Developers feel with the real estate market slowing down, the timing is not right to buy 86,823 sq m of Transfer of Development Rights
Around 10 days ago, MMRDA had put up a land parcel in Bandra-Kurla Complex for auction expecting Rs 1,500 crore for it. On April 6, the MMRDA put 86,823 sq m of Transfer of Development Rights (TDR) for sale.
Recently the MMRDA put up land at Bandra Kurla Complex for auction. The TDR is from slum redevelopment areas at Goregaon, Jogeshwari and Ghatkopar. File picture
Going by market value this should fetch them over Rs 434 crore. However, at a time when the real estate market is down, and the Bombay High Court has stopped all permissions for new construction, the TDR won’t be of any use for developers, unless they have a lot of money to put in reserve for TDR. TDR can be used by a developer in the north of the city exactly like FSI.
The tender notice that came out on April 6, signed by Metropolitan Commissioner UPS Madan reads, “Mumbai Metropolitan Region Development Authority (MMRDA) has generated construction TDR from its Slum Rehabilitation Projects. Out of the said TDR, MMRDA had already sold out 15,314.75 sq m and proposed to sell the balance of 86,823 sq m.”
The TDR available are from five slum redevelopment pockets at Goregaon, Jogeshwari, and Ghatkopar. The e-tender with the details was to be available on the e-Tender portal from April 6, 2016 (12.01 PM) to April 26, 2016 (12.00 noon). The applicant has to pay the tender cost of Rs 10,000/- and Earnest Money Deposit of Rs 1 crore before submission of the tender. The tender shall be finalised based on highest rate quoted by the applicant, subject to eligibility.
Prakash G Rohira of Karma Realtors said that this is not the apt time for builders to invest money in buying TDR. “Already the market is in bad shape, builders do not have much money as sales aren’t taking place. Also there is no new development that is being passed by BMC, where TDR can be used. In such circumstances, the chances that MMRDA will make much money are bleak,” he said.
He further added, “The ongoing rate of TDR in suburbs varies between Rs 4,500 and Rs 6,500 per square foot and hence, by an average of Rs 5,000, this TDR should fetch somewhere close to Rs 430 crore and above if it attracts builders.” A senior official from MMRDA said, “We are expecting a good response from the market.”