Auction of commercial plots in Islamabad falls short of expectations

ISLAMABAD: Response of investors to auction of commercial plots in the Islamabad fell short of expectations of management of the Capital Development Authority (CDA) yet it managed to fetch over Rs18.5 billion during first two days of three-day auction. The auction committee of CDA headed by member Finance, offered 45 commercial plots for sale but only 15 properties attracted investor during first two days.

On the first day, the CDA committee accepted highest bids to the tune of Rs4.75 billion for five commercial plots. The CDA sources said that the CDA management was expecting to earn between Rs40 billion to Rs50 billion from three-day auction. Towards end of the second day’s proceedings, the auction committee had something to smile as a commercial plot measuring 4888.88 square yards in Blue Areas fetched Rs7.8 billion.

The same plot was withdrawn from auction due to least interest shown by investors on the first day. On the second day, this plot received highest bid of Rs1.608 million per square yard against reserve price of Rs1.465 million per square yards.

A big size plot measuring 4444.44 square yards meant for petrol pump on Srinagar Highway in front of sector H-9, was auctioned for Rs3.35 billion. The auction of the plot started from Rs3.359 lac per square yard and was closed at Rs7.56 lac per square yard.

A few years back, the CDA management had decided to keep plots for petrol pumps on Srinagar Highway and Islamabad Expressway as its own properties and were to be rented out to petroleum companies as assets and permanent income generation source of authority. However, in deviation from previous policy, the CDA management has decided to offer plots for petrol pumps for auction. On the first day, a petrol pump plot measuring 1227.76 square yards was auctioned for Rs845 million.

Two commercial plots of size 1155.55 square yards also could not attract investors due to high reserve price of Rs1.2 million per square yard. The auction committee had to defer auction of different plots for agro and fruit and vegetable farms and class three shopping centers in different sectors due to investors’ least interest.