Economic TImes : Rajesh Unnikrishnan, Mayur Shetty & Boby Kurian
MUMBAI/BANGALORE


AFTER outbidding many leading players such as DLF in the recent bid for a five acre plot in Kolkata for Rs 276.2 crore, LIC is now on the verge of closing a land deal in the Chennai market.
LIC is believed to have won the bid for Hindustan Unilever’s three acre land in GST Road, Chennai for around Rs 65 crore, sources close to the development said. ”We have received permission from the investment committee to participate in the auction for HUL’s Chennai property. We do not know the exact details of the land auction now,” T S Vijayan, chairman, LIC said.
But people close to the development said that the LIC bid was well ahead of others, including one from Reliance Retail, estimated to be around Rs 50 crore. In the Kolkata transaction too, LIC’s bid price was well ahead of the reserve price of Rs 235 crore.
HUL officials were not available for comment. LIC has been becoming very aggressive in the property market in recent years as it seeks to improve yields on its liquid cash. The corporation has spent around Rs 400 crore this year on acquiring the properties in Delhi, Jaipur and Kolkata compared with Rs 100-crore a year till 2006-07.
Mr Vijayan agreed that that LIC was looking to develop the property for commercial use and generate rental income. Although rentals in most properties inherited by LIC have been frozen due to local legislation LIC has been able to generate very good income from new properties developed post-nationalisation such as the Jeevan Bharti property in Delhi.
The LIC chairman added that that the corporation has all along been buying property and developing them for residential purpose under its scheme for policyholders.
Recently, it has been actively looking at commercial property in central areas. Besides Chennai, the corporation has purchased properties in Jaipur, Jodhpur and Meerut. LIC’s land acquiring spree is likely to continue for the rest of the year as it is understood to be looking out for expressions of interest from state-owned bodies who are putting up their properties on auction. “We generally purchase properties in government auctions as there are no negotiations involved,” Mr Vijayan pointed out.
The Corporation’s has over 1,500 real estate assets in India. In addition, it owns freehold properties in Indian metros which are likely to be used for housing its offices and employees. HUL had put the property on auction as part of its recent moves to sell surplus real estate. The FMCG behemoth’s plans to sell the more valuable assets in Bangalore, and some in Mumbai, are still underway.
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