Advisory · Developer consortium · Kokapet
A bid ceiling three developers did not want to hear
- ₹11crBelow intended bid
- 4.1acresAcres secured
- 3Price scenarios modelled
- 6wkWeeks to mandate close
What the client needed
Three developers formed a consortium to bid for a 4.1-acre Neopolis parcel and engaged WENS six weeks before the auction to establish what they should pay.
The brief was explicitly not to justify a number they had already chosen. Two of the three partners had a figure in mind, and it was well above where our early work was landing.
What WENS did
We modelled the parcel from the exit backwards: achievable rates on completion, absorption against the full western corridor pipeline, and the cost of carrying the land through an approval timeline that Neopolis parcels had not yet demonstrated.
Three price scenarios were built — base, downside and a stress case assuming an eighteen-month approvals delay. The stress case is where the consortium’s preferred number failed.
We presented a ceiling with the reasoning attached and the sensitivities visible, so the partners could see exactly which assumption they would have to disbelieve in order to bid higher.
What resulted
The consortium bid at our ceiling, roughly eleven crore below where two of the three partners had wanted to open, and won the parcel.
The winning margin was narrow, which suggests the ceiling was set close to the market rather than conservatively.
Development is now under way under the consortium’s own delivery team, on a land basis that leaves the scheme viable in the downside case.
Their bid ceiling came in below what two of us wanted to pay. We held to it, we won the parcel anyway, and the eleven crore we did not spend is the reason the scheme works.
The scheme this produced
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