Petition on Mumbai land dismissed

The Bombay High Court today dismissed the petition challenging use of TDR (transferable development rights) in the corridor area of the city.

As a result, share prices of companies having land in the area or those active in the real estate market in the city have gone up.

Under the TDR policy, additional Floor Space Index (FSI) is given to a land owner who surrenders his/her land to the government for the purposes such as road-widening or slum rehabilitation.

In lieu of such acquired private land, government gives the owner additional FSI, which can be used elsewhere in the city.

Following the HC decision, the share price of Mahindra Gesco went up by 6.6 per cent, Prime Property by 5.3 per cent and Simplex Realty by 5 per cent. Some of the companies which have land in the corridor area include GKW, Hindustan Composites and Bombay Oxygen.

"Now even land transactions which were held up for want of clarity on TDR use will take place," said real estate consultant Axay Kumar, CEO of Colliers International.

"Now 40-50 lakh square feet of incremental development is expected to take place in next 2 -3 years, which can have a sobering effect on real estate prices," said Pranay Vakil, Chairman, Knight Frank India.

According to him, prices of TDR which are in the range of Rs 1,650 to Rs 1,800 per square feet will go up to Rs 2,000 per square feet.

In its recent draft housing policy, the Maharashtra government has said TDR from Mumbai will be allowed to be used outside Mumbai. But with the court allowing it to be used in the city area, that provision will become redundant.

It is believed that the current stock of TDR including slum TDR in Mumbai market is around 20-30 lakh square feet.

Most of the projects that were held up on account of stay on use of TDR were in premium areas around the railway track, including near LBS Marg in eastern suburbs and near SV Road in western suburbs.

It is estimated that more then 200 projects involving investment of Rs 2,000 crore to Rs 3,000 crore were stuck up due to stay on use of TDR.

Bhagvanji Raiyani of Jan Hit Manch had filed a petition in the HC, seeking a ban on use of TDR in the corridor area, arguing that it will increase pressure on infrastructure and increase water shortage.