Cinestar and Bharatiya Janata Party MP Vinod Khanna has bought a residential apartment at Malabar Hill, in the tony South Mumbai area, from Citibank for Rs 1.25 lakh a sq ft.

Khanna has paid Rs 31.25 crore for the 2,500 sq ft flat. The sale price was four times higher than the reserve price of Rs 32,000 per sq ft.

In a similar transaction nearly six months ago, a London-based NRI acquired a 3475 sq ft property in NCPA apartments at Nariman Point for Rs 97,842 per sq ft.

• Actor Vinod Khanna bought a 2,500 sq ft flat from Citibank for Rs 31.25 crore.
• 6 months ago, a London-based NRI bought a 3,475 sq ft flat in NCPA Apartments for Rs 34 crore.
• Some time ago, stock broker Rakesh Jhunjhunwala bought an apartment from American Express Bank for Rs 25 crore.

Real estate industry experts said the price at which a property was sold cannot be viewed as a benchmark in South Mumbai as the area has a limited supply of real estate. "Buyers are keen on South Mumbai properties due to the status attached to it. Properties in the area will always sell at a premium," said Sanjay Dutt, deputy managing director, Cushman & Wakefield.

Citibank put the flat on sale a fortnight ago and property consultancy CB Richard Ellis was given the mandate to sell it.

While Vinod Khanna could not be contacted for comments, a Citi spokesperson said: "As common with many other multinational organisations, we periodically review our surplus residential estate portfolio in relation to employee requirements as the preference is towards a flexible remuneration policy."

The deal also marks the trend of foreign banks such as American Express, Deutsche Bank and HSBC selling their residential properties in Mumbai. The most prominent among them was high profile stock broker Rakesh Jhunjhunwala buying an apartment from American Express Bank in Mumbai's Malabar Hill for about Rs 25 crore.

Amidst the ongoing property sale by banks, Cushman's Dutt believes that the banks were taking a right step as the property prices were not sustainable in South Mumbai where prices have doubled over the last two to three years.