Will Floor Space Index of 5 lead to a commercial boom in Mumbai?
FSI is the ratio of the total area to the built-up area. A higher FSI means developers can build more on a given plot by adding floors.mumbai Updated: Apr 27, 2018 10:48 IST
Will the development plan 2034, passed on Wednesday, pave the way for the next commercial boom in Mumbai?
In a bid boost to the commercial activities and generate more jobs in Mumbai, the state government approved a high floor space index (FSI) of 5. The move, officials say, could “kick-start” the process to rationalise rental rates for commercial spaces. A uniform high FSI has been the industry’s demand for long.
FSI is the ratio of the total area to the built-up area. A higher FSI means developers can build more on a given plot by adding floors.
Currently, the base FSI in the island city is 1.33, which has now been increased to 5 for commercial and 3 for residential spaces. While the base FSI for commercial development in Mumbai suburbs has been increased to 5. The FSI for residential spaces remain unchanged at 2.5. The FSI for commercial structures has been linked to width of the road, which means wider the road, more the utilization of space.
Samantak Das, chief economist and national director research, Knight Frank, said there is a rise in demand for commercial space. According to their latest survey, last year, the Mumbai Metropolitan Region (MMR) saw gross transactions of around 8 million sqft. “The demand is rising, but not going up because of dearth of supply. People want to get commercial space, but they are not finding it in their desired locations. Higher FSI means a boost,” Das said.
Over the past decade, Mumbai has seen commercial establishments migrating to cities such as Bangalore, Hyderabad, Pune, Gurugram and Noida, primarily owing to higher rentals and lack of adequate infrastructure.
Nitin Kareer, principal secretary, urban development department, said the move to increase the FSI would bring down the rentals. “The rentals in Mumbai are very high, so the moment you increase the supply, economic theory says, the prices should come down. It (rental prices) is also dependent on other factors, but the civic body and the government felt it would be a kick-start and the rest could follow.”
“With more supply in the coming years, I feel there will be rationalisation of rentals. It is good for the industry,” Das said, adding that as Mumbai is the commercial capital a lot of non-information technology (IT) companies may be looking to come here, along with ead offices of companies, banking and financial services industry.
However, the ambitious plan for the vertical growth has to be in sync with development of infrastructure in the city, Das said. “The government has to have commensurate infrastructure support to make this viable. It has to have world-class infrastructure. Only increasing the FSI will not help, in fact it would create problems for employees and occupiers,” he said.
Kareer said the state and its agencies have chalked out a plan for development of transport infrastructure and building other ancillary infrastructure to support it. “Obviously, unless there is proper infrastructure nothing can happen…unless there is water supply, sewerage and unless there are wider roads to ferry people, nothing can happen. We have taken it into consideration,” he said, adding road and Metro networks have been planned for better connectivity.