Mumbai: Acres of prime real estate have got unlocked in Mumbai by way of the Ministry of Defence’s single order of reducing the requirement of taking its nod from 500 metres to just 50 metres. While it provides relief to lakhs of residents in Mumbai, whose redevelopment projects are stuck for want of this clearance, it also means real estate prices remaining stagnant for a few years to come.
“The order comes a breather for residents as well as for the developers. It opens up a lot of areas that were restricted due to Defence installations for development, redevelopment and slum redevelopment,” said Niranjan Hiranandani, Co-Founder & Managing Director, Hiranandani Group and National Vice Chairman of National Real Estate Development Council (NAREDCO).
Recently, for one of the projects in Mumbai – Hiranandani Heritage at Kandivali West, the developer had to move the Bombay High Court to get an order in its favour.
“I was stuck in the Kandivali project for the same reason. I had to go to the High Court and get an order against the military establishment, which I got a couple of years ago. I had to spend about two years, delaying the project,” added Mr Hiranandani.
In the years to follow, there is a possibility of abundance in supply of new residential and commercial projects from the buildings that have been waiting for such an order to pave way for reconstruction of the existing structures.
“More land has been unlocked than ever. As the supply grows in the market, there will be pressure on the property prices. For a long time to come, prices are unlikely to increase. The rates will only rise due to inflationary pressures. For developers, this also translates into a low margin game,” opined Pankaj Kapoor, Founder & Managing Director of Liases Foras, a non-broking real estate research firm.
Going forward, the absorption rate or the demand will regulate the supply of new project launches via the redevelopment route. This may also mean builders not picking up bigger land parcels as well as land prices in Mumbai rationalising.
“There will be correction in the land prices unless compensated by higher Floor Space Index,” added Mr Kapoor.
LIST OF AREAS MENTIONED IN MoD ORDER
Mumbai Less Ordnance Depot
Colaba Military Station
Forward Support Base, Erangal, Malad
INS Hamla, Malad
Material Organisation, Ghatkopar
INS Tanaji, Mankurd
INS Trata (Site II, III & IV) Worli
Naval Lands, Kalyan & Ambernath
Headquarters (West), Worli
ICGS Murud Janjira
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