More than 600 middle-class families, who could not even afford to repair their old buildings so far, are suddenly protagonists in Mumbai’s latest gold rush.
Residents of Khira Nagar, a prominent middle class complex in Santacruz on the arterial SV Road, have struck a deal with the Pune-based Kumar Developers to cash out and sell their flats to the developer at Rs 18,000 per square foot. This is three times the average market rate for residential property in the locality.
As a result, a flat owner with a 1,000 sq ft apartment will be richer overnight by Rs 1.8 crore.
It seems to be the mother of all redevelopment deals. And redevelopment here would mean converting old residential colonies into spanking commercial complexes.
With about 80 per cent of the 640 flat owners in Khira Nagar having expressed willingness to cash out, Kumar Developers will be shelling out around Rs 900 crore to take possession of their flats.
But that also means hundreds of new millionaires will be out in the market searching for new flats… and driving up prices further.
The alternative is to stay on and get a brand new flat with 36 per cent additional carpet area. In addition, those who stay back will get a fund for maintenance at Rs 1,503 per sq ft — or about Rs 15 lakh for a 1,000 sq ft flat.
“The buildings constructed in 1978 were old and dilapidated and we invited tenders for a redevelopment project,” Hiren Ambegaonkar, a committee member of the Khira Nagar Association said.
Most residents seem overwhelmed. In the initial round 15 builders — the who’s who in the construction business — put in their bids. In the final shortlist, the aspirants included Wadhva Developers with an offer of Rs 13,500 per sq ft, Kalpataru with Rs 15,300 per sq ft, and Mayfair Housing at Rs 12,000 per sq ft.
Khira Nagar is a federation of 16 buildings and housing societies spread over eight acres. Size of the flats varies from 300 sq ft to 1,600 sq ft. Those cashing out will be paid 10 per cent of the sum immediately, and the balance when they vacate the flat in 3-6 months after they sign up with the builder.
Chief Promoter of Kumar Developers Lalit Jain was reluctant to reveal details about his development plans, but conceded it would have to be a commercial realty project to make it viable. Local residents said the builder was also considering developing a mall.