In an indication that the real estate sector might be getting out of bad

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times, DLF on Tuesday clinched a deal for a 350-acre plot in Gurgaon at Rs 1,900 crore, much above the reserve price of Rs 1,700 crore.

The developer will have to pay the amount over seven years to the auctioneer, HSIIDC (Haryana State Industrial & Infrastructure Development Corporation). The deal was announced at an auction in Panchkula, near Chandigarh.

The other two bidders, Unitech and Bharti Realty (the real estate arm of Bharti Enterprises), were disqualified on technical grounds. Their quotations were much higher than DLF’s. Bharti had quoted Rs 2,500 crore and Unitech Rs 2,400 crore. They were disqualified as they did not have the mandatory 10- year experience in managing a golf course.

It is after almost 16 months that a land deal of this size has taken place. The last big- ticket land deal was the much- hyped Rs 5,006-crore bid won by BPTP for a 95- acre plot from the Noida Authority. However, the deal collapsed subsequently, as BPTP could not make the full payment and had to request the authority for permission to take up only a part of the plot.

“Confidence is back as the real estate market is improving,” the chairman of the real estate consultancy, Jones Lang LaSalle Meghraj, Anuj Puri, told Financial Chronicle. “Unlike in the past, developers are now more circumspect in acquiring land. There decisions are now based on the business potential, rather than on the objective of building a land bank for getting a higher valuation later,” he said.

DLF’s spokesperson, Sanjey Roy, said there would be no statement on the deal until an official communiqué from HSIIDC was received.

The 350-acre plot will be used for the development of recreation & leisure projects, besides commercial and residential buildings. It is also expected to have a golf course.

The land is located on Wazirabad village on the Gurgaon- Faridabad road and forms part of Sectors 42, 53 and 54 of Gurgaon.

“There is no doubt it is a prime location,” the executive director of Cushman & Wakefield, Manish Aggarwal, said.

The land has been sold in HSIIDC’s second attempt. Its first invitation for bids in January was taken up by only one bidder, DLF. It did not work because of legal problems. The second auction was announced on July 20.

For DLF, the country’s biggest real estate company by market capitalisation, the deal marks a return to normal business. In the past year, the company, caught in a cash crunch, has had to withdraw from its commitments in mega projects in Dankuni in West Bengal and Bidadi near Bangalore.

Its Dwarka convention centre project in Delhi too was a non-starter as the company could not pay Rs 901 crore for a 34.6-acre plot to the Delhi Development Authority.

The real estate market has seen other big land deals come unstuck as developers were squeezed for money. For instance, a Rs 3,328 crore land deal of Unitech with the Andhra Pradesh Industrial Develpoment Authority has not yet materialised, as the developer has not been able to pay the money.