New rules spur redevelopment projects for cessed buildings

Developers like Neptune and Rustomjee plan more redevelopment projects in Mumbai

The Maharashtra government’s efforts to give a boost to redevelopment in Mumbai by increasing the floor space index (FSI) up to 4, has started showing results. While developers like Rustomjee and Neptune plan more redevelopment projects, developers like the Marathon Group do not deny the possibility of venturing into one.
 
Ashok Chavan, chief minister, Maharashtra, had announced an increase in the FSI for redevelopment projects in February 2009. Cessed buildings, which are those built before 1960, will be allowed an FSI of 4 under cluster development of more than one acre plots.
 
“We are already into some of the largest redevelopment projects in Mumbai. We are also working on two more redevelopment projects in the city, but it is in the initial stages,” said Boman Irani, chairman and managing director, Rustomjee Group. Mr Irani refused to divulge any further details on the new projects.
 
Similarly, Neptune Group, a Mumbai-based developer, also plans redevelopment projects. Neptune has earlier worked on redevelopment projects for plot areas like that of factories and industries. Given the increased FSI for cluster development of cessed buildings, the group is keen on this arena. “We will plan redevelopment projects in Mumbai after six months,” said Nayan Bheda, chairman and managing director, Neptune Group.
 
Developers like the Marathon Group too are open to this new option. “Marathon Group is open to look at the possibility of such constructions but there are no immediate plans. However, our core business will remain redevelopment of open plots of land, be it industrial or textile mills closing down or shifting out of Mumbai,” said Chetan Shah, vice chairman, Marathon Realty Pvt. Ltd.
 
Most developers are looking at the FSI increase as a welcome change. Mr Shah further explains how the FSI increase will in turn help redevelopment and benefit developers. “The scheme for reconstruction of dilapidated buildings provides for existing area being reconstructed and to cover the cost of such construction, an incentive construction area for sale in the form of 50% of such reconstruction area is given to the owner/developer/society. The total area thus becomes very high for smaller plots of land and when this total construction area is divided by the available land area it becomes higher than the maximum FSI (earlier 2.5 or 3) permitted on the plot. In such a scenario, these plots become undevelopable, which is the case with most of the buildings in the city’s congested areas where already four-storied buildings without much open land area exist. So, increase of FSI to 4 is a welcome change for such buildings. Such high density will invariably result in newer developments being vertical and high-rise buildings.”
 
“What is good for the people is good for the industry. This additional FSI will only make for the development of infrastructure and that will benefit the residents of the city and will open up a lot more green spaces. By this the developers will get a better opportunity to do a better job and eventually keep a healthy profit line,” added Mr Irani.
 
Old areas like, Bhendi Bazar, Masjid, Kalbadevi and Bhuleshwar in Mumbai where dense development already exists are most likely to benefit by these projects. Given that the availability of open space in the main city of Mumbai is scarce, redevelopment projects would provide developers with more opportunities.
–Amritha Pillay ([email protected])
 

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COMMENTS

Sunita Rao

6 years ago

I would like to know what size flat would I be eligible to get in a building which is of area 16650 sq feet and there are 4 floors including ground floor each of 3970 sq feet .

There are totally 12 flats of 850 sqft each and 8 flats of 550 sqft each.

I occupy one flat of 850 sq ft

BONIFACIO VAZ

8 years ago

We have been displaced by the person claiming to be the owner, but this is a property which is ancesteral.
This particular building is in Marol, Andheri East.
The so called 'owner' who is a adopted child to the legal heirs and he has not yet got the 'conveyance letter' from the mumbai municipality office in Andheri East.

REPLY

adv dilip

In Reply to BONIFACIO VAZ 7 years ago

it is a matter of succession and adoption acts further personel law will also apply. to help u out i m required to know the facts and documents .... u can contact on 9987741375 after 6 pm

Tushar Dhanwani

8 years ago

It is a Query : - My Building is in Sion-KoliWada, GTB Nagar, and its a cess building and come in "C" Category and developed in the year 1952-53, can you please tell me currently how much FSI has increased on "C" Category Buildings as earlier its on 1.33 and Possible FSI is 2 can you please Update Me What is Current FSI and whats Additional FSI on it.

REPLY

dilip

In Reply to Tushar Dhanwani 7 years ago

one more information is required from u that how much the plot area is dealing with fsi includes various facts and dcr points and even location boundry etc it is not simple to explain in few lines u can contact on my no.9987741375

Dr Rajiv

8 years ago

its a quiery: The builder redevopt the building in 2002 and had not develop small area on top floor. The remaing area FSI is 20 sq mtrs. He had formed society and handed over poccession and society was registred and Co-Op society formed. The society agreed and signed documents in 2004 permitting 2 more years to built his fsi area but builder has failed and time period expired. Now he wants to develop the same. So far he has not convienced the property as per his commitement in writing and he is fighting with commitee members. My question is as per law is he still the owner of 20 Sq mtrs FSI after expire of agreement time?. Kindly reply, Anxious and shall be alwys thankful for your kind couretsy. Rajiv.

pushpa borkar

8 years ago

Respected Sir,
I am staying at andheri west .I want to know about if all member are not voting for R.D or not sig.letter of concern than also MGM can take dici of R.D .please certify my query .

with Regards

Jean

9 years ago

my current area is 250 sft carpet with total plot area 607 sq mtrs. under the new scheme from the government, will i be entitled to 300 sft carpet in the redeveloped building. the builder has agreed to give me 250 sft on the ground floor. with the new scheme is he liable to give me 300 sft carpet on ground floor

REPLY

dilip

In Reply to Jean 7 years ago

it depends on nego... and u can get the 300 carpet area...

Recovery, credit quality stabilisation to be gradual
Ratings agency CRISIL has said that credit quality of Indian companies is beginning to stabilise after being in virtual free fall for FY09 as companies are having easier access to funds following the Union government's fiscal and monetary easing and positive stock market conditions coupled with lower commodity prices which have led to lower working capital requirements.

 In a study, the ratings agency, however, cautioned that the recovery in credit quality will at best be gradual and may not necessarily be smooth.

 “There are signs that both the monetary and fiscal easing and the lower commodity prices are temporary. Additionally, unlike in the late 1990s, we see no prospect of a sudden and sustained upturn in economic conditions to lift corporate performance. We can therefore rule out a sudden jump in modified credit ratio (MCR) of the kind we saw in 1999-2000, when MCR rose to 0.92 from 0.61,” said Raman Uberoi, senior director, CRISIL.

 In India, fiscal and monetary authorities have begun to explore an exit from the present supportive stance and the timing and extent of these measures is likely to have a significant bearing on the pace and extent of economic recovery after the current phase of stabilisation, the ratings agency said. 

In a research note, Standard Chartered Bank said although signs of recovery are apparent, most importantly in the industrial sector, the disappointing monsoon could impact private consumption expenditure which is a major contributor to overall gross domestic product (GDP) and remains weak. 

 Echoing the same, credit information company Dun & Bradstreet (D&B) said that a confluence of factors such as sustained improvement in index of industrial production (IIP), increase in direct tax collections and improving business sentiment indicate that the process of economic recovery has set in. Despite these developments, the pace of economic recovery is expected to be slow due to the emergence of certain downside risks such as a potentially lower agriculture growth and surging primary food articles inflation, D&B said. 

 CRISIL, the unit of Standard & Poor's further added, the return of stability to the global economy has also meant that commodity prices in India have retraced 25% to 35% of their decline from the peak levels of mid-2008.

 “Access to funds has eased considerably, but there is significant uncertainty with respect to exchange rates and consumer demand. Large exchange rate movements can hit export-dependent sectors hard, and domestic demand can be affected by rising prices in general and food prices in particular," said Ajay Dwivedi, director, CRISIL Ratings.  

"We also note that the Reserve Bank of India’s window for restructuring of bank assets helped many companies avoid distress over the last 12 months. Looking ahead, we see a long and bumpy road for recovery in corporate credit quality,” Dwivedi added.

 Kaushal Sampat, chief operating officer, Dun & Bradstreet India said, “A sustained growth in industrial production will primarily be driven by the consistently improving business sentiment and recuperating demand conditions. Given the emergence of certain downside risks to growth and the limited scope for further fiscal stimulus, the timing of 'exit' strategies in terms of accommodative monetary policy becomes even more critical." 

D&B said it expects that while RBI might consider increasing the cash reserve ratio (CRR) for draining of excess liquidity from the system anytime till the end of the current fiscal, it may maintain a status quo in terms of other policy interest rates. However, these changes to CRR are unlikely to happen in the policy review of October 2009.                              

-Yogesh Sapkale [email protected]

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‘Wake Up Sid’ proves lucky for PVR
 
UTV’s latest movie Main Aur Mrs Khanna could only pull 50% of the crowd to the theaters but its previous movie Wake Up Sid, a Ranbir Kapoor starter, which was released in theatres on 2nd October is still able to pull in 85% occupancy.

PVR’s first weekend collection for the movie was about Rs2 crore across India and in the Diwali weekend the numbers crossed Rs25 lakh.
 
“On Diwali weekend, especially on Friday and Sunday, we reported 80%-90% occupancy level across India and this movie is holding good in our theaters,” said Prakhar Joshi, head programming, PVR cinemas.
 
The movie produced with a budget of Rs15 crore by Dharma Productions and distributed worldwide by UTV Motion Pictures, was able to garner Rs2.2 crore over the first weekend. The movie also collected about $165,934 in the UK while for the US the collections were $355,532. In the Gulf region the film’s per print average was $9,575.
 
 
 
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