While there are a number of listed realty companies that will benefit from the municipal corporation’s hike in floor space index (FSI), Gulam Zia of Knight Frank says a new breed of developers too may rise to seize the opportunity.
The Brihanmumbai Municipal Corporation (BMC, in its 20 year development plan, has proposed increasing the FSI to a maximum of 8. FSI is the ratio of the permissible built-up area to the plot area and was 1.33 for Mumbai city and 1 for the suburbs.
Also read: State govt may look into uncapping Mumbai FSIZia says that the master planning will now have to be done keeping in mind the transport infrastructure.
Below is the transcript of Ghulam Zia’s interview with Sonia Shenoy and Latha Venkatesh on CNBC-TV18.
Sonia: Can you just put this news flow into perspective for us, how will it impact both the developers as well as the buyers?
A: The development side if I look at it, the developers who are essentially in redevelopment will be directly benefited because the others who don’t have a on-hand experience of redevelopment may not be the parties impacted straightaway. There are quite a few of these listed players right from HDIL to Akruti to DB Realty who have essentially large portfolio comprising of redevelopment properties and they are the ones who will have a good opportunity.
On the other side, it is possible that a new breed of developers can also emerge. Whatever said and done, huge amount of opportunity for developers with this increased FSI windfall.
Latha: Play the devils advocate, do you not think that there will be somebody who will cry out for the city itself and abolish and ban this eight FSI before it takes root? It can be disastrous for a city which is already replete with traffic jams and water and sanitation problems. Do you think eight will come at all?
A: The point is, as I realtor if I talk about and give you my view the business is looking good. If I talk about this whole thing as a citizen obviously I am concerned a lot purely because the areas which are any case congested we are talking about increasing FSI over there. This whole master plan does not take into consideration the infrastructure requirement of the city. So, unless the integrated infrastructure plan is put into perspective, increasing the FSI will only kill the already strained infrastructure further and that can kill the lifestyle of the whole city.
Sonia: What about prices, I mean there will be supply increase in only concentrated areas as we pointed out like Dadar, Andheri, etc, so what will this do to real estate prices?
A: There is a big challenge in front of the administration to control the inflation in real estate. However, these small and haphazard policy matter changes here and there only add negativity. They actually bring the prices up. So, unless there is the consolidated master plan with good focus on infrastructure development whatever supply we are talking of coming in that will only have further northward pressure on the prices.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
