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Private developers can now bid for DDA land to build housing projects in Delhi

Realty experts welcome move, say DDA should allow private developers to create housing stock in keeping with consumer expectations.

Vandana Ramnani @vandanaramnani1

Homebuyers can now hope to purchase modern apartments in the national capital, with the Delhi Development Authority (DDA) allowing private developers to bid for its land parcels.

The DDA has approved disposal of residential plots for group-housing societies through e-auction to individuals, partnership firms, private and public limited or consortium that have sufficient funds to purchase the land and develop the project.

The decision was taken at a meeting chaired by Lieutenant Governor of Delhi Anil Baijal on August 13.


“Everything will depend on the return on investment a developer will get after bidding for the land parcel,” said a developer, who did not want to be identified.

Experts say the decision will ensure that apartments are designed better, while DDA will continue to have a say on FAR norms and pass construction plans.

Developers, too, are open to the decision but they say it will depend on the modalities—the floor area ratio (FAR), the restrictions that it will come with it and the biggest of all the cost of the land, which will vary from location to location.

“It should be noted that land forms almost 40 percent of the project cost and 60 percent is the cost of construction which is uniform in most areas. Buying land in Delhi is an expensive proposition,” the developer said.

The developer will require to develop group housing as per the terms of the Delhi master plan of 2021, with 15 percent of FAR allocated for community service personnel/economically weaker section (EWS) and low-income category housing. The EWS component will be over and above the permissible FAR.

The developer will have to first complete the EWS portion and get an occupancy certificate before getting the same for the remunerative portion.

The developer will not hand-over possession of other (non-EWS) flats to anyone before handing over EWS flats to DDA, a spokesperson for the authority said.

Real estate experts have welcomed the move, saying as a regulator, the DDA should only focus on developing infrastructure.

“It’s a step in the right direction. DDA should increasingly focus on being a facilitator to the city-level infrastructure and allow private developers to create housing stock, commensurate to the consumer expectation,” said Ramesh Menon, founding director, Certes Realty.

The DDA could monetise its land assets from earlier master plans and re-invest into the land pooling sectors, he said. The new move and the land-pooling policy were mutually exclusive, Menon said.

The land-pooling policy is a part of 2021 master plan. Old land banks that the DDA acquired under any master plan before 2000 would probably come under this, experts said.

The decision will allow private developers to build houses for any segment, said an expert on condition of anonymity. For instance, a Noida developer could launch a mid to high-housing product in Delhi, while there may be others who would only construct premium apartments.

“Everything will depend on the location and the cost of the land. In the last DDA draw, apartments in Vasant Kunj were sold for almost Rs 10,000 per sq ft. A private developer may want to sell it at Rs 15,000 per sq ft,” said the expert.

The DDA on August 13 also gave nod to an online scheme for disposal of 225 commercial built-up properties on a first-come, first-served basis, a spokesperson said.

“Most of these are small shops which may be taken by small shopkeepers who may find it easier to take these shops through the online system. These units are located in Rohini, Narela, East Zone, West Zone and South Zone,” the spokesperson said.

The scheme will be operational until the entire inventory is disposed of. The list of shops and other details would be made available on DDA website.


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First Published on Aug 14, 2019 01:40 pm
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