Maharashtra plans more FSI for green building projects

The Maharashtra government may grant additional FSI to realtors who adopt green building projects, Minister of State for Housing Sachin Ahir said here Friday.

Expressing concerns over the water scarcity faced by Mumbai, the minister said the policy of green building proposals would help resolve this problem.

"It is encouraging to see many new townships have adopted green building proposals...Extra FSI (floor space index) would be made available to developers going green," Ahir said.

He was speaking at The Real Estate Conclave, organised by the Confederation of Indian Industry (CII) Friday.

Ahir said the state government has raised the difficulties arising out of the Land Acquisition, Rehabilitation and Resettlement Bill, 2013 with the centre as both public and private sector organisations are affected by it.

He said the state government will shortly announce the much anticipated Cluster Development Policy pertaining to redevelopment of old buildings and complexes in Mumbai.

Ahir said the upcoming Real Estate Investment Trust (REIT) will be very beneficial to realtors for raising funds at reasonable costs and aid the growth of the construction industry.

Calling upon realtors to match supply with demand, the minister said the time was appropriate for the realty industry to voice its opinions to facilitate development.

Conference chairman Anuj Puri, also Chairman and Country Head, Jones Lang LaSalle said the construction industry has seen huge turbulence since the global financial crisis of 2009.

He expressed hope the new government in India will help bolster the industry's confidence.

He said the office sector in India was spread over 35 crore square feet in five metros, of which five crore square feet lies vacant, especially in suburban areas and peripheral cities.

"This has resulted in a dichotomy where on the one hand, rentals in CBDs (central business districts) are rising sharply while those in suburban and peripheral cities are not... The rentals have not yet touched the peak levels of 2008," Puri said.

In the residential space, while affordable housing is flourishing, big ticket projects are witnessing unsold inventories, especially in Mumbai and Delhi's National Capital Region.

"Similarly, in retail space, while good malls are doing well, bad malls are going empty and run the risk of not being leased at all as they are "custom built" and cannot be used for any other purpose than malls," Puri added.

Former CII Western Region Chairman R. Mukundan said there is huge interest evinced by foreign investors in the Indian realty sector which now accounts for 11 percent of the country's total foreign direct investment inflows.

The CII also released a research report "Rowing The New Wave: Game-Changing Rules For Indian Real Estate" which analyses forthcoming changes in the industry through various initiatives.

The report said about 34.30 million square feet of office space will be supplied in 2014, the absorption will be four percent higher than last year while six million square feet mall space will be available this year.