Housing societies in Mumbai have always gone through builders to redevelop dilapidated buildings at no cost to the flat owners. For the first time, the shoe is now on the other foot.
Skyrocketing property prices are being leveraged by middleclass flat-owners to get bargain deals from builders desperately searching for land banks.
The cluster of Middle Income Group (MIG) housing societies in Bandra (E) — 864 apartments in 64 buildings — is just completing the first round of redevelopment contracts after fierce bidding. And the returns for residents are mind-boggling.
The smallest group — Model MIG societies covering 4,500 sq mt, four buildings and 96 flats — saw frantic bidding between the Kalpataru Group and Rustomji Developers, with Rustomji emerging victorious.
Residents will get 950 sq ft of carpet area for their 407 sq ft flats — a markup of 130 per cent. The society will also get a corpus of Rs 33
crore for maintenance.
Kalpataru has, however, bagged the redevelopment contract for
MIG Group II covering four buildings and 96 flats.
In redevelopment projects, developers are entitled to a floor
space index (FSI) of 2 to 2.4 instead of the normal 1 FSI to
cross-subsidise the cost of accommodating existing tenants/
owners. Since the original Model MIG societies utilised just
0.5 FSI, there is a sizeable FSI balance developers can utilise.
Earlier, MIG Group 1, covering 16 buildings on 20,000 sq mt of
land, awarded its development contract to a joint venture (JV)
between Bombay Dyeing and Larsen & Toubro (L&T) following
a fierce bidding contest with K Raheja Corp. Besides doubling
the flat area, the JV will pay Rs 90 crore as a maintenance corpus.
“We will develop 4,00,000 sq ft of low-maintenance, low-electricity
consumption buildings,” said a senior Bombay Dyeing real-estate executive.
The redevelopment deals include a tightly monitored completion
and delivery schedule and alternative housing for society members while construction is on.
With new projects in Bandra (E) opening bookings at Rs 12,000 per sq ft, there is a virtual stampede among builders to get a piece of the action.
“Bandra-Kurla Complex next door ensures that there are several foreigners and corporate executives looking for premium residences in the area,” said a bidder.
Nayan Shah, chief promoter of Mayfair Housing and bidder on one MIG blocks, said the bidding had opened the doors to unutilised FSI all over the suburbs.
Little wonder that MIG Group IV housing societies attracted 26 proposals in the initial technical round for development rights for 16
buildings in Gandhi Nagar covering 168 apartments.
The shortlist of 12 who will be considered when bids open on Saturday or Sunday reads like a who’s who of India’s builders —
Neelkanth, Mayfair, Dynamix-Balwas-IL&FS, Kalpataru, RNA, K Raheja Corp.