FoxMandal Little is advising Kolkata’s Municipal Corporation on the auction of highly sought after land amidst a rapid appreciation of property prices in the city. The plots are to be leased out to hotel companies.

The two plots are on the Eastern Metropolitan Bypass – a 21km road that connects the airport with the city. Three new five-star hotels are being built along the road, and two, run by ITC and Hyatt Corporation, are already in operation. The Municipal Corporation is expected to use the funds from the sale to improve the city’s creaking infrastructure.

The first plot to be leased is 3.35 acres. The corporation is inviting bids from companies with at least three years’ experience in running hotels and a net worth of more than Rs250 million (US$6.2 million). The second plot is 10 acres, but the corporation is going to lease only half the land. The other half will be merged with an adjacent fairground.

The 10-acre plot is currently held by the Calcutta Stock Exchange (CSE) on a 33-year lease. However, the parties agreed to terminate the lease after the CSE was offered an attractive deal that includes two other five-acre plots – one of them in Rajarhat, an emerging satellite township on the eastern fringes of the city.

The Life Insurance Corporation of India set a new record last year by paying Rs552 million (US$13.7 million) an acre for a five-acre lot in Kolkata. More than 50 companies, including Emaar MGF Land, DLF-Hilton and Unitech, had also shown interest in the property, but pulled out when a reserve price of Rs2.7 billion (US$67 million) was announced.