Now, builders in the state can utilise the entire floor space index (FSI) of a plot for commercial development when they surrender a portion of the land for public amenities to the BMC. FSI is the ratio that defines how much can be built on a plot.
The state urban development department issued a clarification to this effect on September 25.
Property market sources said the value of such plots could rise 10% to 40%, depending on the portion to be handed over to the BMC for a public road.
Soon after this clarification was issued, sources said a seven-acre parcel in Vikhroli, which was purchased for Rs 363 crore in 2018, was sold by the owner for Rs 525 crore.
The government’s decision will benefit all plot owners who wish to construct retail or office buildings under Regulation 33 (19) of Development Control and Promotions Regulations. The FSI under this regulation is a humongous 5 for commercial development.
A leading architect said, “If 20% of a 1,000-square-metre plot is surrendered to the BMC for a public road, the FSI the builder received earlier was limited to just 80% of the plot (net area). The department’s clarification last month, though, will now allow the builder to use the FSI on the entire 100% (gross) of the plot.”
With FSI 5, the builder would have earlier got 4,000 sq m of floor space. “Now the developer will be entitled to 5,000 sq m construction. In this case, the value of the plot shoots up by 20%,” he said.
Early this month, Singapore-based Mapletree Investments concluded a deal to purchase the seven-acre land parcel in Vikhroli from Kanakia Group for Rs 525 crore. Kanakia had bought the plot just two years ago from India Tubes & Metal for Rs 363 crore. “This is a phenomenal appreciation in the land value within such a short period,” said a market source.
Mapletree plans to build a commercial project on this plot. Hardeep Dayal, India head, Investments and Asset Management, Mapletree, did not respond to a TOI query on whether the firm planned to build the project under Regulation 33 (19).