Ravi Karandeekar's Pune Real Estate Redevelopment Market News Blog

Mumbai builders make a beeline for slum projects

2010-01-23T19:40:00.002+05:30

“The reasons are simple. Entry capital is cheaper, cost of clear land is way too steep in Mumbai, and returns are better in such projects,” said Ramesh Jogani, managing director and chief executive (CEO) of Indiareit Fund Advisors Pvt. Ltd, a private equity fund promoted by Piramal Group. Indiareit is close to investing Rs20-30 crore in two slum redevelopment projects in the city.

The Maharashtra government has paced up clearances and slum projects stuck during the economic crisis are being revived. Around 450 slum projects are going on in Mumbai, involving 250,000 homes. The Union and state governments are aiming for a slum-free Mumbai by 2015.

“There is a clutch of new developers who are sending in proposals for slum projects, particularly after the floor space index (FSI) was raised to 3, from 2.5 in such ventures last year,” said S.S. Zhende, CEO of the Slum Rehabilitation Authority (SRA). With higher FSIs, firms get additional construction rights for development.

Zhende also credits the high-power committee formed last year to settle disputes between slum developers and authorities for making the projects more attractive to developers.

To read more, please, visit livemint.com

Ready Reckoner 2010 may hinder redevelopment projects

2010-01-03T12:00:00.001+05:30

The state government increased the market value of real estate by 10-20 per cent in its Ready Reckoner 2010.

This is likely to have its rippling effect on redevelopment of old, dilapidated buildings in Mumbai and surrounding Tier II cities, too.

With the upward revision of rates, properties being developed on textile mill land would also see a sharp rise as the ready reckoner raised their value on an average by 13 per cent.

“The increased rates in the ready reckoner will be applicable for land, residential and commercial properties and various premiums charged on additional floor space index (FSI), staircase, etc. This will adversely affect redevelopment of old buildings, chawls and rented houses. There are over 19,000 old and dilapidated buildings in Mumbai alone, in addition to the fresh properties being developed. Same is the story for other Tier II cities,” said a Credai official, requesting not to be quoted.

To read more, please, visit Maharashtra realty to cost more with new ready reckoner

High TDR rates make redevelopment unviable in Pune Real Estate Market

2009-10-30T12:20:00.002+05:30

Residents of housing societies who hope to get a new house for old without spending money or without moving from the locality they live in are a disappointed lot as redevelopment of properties using transfer of development rights (TDR) route has stagnated.

Many buildings in the city have been redeveloped in the last decade or so, to exploit the changed floor space index (FSI) norms and TDR entitlements. A resident would get a newly built house of the same area and could also buy extra area at a price much below the market price in the locality. A developer would find the scheme attractive as he would be entitled to sell the entire additional FSI at the going market price.

Credai national vice-president and managing director of city-based Kumar Builders, Lalitkumar Jain, told TOI that TDR rates, currently hovering around Rs 2,700 or higher, make redevelopment projects unviable. "The present rules for adding TDR to the allowable FSI in Pune are so unsuitable that buying TDR and using it for redevelopment projects simply doesn't make sense," said Jain, who is doing many such projects in Mumbai.

Aditya Javdekar, director of Vilas Javdekar & Associates, said the TDR rates move in tandem with land rates. "For some months last year and till middle of this year, TDR rates were sober as realty had suffered a setback. Now they have risen as demand for homes is picking up," he said. Another problem in the redevelopment proposals is the unrealistic demands of the residents, he pointed out.

"The present FSI of .9 in the city's B and C zones can be loaded with TDR to take to 1.6 maximum. The going market prices, coupled with the pressures of residents' demands don't leave any scope for redevelopment," Javdekar added.

An important angle to the TDR tangle is that the process of granting it has stagnated due to some irregularities that came to light some time ago. "Getting a TDR sanctioned and obtaining a certificate can take up to two years now as the authorities have become too cautious," said Rohit Gera, Credai Pune vice-president. This has stagnated TDR supply and jacked up the prices, he added.

A developer said on condition of anonymity that the entire TDR sanctioning process is in the grip of politicians and civic officials who are hand in glove with them. "The decisions to acquire land for development projects are timed to suit the financial interests of these people and they see that too much TDR does not come into the market," he said.

The Times of India

Majority of Dharavi dwellers may be ineligible for rehousing

2009-10-30T12:06:00.001+05:30

Even as the Dharavi redevelopment project seems likely to be pushed with renewed vigor by the new state government, fresh revelations threaten to put a big question mark over the rehabilitation of over 3 lakh slum residents, with some officials warning of a potential law-and-order problem.

A preliminary assessment carried out by the competent authority—BMC assistant commissioner (G-North ward) Narayan Pai - to verify the status of slum dwellers has found only 37% of them eligible for rehousing in one of the five sectors of Dharavi. Pai has officially noted that out of 8,478 hutments (families) in Sector 4, only 3,127 are eligible.

The slum dwellers found ineligible in the survey are the ones who have been unable to produce proof of residence or documents that show they have been living in Dharavi prior to the government's latest cut-off date of January 1, 2000. Several thousand hutments have been sold since this cut-off date and the new occupants do not possess photo passes, which are given only to slum residents considered to be eligible for rehabilitation by the government.

The sticky situation forced the project's officer on special duty, Gautam Chaterjee, to write to the state government last week, warning that the Rs 15,000-crore scheme could not be implemented until all issues related to rehabilitation were sorted out. Chaterjee has termed this a "serious matter".

Dharavi has been carved into five sectors, each of which will be awarded to a private developer. The 2 sq km enclave has about 60,000 families or over 3 lakh people to be rehoused by developers as part of the project.

To read more, please, visit The Times of India

After Mumbai, Pune looks at cluster development

2009-10-22T02:43:00.004+05:30

Cluster redevelopment is redeveloping an area comprising several buildings rather than individual buildings

With development control rules already amended for Mumbai, it is Pune’s turn next

Densely populated areas of Pune could go in for a revamp, with cluster development proposed on the lines of such projects planned in Mumbai.

Inner areas of Pune that are thickly populated could be developed through the cluster approach where individual plots can be joined and the entire area redeveloped.

A senior officer from the Mantralaya said the cluster approach is more conducive for development as it will also help develop infrastructure in the locality. “The amendment for the development control rules is welcome as areas where old buildings are located can be developed as clusters instead of just redeveloped individual buildings,” he said.

In an earlier meeting, officers from the Mantralaya had said that while adopting a cluster model of development, public buildings such as municipal offices, public health clinics and police stations too would be rebuilt. It will also be mandatory for private players to provide amenities like parks and roads. In Mumbai, the redevelopment is through public-private partnership model and the floor space index has been raised to four.

In Mumbai, the state government had decided to constitute a committee of experts from the municipal corporations of Greater Mumbai and Mumbai Metropolitan Region Development Authority for identifying suitable clusters. A similar initiative is now expected in Pune.
Nisha Nambiar - Indian Express

Rs 5000cr redevelopment project up for grabs in Bandra - Mumbai

2009-08-25T19:03:00.001+05:30

Close on the heels of the Mantralaya redevelopment project, another massive redevelopment plan in the western suburbs is expected to be pushed through by the government soon. TOI has learnt through highly reliable Mantralaya sources that three builders have emerged as the frontrunners for the 100-acre project to redevelop the PWD-built quarters for state government staff in Bandra east, located around the suburban collector's office.

According to these sources, the leading contenders for this lucrative project-estimated by PWD chief engineer S B Tamsekar, as worth Rs 5,000 crore-are DB Realty, Kakade Infrastructure and Akruti.

The PWD colony currently has almost 5,000 flats in ground-plus-three storey buildings. It was built between 1958 and 1968.

According to the plan, the successful bidders will have to redevelop the residential buildings and construct shopping complexes, gardens, schools and recreational grounds.

The project also envisages construction of a super-speciality government hospital as well as an 8-lakh sq ft administrative building as large as the Mantralaya.

There would also be a community hall, a club house and shopping arcade.

Developers are expected to get over 20 acres to exploit and earn profits from. Situated along the Western Express Highway in close proximity to the commercial hub of BKC, it is a plot developers have for long been vying for.
To read more, please, visit The Times of India

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Today, July 30, 2009, you'll know Dharavi bidders

2009-07-30T06:20:00.006+05:30

Dharavi's makeover is finally inching closer to reality. Today at 6 pm, the Dharavi Development Authority (DDA) will unveil the names of the five consortiums that have quoted the highest price to win the rights to redevelop Asia's largest slum colony.

Located close to the financial and business district of Bandra-Kurla Complex where real estate is as high as Rs20,000 per sq ft, the objectives of the Dharavi Redevelopment Project (DRP) is not exactly altruistic.

In exchange for rehabilitating 60,000 shanties (divided into five zones of approximately 100 acres each) in 14 to 18-storey buildings spread across 542 acres with free homes of 300 sq ft and commercial units, the developers will have the right to develop almost 4.3 crore sq m to sell in the open market.

As per a survey by Mashal, a Pune-based agency, the average monthly salary of a Dharavi resident is estimated to be Rs13,000 to Rs15,000. There are over 4,500 industrial units, including tanneries, packaging units and chemical manufacturers which generate an estimated Rs2,000 crore in annual revenues.

Despite the government drawing up a master plan that protected the people's livelihood, locals are still unhappy.
To read more, please, visit - dnaindia.com

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Wadas of Pune ripe for redevelopment

2009-07-09T10:55:00.003+05:30

"Wadas’, the 16th century-style tenements in the heart of Pune, are in perilous state of disrepair and require urgent attention. But owners and tenants are not cooperating.

Repairs needed:

The Pune Municipal Corporation (PMC) records that of the nearly 18,000 properties located in Kasba Peth, Budhwar Peth, Shaniwar Peth, Nana Peth, Bhavani Peth and Narayan Peth, around 8,000 are very old and need immediate repairs.

According to builders and developers, hardly 20 per cent of these wadas are in a liveable condition.

These wadas were made out of clay, bricks and wood, which have deteriorated over the years, due to lack of maintenance. As the rents too are pretty low and cannot be raised due to the Rent Act, the owners too are not interested in maintenance.

The wadas should be redeveloped as a mix of residential and commercial complexes. As the people have been staying there for a long time, development of residential building would be a priority, but commercial space should also be allowed for viability.

Many are considered dangerous to live in but repairs have not always been possible because of technical and legal issues, including ownership issues of a majority of the wadas.

Even if a tenant wants to repair the wada, it is necessary for him to get a no-objection certificate from the owner, who would invariably refuse to give it.

Incentive FSI:

Mr Kishore Wani, Director of Amit Enterprises, notes that that redevelopment of the wadas had begun eight years ago — being built up as apartments with an FSI (floor space index) of 1.5 and for commercial space at an FSI of two. But commercial buildings could come up in the place of a wada only if the wada was on a 30 ft road, where an FSI of two was possible.

If there are a large number of tenants the limit of 1.5 FSI is not feasible for redevelopment, he saidThe State Government needs to bring in ‘incentive FSI’ in Pune as it did in Mumbai.

Incentive FSI is the component of FSI that can be used for free-sale. The incentive FSI admissible ranges from 50 to 75 per cent of the total area of amalgamated plots.

To read more, please, visit - The Hindu Business Line

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Maharashtra government issues a Government Resolution allowing 4 % Floor Space Index for municipal colonies

2008-12-13T09:46:00.001+05:30

Housing for 7,000 class IV PMC staff:

The resolution was passed two days ago and meets the long-pending demand of the Pune Municipal Corporation (PMC), which had been seeking additional FSI for municipal colonies so that all its staff members could avail of proper shelter.

At present, there are around 10 municipal colonies in Pune developed around 40 years ago and are occupied by around 1,500 staff members. The PMC wants to give houses to the remaining 6,500 members too.

It had invited tenders for redevelopment of these colonies, but the response from developers was very poor.

"The state government has asked us to send proposals as per the exact housing requirement. We will now do a detailed land assessment and forward the report to the state. Once it is cleared, we will be able to meet the housing demands of the municipal staff," said municipal commissioner Pravinsinh Pardeshi.

It may be noted that the PMC has recently initiated efforts to provide affordable and low-cost housing to the lower income groups in the city. Among its priorities is to provide housing to the conservancy staff and the class IV municipal staff.
The Times of India

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Multi-crore redevelopment projects on Mumbai's mill lands to halt as NTC has not honored commitment to workers’ housing

2008-08-17T18:20:00.000+05:30

Construction work on malls and luxury apartments worth thousands of crores of rupees on Mumbai's mill lands are scheduled to grind to a halt after a state government-appointed monitoring committee instructed the BMC to issue stop-work notices to the developers.

On Wednesday, Justice B V Chavan, a former high court judge and the chairperson of the committee, gave these orders after the mill workers’ union brought to the fore "contradictions" in National Textile Mill’s policies for rehabilitating mill tenants.

In 2005, the NTC sold five of its defunct mills — Elphinstone, Kohinoor, Apollo, Jupiter and Mumbai Textile Mills — for commercial development which led to a massive construction boom in the heart of the city.

On Wednesday, however, advocate Niranjan Lapasiya, representing the Girni Chawl Bhadekaru Sangharsha Samiti, pleaded before the government appointed committee that tenants of NTC mills were being evicted from their chawls despite assurances of rehabilitation.

He pointed out that the NTC had given an undertaking to the committee that it would abide by the government’s development control rules relating to rehabilitation of mill tenants but was still issuing eviction notices to them.

As per the state government’s development control rule number 58, residents of mill chawls are entitled to a 225 sq feet free house in event of redevelopment of mill. Subsequently, the government modified the rule making it mandatory for the developers to provide for rehabilitation before the sanctioning the development of mills.

This is a contradictory stance. In fact, in one of its affidavits to the city civil court in an eviction case, the NTC said that the development control rules are not applicable to it,'' Nimesh Mehta, Girni Chawl Bhadekaru Sangharsha Samiti's vice president said. In fact, tenants of Jam Mills and Tata Mills lost one their eviction cases in city civil court recently.

This is the second time in as many months that the committee has halted the construction at these mills. In June, a stop work notice was issued to developers following complaints that NTC had sealed the house of a certain Shobha Lotankar, tenant of Indian United Mill 3 chawl in Kalachowkie. The notice was lifted after Lotankar got back her house.

When contacted, Justice BV Chavan confirmed his order to the BMC. "NTC had promises to maintain status quo regarding eviction cases which they were not following so have instructed that work on that land must stop," he said
Redevelopment of Mumbai's mill lands

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Bombay Taximen Colony - one of the oldest housing societies in Kurla - hits redevelopment jackpot

2008-08-07T12:11:00.000+05:30

In the largest real estate deal in the redevelopment space, Mumbai-based Narang Developers is believed to have struck a deal with Bombay Taximen Colony — one of the oldest housing societies in Kurla, for around Rs 1,100 crore.

Bombay Taximen Colony, which comprises around 600 residential flats and 30 commercial establishments, had opted for redevelopment early this year, sources said.

“The final deal is yet to be concluded. We are in advanced talks with Narang Developers,” Bombay Taximen Colony secretary AR Siddique said. Narang Developers refused to comment on the deal. As per the agreement, most of the society members will vacate their flats after accepting the deal offered by the developer.

According to sources, the Rs 900-crore deal which Pune-based Kumar Developers (Kumar Builders..?)signed with residents of Khira Nagar in Santacruz (W) for redeveloping 640 flats in 16 buildings, was seen as the largest in the redevelopment space. However, the deal got stuck due to title disputes.

Business Opportunity:

Redevelopment of old buildings in Mumbai is seen as a large business opportunity, with the government introducing new incentives, including higher FSI and tax incentives. Mumbai has an estimated 16,000 buildings that qualify for redevelopment.

Under the redevelopment scheme, old and dilapidated buildings are knocked down to construct taller residential buildings and create space for commercial activities, thereby boosting returns from the project.

Residents of many housing societies, mainly in the western suburbs, have been signing agreements with several builders since January 2007 to move out of their apartments in exchange for megabucks running into a couple of crores.

The Bharatiya Bhavan Co-operative Housing Society, tucked away in a corner of 17th Road, Khar (W), received a fabulous offer from a little-known developer from Navi Mumbai called APA, who upstaged many prominent builders when he offered Rs 180 crore for the 37 flats in six buildings. The deal, however, fell through.

Another big housing society near Bandra Talao, Nutan Nagar, created waves when a developer offered the society a whopping Rs 451 crore for the cluster of low-rise residential buildings. This deal, too, failed to go through.
Kurla society hits redevelopment jackpot-The Economic Times

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