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Gentrifying factory belts: Everything you wanted to know about Delhi’s luxury housing projects on mill lands

Several industrial areas and mill lands in the Capital have given way to premium residential projects. Developers say affordable housing can come up and reduce migration to NCR towns, provided conversion charges are reduced and infrastructure is improved

Representative image (Source: ShutterStock)

Representative image (Source: ShutterStock)

Several industrial areas in West Delhi that were earlier considered to be on the outskirts are now part of the main city, thanks largely to massive urbanisation and an increase in population. Over the years, a few real estate developers have launched luxury projects on what used to be mill and industrial lands, in areas such as Moti Nagar, Karol Bagh, Naraina and Mayapuri.

With the authorities endeavouring to move polluting manufacturing units to the periphery, more land parcels will come up for development of real estate projects and infrastructure within the city. But will there be enough takers?

The capital’s masterplan

It was the Delhi Masterplan 1962 that had made a strong case for any hazardous industries shifting out of the national capital. As a result, some mill owners have sold their lands to developers. The DLF-DCM deal at Moti Nagar is a case in point.

DLF Capital Greens, a premium residential project in Moti Nagar, was built on industrial land spanning 28 acres, and the development houses over 2,800 premium apartments.

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“Over time the industrial area had transformed with the development of physical and social infrastructure making it suitable for high-end real estate developments. Factories in the Okhla Industrial Estate and Mohan Cooperative have also made way for commercial real estate developments,” says Anuj Puri, chairman, ANAROCK Group.

He adds that as the capital city of New Delhi continues to expand, industrial areas such as Mohan Cooperative, Okhla Industrial Estate and Moti Nagar have undergone a  transformation. These locations earlier housed major industrial units when they were considered to be on the outskirts. However, as residential areas developed around them and the need for a cleaner environment became more pronounced, local bodies initiated moves to relocate the industries to places such as Bawana.

In Karol Bagh, DCM entered into a deal with Unity Group in 2011. The Amaryllis residential project, launched by Unity Group, is on a land parcel of 40 acres. It will have 2,500 units, of which 700 are for premium housing and 1,800 for luxury. Phase-III has 150 super-luxury branded apartments.

“The DCM-Unity group deal happened in December 2011. Earlier we were talking to Kailash Nath Ansal but this has fructified finally with the Unity group. I had a factory on 24 acres and a residential plot on 43 acres. We have given away the residential plot and my investment is land while the developer’s investment is developing this land,” says Sumant Bharat Ram, CEO, DCM Limited.

“Today, this new development is much better planned, and there is good utilisation of space, with provisions for parking, traffic, and basic circulation. Earlier the coverage was 80% and today it is 19-20%, with the rest of the area open for amenities and green development,” he adds.

Moving industries out

Referring to the 1962 Delhi Masterplan, Ram says: “Nobody wants to put polluting factories in the city. It is a good policy but the government must incentivise people and make it worth their while to come forward and do this. If your idea and mission is to change the city, then please remove all hurdles and become solution finders rather than problem creators.”

Such deals are fraught with red tapism and bureaucratic hurdles, say sources — at every stage, this transformation becomes problematic with the DDA and MCD allegedly creating problems. In one instance, the developer-mill owner had to pay Rs 60-65 crore for a flyover, they allege.

“I feel the industrial real estate can be shifted outside Delhi itself. It’s the capital of the country,” says Harsh Vardhan Bansal, Director of Unity Group.

“The idea behind Delhi’s 1962 Master Plan was to relocate polluting industries inside the city to the peripheral areas. Around the world, capital cities only have offices and residential areas. However, in Delhi, you have industries occupying prime lands in locations such as Naraina, Okhla, Wazirpur and Mayapuri. At Wazirpur, you have a steel mill releasing toxic effluents,” says Bansal. “To put up industries, you require a different type of infrastructure — a lot of water, electricity. All industries should be relocated outside the city limits to curb pollution and save valuable capital infrastructure.”

Conversion is the answer: experts

The best option, therefore, is to convert industrial areas into residential zones, say experts.

The government should come up with a redevelopment plan for these areas and improve basic infrastructure. This would make them attractive for developers and encourage more industrial owners to come forward, the experts add.

“The best way is to convert industrial land to residential for which industrial owners should come forward like DCM did. While some of the amount was shared up front, the rest of the area was shared with them through a Joint Development Agreement (JDA) and that is the right way,” says Bansal.

He says that the firm faced challenges for its Karol Bagh project. “The road connecting to our project was very narrow. The infrastructure too was not up to the mark. By surrendering two bungalows for a road, we somehow managed to provide connectivity with New Rohtak Road,” Bansal explains.

Several developers are keen on developing gated communities with modern amenities within the city if given a chance and land is made available at affordable prices.

The slum conundrum 

Developers like Bansal have tried their hand at launching similar projects in Okhla Industrial area but the area is not viable as the neighbourhood comprises of a JJ (jhuggi-jopri, meaning: slum) cluster.

“The fact is that nobody wants to buy a house close to a JJ cluster. This is typical of several industrial areas. Most of them are surrounded with jhuggis or have overflowing sewerage or broken roads. Despite this, the conversion amount to be paid to the government is huge. Often, it is as high as Rs 15 crore per acre, which makes the project unviable even though the FAR allowed is 3,” he says.

In order to address the problem of housing within the city, affordable housing projects can be launched in the Capital and that can happen only if land conversion charges are nominal and there is decent infrastructure around the project area.

Potential homebuyers will also not blindly invest in a project but take into account the surrounding areas and connectivity.

“Industrial areas like Okhla can be a nightmare to live in. It's not only about lack of civic infrastructure but also lack of social security as these places have become a hub for drug addicts,” says Snigdha Maheshwari, a resident of Kailash Colony.

(Namrata Kohli is a New Delhi-based journalist and author)
Namrata Kohli
first published: Jun 21, 2022 10:55 am
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