Rlys eyes ₹6k-cr revenue by leasing out 2 prime plots for 99 yrs

The railways expects to earn more than ₹993 crore and ₹5,000 crore towards lease charges for 99 years for the 2.67-acre Mahalaxmi plot and the 10.6-acre Bandra plot, respectively. Developers who lease the plots for luxury residential/ commercial projects would also have to share a part of their profits as per lease conditions

Mumbai: Indian Railways (IR) has decided to put two underutilised plots at prime locations in Mahalaxmi and Bandra on the block in a bid to raise revenues. The Rail Land Development Authority (RLDA), whose mandate covers commercial exploitation of IR’s vast assets in land, called for bids from parties interested in leasing the Mahalaxmi plot in August, while the request for proposals for the Bandra plot is likely to be floated later this week, sources in IR told Hindustan Times.

The railways wants to cash in on the realty boom by leasing out its 2.67-acre plot in Mahalaxmi, facing Dr E Moses Road, for 99 years (Hindustan Times)

The railways expects to earn more than ₹993 crore and ₹5,000 crore towards lease charges for 99 years for the 2.67-acre Mahalaxmi plot and the 10.6-acre Bandra plot, respectively. Developers who lease the plots for luxury residential/ commercial projects would also have to share a part of their profits as per lease conditions, the sources said.

Hub of luxury projects

Mahalaxmi was home to numerous textile mills and low-cost housing colonies for workers till the 1980s, when the textile industry started using powerlooms and shifted base to Bhiwandi, Malegaon and other small towns.

Numerous high-rise buildings with premium residential and commercial spaces came up on erstwhile mill lands in subsequent decades, making Mahalaxmi a luxury real estate hotspot. The railways wants to cash in on this boom by leasing out its 2.67-acre plot, largely facing Dr E Moses Road, for 99 years.

The plot, secured by a boundary wall on all sides, is among a handful of vacant land parcels in the otherwise developed area. It has some old office buildings, godowns and a weigh bridge – all in dilapidated condition, apart from 20-25 trees of varying age and girth, including some Banyan trees. It is barely 400 metres away from Mahalaxmi railway station, and adjacent to the Science Museum, the Mahalaxmi metro rail station and the Sant Gadge Maharaj monorail station. The area is will-connected with major business districts like Nariman Point, Lower Parel and Bandra-Kurla Complex, said transport experts.

On August 8, the RLDA floated a tender calling for bids from parties interested in leasing the plot, with ₹993.30 crore as the base price and October 14 as the last date for submission of bids. As per the tender document, the plot has a floor space index (FSI, or ratio of built-up floor area to plot area) of 4.05, and the successful bidder will have to share at least 35% of its revenue with RLDA.

But sources said the revenue sharing arrangement and other terms and conditions will be finalised during a pre-bid meeting on September 9.

“The pre-bid meeting to discuss the potential of the land parcel will be held at a well known 5-star hotel in south Mumbai. We expect this land to be lucrative for developers, especially since luxury housing is becoming increasingly popular in Mumbai,” said a railway official, requesting anonymity.

The developer who bags the contract could also secure higher FSI under the National Transit Oriented Development (TOD) Policy, which encourages compact, mixed-use development around public transit stations by promoting high-density construction, said sources.

“If the developer is able to secure higher FSI, proportionate revenue will have to be shared with the railways,” said the official quoted earlier. “High FSI will allow the developer to construct 50-storey buildings, similar to luxury office and residential buildings in the area.”

Meanwhile, the RLDA is likely to float a tender calling for bids for its 10.6-acre plot in Bandra East later this week. The plot, adjacent to Bandra railway station, has been subject to encroachment over the years.