj Road, Kasturba Gandhi Marg, Tilak Road, Bhagwandas Road, Dr APJ Abdul Kalam (formerly Aurangzeb) Road and Amrita Shergill Marg. The neighbourhood is close to sought-after high-end localities such as Golf Links, Jor Bagh and Sunder Nagar. Property prices in Lutyen’s Delhi is as high as Rs 40,000 per sqft.