The main protagonist in the Dharavi case is Rance Hollen of Warwick Capital, London, part of a consortium of real estate developers. Hollen advanced through several rounds of selections and needs to take a final call on the bidder's premium — the money the consortium would pay the Maharashtra government on the basis of per square foot of new construction sold in the open market. But first, he needs to take a more basic call. At a time when global credit markets are in a flux and real estate prices are falling, should his fund participate at all or just walk away, like several others already have?
The case's calculations show a potential rate of return as high as 40 percent, but there are significant hurdles to clea r, too.

Bid 10% then the « bidder’s premium »
The DRP has been much awaited. Considering Dharavi’s proximity to the Bandra-Kurla Complex, the suburban business district commands very high real estate value.
What excites realty players, apart from the slum development altruism, is that the enormous land surpluses, left after the rehabitalation, could yield coveted commercial space.

Walk away from the contest
“It’s turning out too crowded a race to our liking,” according to PNC Menon, chairman, Sobha Developers, asked why Sobha Group shied from forming a consortium like other major realty players. “And when there are too many players in a complex bid, the risks of cutthroat competition and undercuting costs are more,” Oman-based Menon told FE.
“This (the cancellation) has increased the risk quotient in the project because bidders are also losing confidence because we are not aware of what’s happening behind the scene,” said an executive with a Mumbai developer that has tied up with a foreign firm for the project. “Also, it is a long-term project and many are questioning its validity.”

Bid the