Mumbai’s realty sector is expected to celebrate 2013 with a big bang. Maharashtra government proposes to redevelop 202 chawls of the erstwhile Bombay Development Directorate’s (BDD) situated on 91 acre in the south central Mumbai. This would translate into construction of 1.50 crore sq ft of floor space index (FSI) further translating into about 2 crore sq ft of saleable area.
Considering the construction cost of Rs 2,500 per sq ft and the prevailing saleable rate of Rs 30,000 to 40,000 per sq ft the redevelopment project entails total sale value of Rs 15,000 crore. The redevelopment of BDD chawls is being proposed after the government has recently launched redevelopment of sector 5 of Dharavi slums which is expected to have a turnover of Rs 5,000 crore. Moreover, the government’s move also coincides with the much debated redevelopment of 249 four-to-six storied buildings situated in Bhendi Bazar in south Mumbai.
The project is of the order of Rs 2,900 crore. The BDD chawl redevelopment is also being proposed at a time when nearly 4,500 sq mt of land in Bandra east situated adjacent to the western express highway would be thrown open for the commercial exploitation.
Maharashtra’s minister of state for housing Sachin Ahit told Business Standard: “The BDD chawl redevelopment will soon be forwarded to state cabinet for its approval. The government proposes to provide 4 FSI for the proposed redevelopment. The modalities are being currently worked out.” He said the government had already prepared a road map and there was no need to appoint consultants for its implementation.
However, a senior government official, who did not want to be identified, said the government may explore an option of appointing the state run Maharashtra Housing & Area Development Authority as the nodal agency for the project. “The project will be developed solely by MHADA or through a joint venture route with the participation of private sector. The government may consider a formula whereby one third each will be available for MHADA for affordable housing, one third for tenants and one third for the private developer,” the official informed.
According to the official, another option is to develop these chawls as clusters and allot tenants a self contained 300 sq ft flat which is double the size of their prevailing tenement.
Sunil Mantri, chairman and managing director, Mantri Realty Developers asserted that the redevelopment of BDD chawls would be a game changer for the city’s realty sector. “This will give tremendous opportunities for developers to join hands with MHADA and undertake development of large area. Of the 2crore sq ft saleable area as per the one third formula nearly 70 lakh sq ft will be available for free sale to the private developers.” However, Mantri suggested that the government would need to implement the project in a time bound manner.
Lalit Kumar Jain, national president of Confederation of Real Estate Developers’ Association opined the project is a step in the right direction. “This will lead to increase in supply of stock and bring in market stability and price correction. However, this will be possible if the government does not jack up land prices whereby sale prices will never come down,” he added.
