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Mumbai- based Kanakia Spaces Realty Pvt Ltd has acquired development rights for redevelopment of two old buildings in Mumbai’s Borivali area. The agreement value of the two development agreements (DA) is worth ₹208.53 crore, according to property registration documents accessed by CRE Matrix.
The two housing societies that are over 50 years old are located in Govind Nagar area of Borivali, Mumbai, and will be redeveloped under the cluster redevelopment policy of the Maharashtra government, the documents showed.
The transaction was registered on September 12, 2024 for which stamp duty of ₹11.40 crore was paid, according to the documents.
The first building named Shree Mohan Chs Ltd is spread across 2.02 acres and the residents occupy 70,616 sq ft. This will be given an additional area of 36% area in the redeveloped building measuring around 96,038 RERA carpet and every flat will be allotted one parking space, the documents showed.
In case of a second building named Shree Balwant Chs Ltd spread across 1.31 acres the residents will be given 45% additional area above the existing area of 55,869 carpet area along with 51 car parkings, the documents showed.
The tenants in both the old buildings will be provided ₹60 per sq ft monthly rental for the period of redevelopment. The developer will redevelop the old buildings in a period of 36 months and complete the entire project (saleable component) and obtain full occupation certificate (OC) in 66 months, the development agreement showed.
An email query sent to Kanakia Spaces Realty Pvt Ltd and to the housing societies did not get any response.
Also Read: Mumbai real estate: 10 things homeowners of societies looking to get their buildings redeveloped should keep in mind
What is redevelopment?
In Maharashtra, several old buildings, especially those comprising two to seven storeys, are currently being redeveloped.
Redevelopment of housing projects involves the demolition of the old structures and replacing them with a modern and bigger building subject to various norms.
Under the redevelopment model, a developer signs a development agreement with homeowners residing in these old buildings.
The developer promises extra area to each of the flat owners after redevelopment. In exchange, the developer gets to utilize the remaining unused Floor Space Index (FSI) of the plot and build additional homes to sell at a premium in the open market.
For example, if there are 50 flats in a five-storeyed building and each flat is of 450 sq ft, the developer will sign agreements with the 50 owners and commit to give each of them a 500 sq ft flat in the redeveloped building.
In lieu, the developer for example constructs 100 flats of 500 sq ft and after giving 50 flats to the owners, he will sell the remaining in the open market and make a profit.
Also Read: Here’s why real estate developers from other cities are making a beeline for redevelopment projects in Mumbai
What is cluster redevelopment?
Cluster redevelopment policy is where more than one plot or building is merged by forming a cluster and redeveloped as one project. Under this, the Maharashtra government gives various exemptions including additional floor space index (FSI) to developers, considering it takes care of the old buildings in the city of Mumbai.
In May 2023, the Maharashtra government had also announced a 50 percent premium waiver payable by real estate developers for its cluster development policy in Mumbai for a period of one year, a move which is expected to aid redevelopment of old buildings in the city.
Other redevelopment deals in Mumbai real estate market
Listed real estate developer Macrotech, which operates under the Lodha brand name, had in October 2023 signed a development agreement for development in the free sale component of a slum rehabilitation project in Mumbai’s Worli area. The total agreement market value of the deal is ₹359.48 crore, according to documents accessed by CRE Matrix, real estate data analytics firm.
Also Read: Puravankara enters South Mumbai’s super luxury real estate market, secures rights to redevelop project in Breach Candy
Several other developers like Rustomjee Group, Puravankara, Ajmera, MICL among others are involved in redevelopment of several old buildings in Mumbai.
