MUMBAI: Supriya Sule, MP and daughter of Nationalist Congress Party chief Sharad Pawar, has increased her stake in a subsidiary owned by Panchshil Realty that has shot in limelight for its impending acquisition of iconic Express Towers in South Mumbai along with US private equity firm Blackstone Group.
Sule and her husband Sadanand Sule owned 4% each Panchshil Techpark until 2011. However, the company’s latest filing show that her stake has more than doubled to 9.09%, while it does not name Sadanand Sule as a shareholder at all. Email queries to both Panchshil Group and Supriya Sule remained unanswered until going to press.
Panchshil Tech Park is one of the special purpose vehicles of Panchil Realty and is being controlled through holding company Premsagar Infra Realty. The holding company’s stake in Panchshil Tech Park stood at 54.55%, while directors and relatives of directors from promoter Chordia family hold 36.37% stake as on March 2013.
Panchshil Realty and Blackstone Group are close to acquiring Express Towers at Mumbai’s central business district Nariman Point for around 900 crore.
In April 2011, Atul Chordia, chairman of Panchshil Techpark, had admitted that Sule and her husband held 4% each in the company.
On Wednesday, Chordia told ET that Sule does not hold stake in any other company of the group and has no connection with the company’s proposed buy of Express Tower in South Mumbai’s Nariman Point. stake in Panchshil had earlier been highlighted by opposition parties in 2011.
Pune-based Panchshil Realty, the flagship company of the Chordias, commenced its operations in 2002 and has so far delivered over 14.5 million sq ft of real estate.
MUMBAI: The Bombay High Court on Wednesday gave the go-ahead for consolidation of Bombay Dyeing’s two mills at Wadala and Lower Parel, for its redevelopment project. This comes a day after the HC’s interim order asking the textile major to surrender 66,651 sq m of land at the company’s Spring Mills land in Wadala to the BMC and Mhada towards open spaces and affordable housing.
A division bench of Justices Mohit Shah and M S Sanklecha said the company would also have to set aside an additional 10,000 square metres of land at Wadala till the court finally decides the issue of the quantum land that will go for housing mill workers and other public amenities.
The court referred to BMC commissioner Sitaram Kunte’s statement that the consolidation would mean more open space for Wadala which faces an acute shortage of green space. “An additional open space would help partly address this deficiency of open space in the ward,” said the judges. Kunte said while Lower Parel had 2.58 sq m of open space per person, in Wadala it was woefully low at 0.73 sq m of open space per person. Around 32,828 sq m of land would be surrendered to the BMC, which has to use it for open spaces.
The union’s plea against the amalgamation of the plots on the ground that the land at Lower Parel was worth more than the land at Wadala also failed to impress the court. The HC referred to the ready reckoner rates which valued property rates in Wadala higher than at Lower Parel.
On Tuesday, the HC in an interim order asked Bombay Dyeing to hand over 66,651 sq m of land at Spring Mills to the BMC and Mhada, which will be used for public housing, accommodation for mill workers, open spaces as well as other public amenities. This would allow Bombay Dyeing to go ahead with its redevelopment plans on the entire land at Lower Parel and its share of the plot at Wadala, which includes plans for a 38-storey residential-cum-commercial and retail tower, IT spaces and a hotel.
The court has scheduled for March 2014, the final hearing of the petition filed by the union to seek more land for public amenities and affordable houses.
MUMBAI: The iconic Cadbury House at Mahalaxmi has been sold to a diamond merchant for Rs 350-400 cr. But the deal is yet to be inked. Cushman & Wakefield, property advisors in the deal, and Cadbury declined to comment as “the sale process is still under way”.
Property experts believe the price is reasonable considering Washington House, a short distance away at Altamount Road, was sold for around Rs 342 crore.
The Indian subsidiary of Mondelez International, earlier Kraft Foods, had put its headquarters on the block. With an office area of over 36,000 sq feet, it has been the headquarters for over 50 years.
Property consultants estimate the total area at 45,000 sq feet, which includes three floors, besides 5,000 sq feet of basement area being used for parking and as a godown.
The consultants said Cadbury India had in the late 2000s almost finalized a nine-year lease with ABN Amro Bank at a rent of Rs 55 lakh pm.
The company had earlier said that it was identifying a new location for its headquarters, preferably in north Mumbai.
MUMBAI: A day before the Supreme Court was to take up the case of Worli’s Campa Cola society, attorney general Goolam Vahanvati had no instructions from the BMC or the state government and municipal commissioner Sitaram Kunte was non-committal. Chief minister Prithviraj Chavan said he sympathised with the illegal flat owners, but their rehabilitation on the same premises appeared difficult owing to legal complications.
“We have full sympathies with the illegal apartment owners. But their rehabilitation on the same premises or on the adjacent land seems difficult,” Chavan said on Monday. “Accommodating them on the adjoining land will be complicated since it is reserved for industrial purpose. Even if the reservation is changed, it comes under Coastal Regulation Zone rules and, as such, there is little scope for their rehabilitation.” He said his government and the BMC will wait for the orders of the apex court.
On November 12, the SC had suo motu stayed the razing of the unauthorised apartments till May 31, 2014.
During that hearing, Vahanvati had submitted that it was possible to rehabilitate the illegal flat owners on the same premises. He proposed that surplus and unutilised FSI is available at the site and it could be used for a new building in the compound. The court requested the AG to file a proposal by November 19.
On Monday, when contacted by TOI, Vahanvati said: “So far I have no instructions.”
Following the November 12 hearing, municipal officials considered various ways to find alternative accommodation for the illegal flat owners. Among the options considered was taking back from a builder the part of the Campa Cola plot meant for industrial use. Also weighed was the idea of getting additional FSI under the 1991 development control rules, which exclude lifts, common passages and staircases from FSI calculations. Both plans had problems though.
Kunte declined to comment on the assurances given by Vahanvati. But a high-ranking bureaucrat said it was “not possible to implement the proposal mooted by the AG. If we implement the suggestion, it will set a bad precedent and will be against the BMC Act”.
The bureaucrat said that the municipal corporation was the planning and regulatory authority for Greater Mumbai under the BMC Act. “Our job is to examine building proposals and take stringent action against erring builders. It is beyond our jurisdiction to draft a rehabilitation plan for illegal flat owners. Even in cases of dangerous buildings, we never provide accommodation to their occupants or draft rehabilitation plans for them.”
The senior official said that, notwithstanding the submissions made by Vahanvati before the SC, the legal position has been brought to the AG’s attention. “In the past too, we made our position clear. We are waiting for the Supreme Court’s orders. We will abide by them.”
A leasehold property defines the status of the land on which the property is built. Leasehold land on which construction takes place is ordinarily on long-term lease, which may be between 30 to 999 years. Specific to residential property on leasehold land, one may use the example of the MMRDA’s Wadala development plan, wherein the land is given on long-term lease to developers who can sell the units constructed on an outright basis.
The developer ordinarily pays a substantial value for the long-term lease to the lessor up front. A few examples of such lease hold properties are the collector’s land on which Nariman Point stands, Mumbai Port Trust lands in Masjid Bandar and Ballard Estate, and Navi Mumbai as well.
On completion of the project, the lease is transferred in the name of the society formed. The future of such properties after the lease term is uncertain to the extent of the amount that the state demands for renewal, which will need to be paid by the society.
Clarity on this is expected after the legal authorities reach a decision on the Nariman Point buildings, wherein renewal is imminent. A concrete formula is expected with respect to calculating the incremental value required to be paid by the societies for renewal.
How does it matter whether a property is leasehold or freehold? It should be remembered that in the case of a freehold property, the owner retains complete legal rights over the property indefinitely.
However, a person or entity is legally entitled to occupy or use a leasehold property only for a specified period, on the basis of rental consideration. Once this period expires, all legal rights pertaining to occupancy and use of the property return to the owner. Also in case of any transactions on this land by the lessee an NOC is required from the lessor.
If a property is built on leasehold land, selling it can become a major issue if the term on the leasehold land is due to expire. Any person seeking to purchase such a property would find it extremely challenging to obtain a home loan for this purpose. The remaining lease duration is fundamental for home loan approvals. Ordinarily lease durations of 99 years and beyond do not face many issues. Since it is not always possible to opt for a freehold property, it makes sense to understand the advantages and disadvantages of freehold versus leasehold properties.
u Relatively cheaper prices (subject to the lease duration offered), as the land cost to the developer may be less than that of buying land outright in a similar location. In other words, a good location at lower cost but for a shorter duration.
u Usually, this arrangement is part of larger, well-planned developments which provides certainty of sound locational attributes and planned infrastructure support.
u Developers are ordinarily bound by certain timeline commitments towards the lessor, ensuring the interests of owners. A good example is the plots at Bandra Kurla Complex and CIDCO leases.
u A plot with clear title (as the owners are ordinarily large government bodies with all required proofs), thorough due diligence is done and developer credentials are also intricately verified.
u Uncertainty after the lease tenure.
u Possible additional and substantial liabilities in the future on renewal of the lease.
u Possible devaluation of the property as the end of the lease term draws close.
u Possible transfer charges levied by the lessor on any transactions in the premises.
A developer is most concerned about costs incurred, so they may prefer to build on leasehold land as the land cost may be lower than that of freehold land, and not all of this cost benefit is passed on to the buyer. Land cost in premium locations is invariably the most significant cost, so any savings on this front are highly preferable.
Leasehold options, however, create a lot more inflexibility for the developer in terms of requiring to continuously revert to the lessor for permissions etc. and even in cases wherein they wish to utilise transfer of development rights (TDR) it is an obstacle.
In most residential developments, the developer will have completed all tasks and responsibilities associated with the plot long before renewal is due, and will have already exited the premises. Therefore, he is not concerned with whatever transpires after that. It is true that it is harder for developer to leverage the land for funds initially (in case of leases shorter than 99 years particularly), but the leasehold route may still be more preferable in case substantial cost savings are envisaged.
Given a choice in case of residential options particularly — and if the budget permits — it is definitely preferable to invest in a freehold alternative, given the better clarity on the future. It is also easier to leverage a freehold property to procure funds in case of future requirements.
The state government has had enough.
If farmers do not accept its ‘best possible offer’ for the Navi Mumbai airport, the government will reclaim land from the sea to build the airport. And it has already done the preliminary work.
The airport on sea land between Navi Mumbai and Mumbai will work out much cheaper: only Rs3,000 crore for reclamation work. Whereas the government will spend close to Rs10,000 crore on rehabilitation and development of land if it were to take land from farmers in Panvel.
“We offered the biggest and the best rehabilitation package to farmers. But they are adamant; they don’t want it.
They are placing unreasonable demands and continuing with their agitation,” chief minister Prithviraj Chavan said on Friday.
“We are seriously considering to develop the airport on sea land. The Mumbai airport is saturated. We need another one… We are in talks with a Dutch consultancy firm [Netherlands Airport Consultants (Naco)], which has the expertise to reclaim land from sea and develop airports.”
The firm has developed Hong Kong’s Chek Lap Kok airport, Bangkok aiport and Japan’s Osaka airport in the past.
The state government has identified 1,100 hectares of an island, known as a ‘Madh Island’.
“This island, ahead of MbPT and JNPT, is a couple of kilometres off the proposed airport site in Panvel,” a senior government official said.
“We have to reclaim some portions of the island. After that, the strengthening will be done by putting bolders and sand. Basically, it is the engineering work.
“If they (farmers) decide not to give their land for airport, we will respect their decision,” the official said. He said the reclamation will be completed within the next 2.5 years.
He said the government was ready to give 22.5% of the developed land and a floor space index of 2 to the project affected farmers. “It would have increased the value of their infertile land. The current cost of Rs16 lakh per acre of land would have gone up to Rs16 crore per acre once the area is developed,” he said. “Now, let them develop their land. If they do not realise the value of the airport and given package, what can we do? Farmers think the airport will not happen without their land. They are mistaken…”
Another official, privy to this development, told dna that they had recently made an ‘airport in sea’ presentation before the joint secretary of the environment ministry. “The ministry officials have promised to examine the proposal positively. Once we receive the Dutch firm report, we will submit the proposal to the ministry. We are confident that the ministry will approve it,” he said.
Naco, the Dutch firm, is currently studying the size of various creeks and sea water movement.
The official said the firm is renowned for safeguarding the environment. “… They are more environmental conscious than us. They told us that their laws are more stringent than Indian laws.
They have all the resources and expertise to reclaim land from the sea and develop an airport without disturbing the ecology,” he said.
“Even the chief minister is in favour of developing the airport in the sea. Chavan is a technocrat. He says people across the world are using innovative technologies… Why shouldn’t we?”
The airport at Madh Island will also help the 22-km Mumbai Trans Harbour Link (MTHL).
MUMBAI: A week after the Supreme Court stayed the demolition of illegal flats in Campa Cola compound in Worli, a high-level team of BMC officials will call on attorney general Goolam Vahanvati on Sunday to draft a viable rehabilitation plan for the aggrieved flat owners.
When the apex court suo motu took up the cause of illegal flat owners on humanitarian grounds, Vahanvati had assured the court that a plan for the rehabilitation of the illegal flat owners in the same complex would be drafted in consultation with the BMC. Vahanvati had proposed that if unutilized FSI as well as additional FSI arising out of the new development control rules was made available, then the rehabilitation would not be difficult.
“We will submit our views to Vahanvati on whether FSI is available or otherwise, and if it is possible to rehabilitate them on the same premises,” a senior bureaucrat said. “If the final plan is not worked out, we will seek more time from the apex court.”
On his part, municipal commissioner Sitaram Kunte had a meeting with Mangal Prabhat Lodha and Ashish Shelar of the BJP, Rahul Narvekar of the Shiv Sena, Amin Patel of the Congress and residents’ representative Ajay Mehta on a viable rehabilitation plan.
Lodha said in the past certain irregularities were regularized in a large number of cases. “In this case, too, BMC should regularize the illegal flats and may charge a nominal fine,” he said.
Shelar felt that the BMC homework had been grossly inadequate. “My information is that the society never utilized the entire FSI,” he said.
Shelar said that if the unutilized FSI is taken into consideration and if provisions of new development control rules are invoked, then the society will have adequate FSI required for the construction of new flats.
Shelar said rehabilitation was possible on the neighbouring plot as well.
“It will have to be legally examined. If the plot is made available to Campa Cola residents, then they will have to pay the cost of the plot. I am not sure, if they will accept such a proposal,” Shelar said.
Kunte remained non-committal after the interaction. They presented their views. We will examine all the proposals received from them as well as the Campa Cola society,” Kunte said.
NAVI MUMBAI: The City and Industrial Development Corporation (Cidco) will soon go ahead with its global tendering of request for qualification (RFQ) to appoint a strategic partner for developing the proposed international airport at Panvel.
This move comes after Prime Minister Manmohan Singh okayed the compensation package offered to the villagers and most of them accepted it.
The comprehensive RFQ document involves evaluating the pre-qualification criterion of bidders, followed by request for proposal (RFP) that includes the technical aspects of the airport and those qualifying being asked to make the commercial bid.
The appointment of a strategic partner would be for the four-phase development of the Rs 15,000 crore airport project, with an investment of around Rs 5,000 crore for the first phase. A major chunk,
Close to 50% of the amount will be required for razing down the Ulwe hill to create the runaway and develope the core aeronautical area.
Mohan Ninawe, Cidco PRO, said, “The RFQ document prepared by our principal consultant M/s Louis Berger is ready. It will be submitted to the chief secretary-led project monitoring and implantation committee. After it is finalised, the draft would be forwarded to Union civil aviation ministry for its approval. Then Cidco will go ahead with the tendering process.” Louis Berger has prepared the master plan, detailed project report (DPR) and financial and transaction advisory services, according to a Cidco brochure on the proposed airport.
The project involves 2,268 hectares – 1,160 for core aeronautical area and 1,108 for outside aeronautical area. The planning body has to acquire 671 hectares-292 in the core area for developing the airport and the remaining outside it.
The land acquisition issues don’t seem to be over yet with eight villages still opposed to the compensation package. The villagers, led by Mahendra Patil, sarpanch of Pargaon village panchayat, said facts have been misrepresented.
Patil held a meeting at Varchaoule village under Owale gram panchayat on Thursday to thrash out the final settlement issue. None of the political leaders and advisor to the previous samiti that was holding the talks were present.
Patil said, “We had never agreed to the compensation model without cash component. If land against land was the deal, then why did the project have to wait for so long?
They should be compensated as per the Cidco model because when land was acquired under the previous 12.5% scheme, there used to be a cash component.”
MUMBAI: The Brihanmumbai Municipal Corporation (BMC) is examining the option of taking back a part of the plot in the Campa Cola compound from a builder, who had acquired third-party rights without the civic body’s permission, for the FSI required to accommodate the occupants of the illegal flats. BMC commissioner Sitaram Kunte will present the option to chief minister Prithviraj Chavan on Friday.
A senior bureaucrat said on Thursday the plot belonged to the BMC but its permission was never sought for the transaction. “If the illegal flat owners have to be accommodated, then the lease (on this plot) will have to be cancelled and new flats constructed on that land,” the bureaucrat said.
It will not be an easy process to regain this land but the thinking in the top echelons of the civic body is that it will have to do so if it wants to find the FSI necessary, the officer said.
Further, even if the land, or a part of it, is given to the illegal residents, its land-use will have to be changed from industrial to residential for construction to be allowed. But officials think it is not an intractable problem and the government can do it easily.
Still, the big question is who will pay for the land. The current market rate in the area is Rs40,000-50,000 per sq ft. The state government may have to allot it at a much subsidized rate, but even then it could cost a hefty sum. Whether the residents will be able to afford it will have to be seen.
The proposal will have to be ratified by the improvements committee and the general body of the BMC. With most politicians professing their support for Campa Cola residents, this is not considered to be tough now.
The government is also eyeing the additional FSI under the 1991 development control rules, which exclude lifts, common passages and staircases from FSI calculations. But with the plot falling under the Coastal Regulation Zone II, this would require huge concessions from the government again.
The Supreme Court had on Wednesday asked attorney general Goolam Vahanvati to submit a proposal for the rehabilitation of the owners of the illegal flats. Vahanvati informed the court that all the flat owners could be rehabilitated in the premises of the same society, and the illegal flats could then be demolished.
“Vahanvati had made the submissions before the Supreme Court after consulting BMC engineers and bureaucrats,” the bureaucrat said. “Now, we’re drafting an action plan on the rehabilitation. The BMC commissioner had a brief meeting with advocate general D J Khambata on the rehabilitation plan.”