HDIL sells 1.8 mn sq ft of TDR in Q1; to raise Rs 2,200 crore

HDIL, a Mumbai-based property developer, has sold 1.8 million sq ft of transferable development rights (TDRs) worth around Rs 270 crore in the first quarter of this financial year, a key company official said.

The company sold around 1 million sq ft of TDRs, linked to development of new residential projects, in Q4 of FY 2009. The TDRs sold in this quarter were at an average price of Rs 1,500 a sq ft, indicating a revival in the property market, the official said. TDR prices had fallen from Rs 4,000 a sq ft in March 2008 to Rs 900-950 a sq ft in December 2008, indicating slower property development activities in Mumbai market. Early this week, the company sold TDRs to a private developer in Mumbai for around Rs 2,010 a sq ft.

TDRs are the additional built-up area granted in lieu of area surrendered by an owner of land or space for any redevelopment or a public purpose project. A TDR owner may use the rights himself in other areas of a city or sell it.

Since Mumbai has limited land, TDRs can be used by developers in their projects. TDR prices have fallen by 75 per cent in the past year, due to low demand in the wake of fewer property developments and increase in the supply of these rights after the state government increased the permitted floor space index (FSI) under the slum development schemes.

The company is expected to generate 10 million sq ft of TDR from the Mumbai international airport project by March 2010 and a total of 50 million sq ft in the next four-five years, from rehabilitating 85,000 slum dwellers from 276 acres of land.