Mumbai Developers: Increased FSI to boost demand for ‘ready to move in apartments’

Mumbai: The city builders welcomed the move of increased Floor Space Index (FSI) for residential buildings stating that it would increase the demand for ready to move in apartments and create affordable housing. On Monday, the city builders said the move of increased FSI listed in the Mumbai Development Plan 2034 would help in rationizing the real estate price in the city.

“Today, selected pockets in the city have higher real estate prices. Due to this, many home buyers refuse to purchase flats in few areas. The move would change this perception and would lead to overal development in the real estate market,” said Nayan Shah, owner of Mayfair Housing. The builders also said the overal demand for ready to move in apartments.

“For the past five years, there has been a slump in the supply of new projects (ready to move in apartments). This would happen as the premium for the said flats would increase, which would create a demand for such apartments,” added Shah. Other builders also said the increased FSI would create affordable in the Mumbai Metropolitan Region (MMR) region. “The government has relooked into the need for increased FSI in the city by taking a wise decision. This will also boost the real estate market and create large amount of affordable housing,” said Dharmesh Jain, Chairman and Managing Director of Nirmal Lifestyle.

Few city builders also said it is a marginal incrase in the FSI which would not offer a huge change in the real estate market. “The FSI for the residential buildings has been increased from 2 to 2.5. This increased FSI depends on the width of the road. We will be able to know it’s advantage once we would receive the proposal on paper,” said Mayur Shah, MD, Marathon Group and President of Cofederation of Real Estate Developers Association of India (CREDAI). As far as FSI for commercial spaces are concerned, Shah said there is a good increse in the FSI. “The increase of FSI for commercial areas will help create more employment opportunities,” added Shah.

CITY DEVELOPERS REACT…

Niranjan Hiranandani, President NAREDCO: For years, Mumbai’s Development Plans focused on residential real estate development. This time around, the focus has been equally placed on commercial real estate, with twin focus – first, on decongesting existing CBD areas as also extending the ‘walk to work’ aspect to newer locations. The Mumbai Development Plan 2034 brings in a serious effort as ensuring the target of affordable homes get constructed within a reasonably short time, given the opening up of various categories of land on which such construction was earlier not allowed. The FSI hike for commercial real estate is expected to not just enhance GDP growth, but also encourage employment and economic development.

Shishir Baijal, Chairman & Managing Director, Knight Frank India: “Despite the long wait, the approval of the DP 2034 could be a silver lining amid the recent upheaval and slowdown triggered by regulatory reforms such as the Real Estate (Regulation and Development) Act. 2016 (RERA) and the Goods and Services Act (GST). The move would bring the much needed stability in the real estate market. Key measures such as significant increase in the FSI for residential development particularly in South Mumbai and the thrust on affordable housing through the opening up no development zones and salt pan land would boost the national vision of ‘Housing for All.”

Ramesh Nair, CEO and Country Head, JLL India commented, “The new DP creates a massive opportunity for affordable housing projects and ensures a fine balance between environment and development. The land earlier earmarked as salt pans have been opened up for housing, while no further construction is allowed in the Aarey Colony apart from the approved construction of metro car shed.” Nair further added, “The creation of open space of 120 hectares at Eastern Waterfront through PPP opens Mumbai’s trademark waterfront for development of recreation, retail and entertainment projects and will give rise to re-development of real estate along the corridor, much like what Canary Wharf re-development did for London’s office district.

The FSI in island city has now been raised above the FSI in the suburbs which will lead to a higher potential supply in the island city.”