Latest Property News on 'Mumbai'

Maharashtra govt clears decks for 5,000 Mhada colonies’ redevelopment

MUMBAI: The state government has finally revised development norms and cleared the decks for the redevelopment of 5,000-odd societies in Mhada colonies.

Chief minister Prithviraj Chavan-led urban development department has issued a notification in this regard.

Raising stakes for redevelopment, the new norms offer bigger areas for tenants while linking the developers’ incentives and Mhada’s share in the redevelopment to the plot’s market value.

The floor space index (FSI) for redevelopment of such societies has been raised from 2.5 to 3, and to encourage societies to come together for planned development, the government has linked incentives for tenants to the size of the plot. While tenants in an individual society will get up to 35% additional area on redevelopment, the area incentive offered will increase by another 15%-45% if they participate in an integrated redevelopment scheme involving a bigger plot-size.

The state has offered 15% more area to tenants, if they participate in a scheme on a plot area ranging from 4,000 sqm to two hectares. This would go up to 25% for development on two-five hectares, 35% on five to 10 hectares, and 45% on 10 hectares, and above.

Of the 104 Mhada colonies in Mumbai, 56 are on larger plots. A senior state official said the idea was to encourage cluster redevelopment in such plots for better infrastructure and planning. An additional 10% area will be offered to tenants if they opt for a development or a joint venture agreement with Mhada.

But there is a catch. To rein in fraudulent practices used by builders, Chavan has imposed a cap of 861 sq ft as the maximum rehabilitation area that can be offered to tenants, excluding the balcony area.

The developer’s incentive and Mhada’s share in the surplus built-up area has been linked to market rates to make projects in lesser development pockets more viable. Accordingly, the incentive FSI offered to developers will range from 40%- 70% taking into account the ready reckoner (RR) and construction rates. The incentive component will be lower in the prime area.

The society’s share in the remaining surplus area after the rehabilitation and incentive components will range from 30%-45% depending on the RR and construction rates, while Mhada will retain the remaining built-up area.

The state said about 60% of the built-up area in such projects will be reserved for houses for the middle and low income groups.

http://timesofindia.indiatimes.com/city/mumbai/Maharashtra-govt-clears-decks-for-5000-Mhada-colonies-redevelopment/articleshow/19996787.cms

Maharashtra won’t legalize unauthorized buildings

PUNE: The state government has said that unauthorized constructions built after March 31, 2012 cannot be regularized.

Pimpri Chinchwad municipal commissioner Shrikar Pardeshi said that deputy chief minister Ajit Pawar had convened a meeting in Mumbai on Monday to discuss civic problems. During the meeting, principal secretary of urban development department Manukumar Shrivastava said that unauthorized constructions constructed after March 31, 2012 cannot be regularized as the laws have been amended recently by the state legislature.

“The civic body is conducting its demolition drive against unauthorized constructions. We have now found support from the state government for our drive,” Pardeshi said

There is a demand from the elected representatives and citizens for extending the duration of the Gunthewari Act, he said. Shrivastav had pointed out that the Act was only for a specific period and it cannot be issued again for regularizing unauthorized constructions. He said unauthorized constructions built on plots reserved in the development plan (DP) or on land affected by floodlines, green zones and no development zones before March 31, 2012 cannot be regularized.

Mayor Mohini Lande said, “The state government has declined to regularize the unauthorized constructions built after March 31, 2012. We pointed out that the civic body has stopped giving basic amenities to the people residing in areas affected by the buffer zone of Moshi garbage depot. We have demanded that the buffer zone limits be reduced as many houses have come up. We also demanded that the amenities be restored to these affected people. Pawar accepted our demands.”

http://timesofindia.indiatimes.com/city/pune/Maharashtra-wont-legalize-unauthorized-buildings/articleshow/19922180.cms

Chikhlikar’s crores include factory, Pune plots

The Anti-Corruption Bureau’s (ACB) continuing investigation against suspended PWD executive engineer Satish Chikhlikar involved trawling through 78 personal files of his on Monday. Around 27 files were documents of properties spread across Pune, Navi Mumbai, Aurangabad and Nanded.

The properties include flats, plots, a factory and an office worth crores. Most of the properties had been rented out, enabling Chikhlikar to have a steady flow of income, said sources. Officials also found his will.

Chikhlikar, who has been held for graft, has served the PWD for 18 years, during which time there has been no blemish on his record till now. When asked if any links to politicians had been found during investigations, Shashikant Mahavarkar, superintendent of police (ACB) told reporters on Monday that the ACB had found nothing in the seized documents to suggest any monetary transactions between the suspended engineer, his superiors and politicians. Investigating officer Shaligram Patil later said that no diary with names of politicians and officials had been found.

The Rs 14.28 crore in assets of Chikhlikar include a factory worth Rs 39 lakh in Aurangabad, a plot worth Rs 67 lakh in Kothrud, Pune, a plot worth Rs 53.1 lakh in Loni, Pune and an office in Vashi. Officials said he had purchased properties in the names of relatives and friends and inquiries were on to dig out details on these names. The ACB has also sought the salary statement of Chikhlikar, the executive engineer, Nashik circle, north division.

“The properties he owns were found in places where he has served as a PWD engineer. We have found their details on paper but will now visit these sites for verification. We will also check if he has more properties,” Mahavarkar said. He added, “Chikhlikar has many files of income-tax returns. So, if it is not black money, we are investigating how he could amass such huge assets.”

Of the 78 personal files the ACB officials recovered, 38 had I-T documents, two had vehicle papers and six had insurance documents. There was another file of fixed deposits, one each of house tax and water tax and his will. The remaining files had property papers.

Chikhlikar and section engineer Jagdish Wagh were arrested for allegedly accepting a Rs 22,000 bribe for road work on April 30. Wagh was caught taking the bribe and handing it over to Chikhlikar. The two suspended engineers are in police custody till May 10.

Their interrogations continued at the ACB office all day on Monday. Sources said the interrogations revolved around the money amassed by them.

Mahavarkar said his department rarely got complaints against the PWD, but this was one of the biggest cases pertaining to the department in a decade.

Chikhlikar’s seniors washed their hands of the affair. “Our office comes into the picture only if the works to be sanctioned are beyond the powers of the executive engineer, or in the event of inspections, visits etc. That is a routine job and it is done fairly,” said P Y Deshmukh, superintending engineer, Nashik circle.

Times View

Investigate alleged political nexus

The Anti-Corruption Bureau (ACB) could be on to something big after tens of crores in cash, ornaments and properties have tumbled out during raids on the various assets of suspended Public Works Department executive engineer Satish Chikhlikar. The agency should probe whether this official was a crucial link between road contractors and senior state politicians, as has been alleged. The PWD is flush with funds and the arrests of both Chikhlikar and Jagdish Wagh could be just the tip of the iceberg.

http://timesofindia.indiatimes.com/city/mumbai/Chikhlikars-crores-include-factory-Pune-plots/articleshow/19923376.cms

Now, pay for Mhada flat on possession

MUMBAI: There is some good news for prospective Maharashtra Housing and Area Development Authority (Mhada) flat buyers with the authority having relaxed payment rules.

Now, prospective lottery winners of the 1,259 flats to be auctioned by Mhada on May 31, do not have to pay total flat cost till the housing body gives the buyer possession of the flat.

Chief officer of Mhada’s Mumbai board Niranjan Sudhanshu said, “The decision was taken so as to not burden buyers with paying their EMIs before possession. We will ask for the total flat cost after issuing them allotment letters, upon getting an occupation certificate from the civic body.”

The decision came about following difficulties voiced by buyers about Mhada delaying flats’ possession by almost two years. They argued that Mhada would take the entire flat cost in two or three installments for under-construction flats, but would not give possession on the stipulated date.

“The delay in possession has put a strain on my finances. My husband and I started paying home loans a year back. It is only now that Mhada issued us an allotment letter. Imagine paying a monthly rent of Rs 20,000 and an EMI of Rs 30,000 simultaneously,” said an aggrieved buyer, who, even after winning a high income group flat in Powai in the 2011 lottery, has been staying on rent in Goregaon.

After nearly two years, Mhada recently handed over possession of about 390 flats of 4,034 flats to 2011 lottery winners.

From the 2011 lottery, MHADA received occupation certificates and began allotment for 180 low-income group houses and 18 houses for economically weaker sections, in Mankhurd. In the high-income group, it has also started allotment of 110 houses in Powai, 28 in Dahisar and 55 in Magathane, Borivli.

http://articles.timesofindia.indiatimes.com/2013-05-04/mumbai/39026213_1_mhada-maharashtra-housing-total-flat-cost

Not home buyers’ fault, says mayor

Mayor Sunil Prabhu, in a deviation from BMC’s stern stance towards illegal construction, has come out in support of “innocent” home buyers.

Prabhu said the ruling Shiv Sena-BJP alliance in BMC opposes the civic body move to charge illegal properties thrice the amount of valued property tax. The civic administration’s decision has been based on a recent state government amendment to Mumbai Municipal Corporation Act, 1888, and other local bodies in Maharashtra in 2010.

The civic body aims to implement the tax hike during October 2013-March 2014. The civic administration’s survey report on unauthorised structures in Mumbai will be put before Supreme Court on May 7.

Prabhu said the move would require approval from municipal councillors to come into effect in the city.

“We will be against the move when it comes for discussion in the corporation’s general body meeting. If a developer submits an intent of development (IOD), acquires a commencement certificate (CC) and a bank loan for the project, a buyer is led to believe the structure is genuine. In such a case, how come the buyer is responsible? It is not easy to move out of a house after it is found to be illegal,” said Prabhu.

He added that there is no opposition against the Campa Cola demolition, which has been mandated by the Supreme Court.

The mayor has advised the state to frame stricter rules for developers and architects who cheat buyers. “The government should form rules that will ensure strict action against them. The aim should be to penalise the wrong-doers and deter the growth of such constructions in the city,” said Prabhu.

http://www.indianexpress.com/news/not-home-buyers-fault-says-mayor/1109922/

Owners may soon be allowed to rent out flats in 1st 5 years

MUMBAI: The state housing agency is set to do away with its rule that restricts a Mhada flat allotee from renting out the flat for first five years.

The proposal has been approved in principle by the state. Mhada will be taking a formal decision at a meeting to be held soon. Mhada chief officer (Mumbai board) Niranjan Sudhanshu said, “If an allottee is transferred to another city, he/she may want to rent out the flat. With restrictions lifted, there will be no question of illegal renting .”

Officials said the move will help the state government increase revenue through stamp duty and registration fee.

But sources say the proposal was framed to overcome criticism faced by legislators in the 2011 CAG report which criticised the state for its largesse given to Rajyog, a housing society of legislators in Versova, who had rented out 70 of the 225 flats allotted and were themselves staying at MLA hostels.

http://articles.timesofindia.indiatimes.com/2013-05-04/mumbai/39026583_1_mla-hostels-mhada-housing-society

Realtors turn office space into homes

MUMBAI: A number of builders in Mumbai are converting their office projects into residential ones amid poor sales and falling rentals in the commercial space. In the backdrop of tight liquidity, builders are also finding it easier to work on housing projects, given the self-financing ability of residential projects through customer advances as against back-ended commercial developments.

Among major developers, Oberoi Realty is now contemplating to convert its office space project Oberoi Splendor Commercial on Jogeshwari-Vikhroli Link Road in Andheri , a suburb of Mumbai, into a residential project. Brokerages like Motilal Oswal and IDFC Securities have termed Oberoi Realty’s decision as a positive trigger, given the possibility of better sales volume. Other builders such as Godrej Properties and Kohinoor have considered and executed such decisions in the past few months as existing ready commercial real estate spaces continue to see vacancy levels growing.

“Most of the current office space deals are aimed at cost reduction and that does not necessarily mean demand growth. Therefore, it’s good to hedge your risk and go for more residential , which is relatively easy to sell than focusing on commercial space that may take long to get absorbed,” says Raja Seetharaman, managing director of property advisory firm Aperon Real Estate Services.

Slower economic growth has led to decline in expansion by companies due to prevailing cautious sentiments and the market saddled with higher inventory isn’t showing any bright recovery promise soon. Total net office space absorption across top eight Indian cities was down 37% from a year ago at 3.6 million sq ft in the first quarter of 2013, showed a recent report from property consultant Cushman & Wakefield. However, fresh supply continued to rise 18% to 7.9 million sq ft with 3% increase in vacancy rates to 19.6%.

Residential property market, however, is relatively well placed and experts see more developers trending towards it as customer advances is a much better option than going in for expensive loans or private equity partner induction. “In residential market, latent demand is getting converted at right price point. Cash flow situation is much better in this segment than commercial. Residential projects work on negative working capital and therefore it makes more sense for a developer to focus on this segment now,” says Ambar Maheshwari , managing director, corporate finance at Jones Lang LaSalle India.

In certain cases, developers of even ready and constructed commercial towers are reviewing such plans and are going ahead with them. Kohinoor Square, an under-construction project of Kohinoor Group with an entire 52-storey and 203-meter high ready commercial tower is also being converted into a mixed-use project with focus on residential. The company is planning to add hospitality component with serviced apartments too. According to property brokers, Kohinoor Square has not sold or leased out any space in this ready building yet. The additional hotel component will help the company fetch higher development potential and therefore cut possibility of losses .

However, it will be interesting to see if civic authority actually allows usage change for a ready tower. But there are others who envisaged upcoming sluggish commercial market and therefore modified their plans. Last year, Godrej Properties, the real estate development arm of Godrej Group, resized and repositioned its projects in Ahmedabad and Hyderabad with focus on residential development.

Godrej’s Ahmedabad township resizing and repositioning effectively reduce the developable area to 24 million sq ft from 40.4 million sq ft, while increasing the ratio of residential area to 90% of total area from 65%. Citing silent period ahead of its annual earnings, Godrej Properties declined to comment on queries related to preference to residential development. While responding to an analyst query in its earnings conference call in November, the company’s managing director and chief executive officer Pirojsha Godrej had said that the company does not have any plans to launch additional commercial real estate in Vikhroli in the near future and the total development is skewing towards residential.

http://articles.economictimes.indiatimes.com/2013-05-02/news/38983913_1_commercial-space-oberoi-realty-residential-project

NCP raps CM over Metro, Mhada flat rates

MUMBAI: The Nationalist Congress Party (NCP), which is facing a barrage of allegations against departments held by its ministers, on Thursday struck back at chief minister Prithviraj Chavan.

Besides targeting the Chavan-controlled MMRDA over cost escalation in infrastructure projects, the party also hit out at Mhada, which also comes under the CM, for fixing “unreasonable prices for homes” to be allotted through a lottery this month.

On Wednesday, Chavan had flagged off a 3km trial-run for the first Metro route (Versova-Andheri-Ghatkopar). A day later, NCP spokesperson Nawab Malik took a dig at Chavan. “People’s issues won’t be resolved by merely flagging off a trial run,” Malik said. “People are not interested in promos and trailers any more. They want to know when the Metro train will be opened to public,” he added.

Questioning delays and cost escalations in MMRDA projects, including the Eastern Freeway and the Santacruz Chembur Link Road project, Malik said Chavan should “personally look into this aspect”. He alleged that the agency officials were behind inordinate delays and demanded fixing of accountability in this regard.

Sources said party leaders and senior ministers were miffed by Congress’s move to keep NCP leaders out of the trial run.

Meanwhile, party leader and deputy chief minister Ajit Pawar launched a veiled attack against Chavan over the cost of Mhada homes. “The cost of homes announced by Mhada is unreasonable and unjustified. The department is with the chief minister. He must look into it. We (the NCP) have already expressed our concern to him over the issue,” Pawar said.

Claiming that the Mhada had priced some projects at Rs 9,000 to Rs 10,000 per sq ft, Malik later demanded that Chavan issue directives to Mhada under Section 164 (1) of the Mhada Act to reduce the rates.

Malik alleged that instead of building “affordable homes”, the Mhada was now competing for space with private developers. He also alleged that the “unjust” prices were being fixed on the basis of super built-up calculations, flouting the state’s policy to sell flats on carpet area basis only.

http://articles.timesofindia.indiatimes.com/2013-05-03/mumbai/39007705_1_prithviraj-chavan-nawab-malik-ajit-pawar

Housing property prices in the Mumbai metropolitan region have started rising again

MUMBAI: According to research firm, Liases Foras, property prices in the past three months ending March have risen by three percent over the previous quarter. This is a reversal to the trend in the quarter ended December 2012, when prices marginally dipped by one per cent over its previous quarter.

Despite the marginal dip in prices during October-December 2012, only about seven per cent of the total inventory was sold. This led to a major inventory pile-up that will take at least 40 months to clear at the current pace of absorption, says a report by Foras. At present, the city’s property market has an unsold stock of over 133.39 million sq ft. A healthy market does not maintain more than eight months of inventory ideally.

Data by Liases Foras also points out that the weighted average price of the unsold inventory in Mumbai Metropolitan Region (MMR) between January-March comes to Rs 11,626 per sq ft. As against this, the average price of the homes sold in the same period was Rs 8,972 a sq ft (23 per cent lower).

While the current rate of property stands at Rs 11,626 per sq ft (for the quarter ending March 2013), it was much lower at Rs 11,295 per sq ft in the previous quarter.

Though sales during the quarter happened across segments with buyers mainly looking at affordable homes, the report states that the maximum number of homes in the unsold stock are in the range of Rs 1crore to Rs 2 crore.

http://articles.timesofindia.indiatimes.com/2013-05-01/mumbai/38956546_1_unsold-stock-mumbai-metropolitan-region-ft

5-acre Byculla mill plot up for sale

MUMBAI: Another big ticket land transaction seems to be in the offing at the erstwhile mill enclave in central Mumbai.

In a move that could revive interest in land transactions, the New Great Eastern Spinning and Weaving Company Ltd textile mill land in Byculla is now on the market for sale.

The decision to sell follows an amicable settlement of a dispute between the two joint venture partners, Mahindra Lifespace and the Kanoria family, who is the land owner.

Situated near Jijamata Udyan on Ambedkar Road, the defunct mill is spread across five acres with a development potential of about five lakh sq ft. Sources say both parties agreed to sell the land and share the proceeds with the majority share going to Mahindra. Industry experts expect this deal to fetch more than Rs 500 crore.

Experts say the property market may be currently stagnant but the realty company is banking on an unsatiable urge among developers to purchase land. “Their valuation is based on the last sale price in the same area. In 2011, Piramal realty purchased the seven-acre Mafatlal Mills land behind Jijamata Udyan for Rs 605 crore,” said a property expert.

A senior management official of Mahindra Lifespace confirmed the proposed sale, adding that an announcement has been made in the Bombay Stock Exchange. The realty company has also asked leading developers like Runwal, Lodha, Peninsula and Piramal Realty to quote their financial bids for the property.

Incidentally, this is among the earliest defunct textile mills that opened up for development following a state government decision in 1991.

On July 14, 1995, the Kanoria family entered into a joint venture agreement with Mahindra and Mahindra to develop the land.

According to the agreement, Mahindra gave an advance in excess of Rs 35 crore to the Kanorias to fulfil certain formalities and it also formed a company, Mahindra Gesco. However, differences arose between the two and an arbitrator was appointed by the Bombay high court. Both parties ended their differences a few weeks ago by filing consent terms in court.

http://articles.timesofindia.indiatimes.com/2013-05-05/mumbai/39041836_1_mahindra-lifespace-piramal-realty-mahindra-gesco