Realty industry hails govt's FSI move

The realty industry has hailed the Maharashtra government’s move to allot 33 per cent floor space index (FSI) in suburbs for a premium. Realty players say this would not only curb cartelisation of transfer of development rights (TDR), but help correct prices as well.

Sunil Mantri, former president, Maharashtra Chamber of Housing Industry, said, “It was a long-pending move. It comes at a time when the TDR market is highly volatile in Mumbai. Very few players control and decide the TDR price. About two years ago, TDR prices had increased to Rs 4,250 per sq ft, which made TDR unviable. The current prices of Rs 2,700-3,000 per sq ft are also discouraging many realty players.” He, however, said after the government’s decision, realty players are expected to pay a premium of Rs 1,200-2,000 per sq ft.

Mantri said the government’s move would help create more TDR stock in the middle segment, and this would reduce TDR prices. “In view of the fall in TDR prices, realty players would be able to pass on the benefit to consumers, and the prices are expected to fall by Rs 500-1,000 per sq ft,” he said.

Yomesh Rao, director, YMS Consultants Limited, said 33 per cent FSI was not above the FSI 2 cap in suburbs, “It is just replacing the TDR at Rs 2,900 per sq ft by FSI premium at Rs 600 to 1,200 per sq ft from Andheri and Dahisar. The annual premium collection of over Rs 2,000 crore can be used for the betterment of the city.” He added this would marginally affect the TDR cartel, since TDR was still a required commodity.

Ashutosh Limaye, head (research), Real Estate Intelligence Services, Jones Lang LaSalle India, said, “The dependence on TDR would be less. The allotment of 33 per cent FSI at a premium is very transparent and the rate would be decided according to the rate revised every year in January. It is transparent and a fixed rate, and not subject to the demand-supply situation.”

TDR rates would come down, and realty players, in the current conditions, are expected to pass down the benefits to consumers.”

Rajesh Raha, managing director, Raha Realtors, shared these thoughts. He said, “This would increase lot of development potential in suburbs. The TDR price would reduce, and we hope realty players pass down benefits to the actual users.”