Mumbai:Corporate biggies put prime city properties on sale

Rajshri Mehta TNN  Mumbai: Sell when the going is good, that's what the pundits say. But a few corporates and multinationals are effecting a trend reversal of sorts by selling when property sales in Mumbai have dipped. Keen on consolidating their financial position, three big companies have put their flats and commercial properties in the market.      One of them, Bishopsgate, is a five-storeyed residential building co-owned by Standard Chartered and the Hongkong and Shanghai Banking Corporation Ltd in upscale Breach Candy. Located opposite the Breach Candy club, the building is spread over 2,075 sq metres or approximately 22,000 sq ft. Its market value: a cool Rs 300 crore. Senior bank executives, including the chairman of HSBC, currently reside in the 20-odd flats of 3,000 sq ft each.      Citibank, a leading USbased bank, recently put up for sale a 3,000 sq ft flat in Usha Kiran building on Altamount Road for an estimated price of Rs 18-20 crore. 'Renting a flat works out cheaper than buying it'  Mumbai: Property sources say Citibank is likely to put its 2,500 sq ft apartment at Il Palazzo on Malabar Hill back in the market later in the year. It may be recalled that former BJP MP and actor Vinod Khanna had quoted an astounding Rs 1.25 lakh per sq ft for the flat, but the deal fizzled out later.      HSBC and Citibank officials refused to comment on the properties that are being put on the block.      Property consultants are not surprised by the move. "The reason simply is to show a healthy balance sheet. There is no point in blocking assets worth crores of rupees in maintaining a property. In the current environment, renting an apartment works out to be much cheaper than outright purchase," said Pranay Vakil, chairman of Knight Frank. "It's the newer properties where one notices sluggish sales because of their high rates. We are noticing a trend of buyers looking at old properties with a substantial number translating into sales. Not surprising then that corporates who own flats in such good buildings are putting them in the market," said a veteran property broker in the area.      Hindustan Unilever Limited too has put on the block two seven-storeyed buildings: their former headquarters at Churchgate and Gulita, a training centre at Worli seaface. Three lending institutions—State Bank of India, Bank of Baroda and a large non-banking finance company—are said to be frontrunners for the Churchgate building. Spread over 1.54 lakh sq ft, the property is said to be worth approximately Rs 500 crore in the open market.      Worth about Rs 300 crore if sold in the open market, theWorli sea-face property is little under an acre at approximately 40,500 per sq ft. Ten to twelve well-known developers like Sheth, Peninsula, Wadhwa, Runwal, Lodha and Ajay Piramal are learned to have submitted bids for the property. In their bid document, HUL has proposed to sub-lease the property for anything between 30, 60 or 90 years. There is also an option to quote a price for outright sale.      Property consultants believe the HUL deal for Gulita will take a long time as the bid conditions are quite complicated. "This is a BMC leasehold land. Though leased on perpetuity, HUL will have to pay 50% of what it earns from the sale price to the civic body. It is a case similar to the Glaxo property which was purchased jointly by Vikas Oberoi and ICICI Ventures. HUL wants to avoid paying this sum and has therefore, come up with this unique sub-leasing concept which involves the successful bidder paying advance rent for a stipulated period," said a senior property consultant. Bishopsgate, at Breach Candy, is co-owned by HSBC and Standard Chartered Bank. The 5-storeyed building has a market price of nearly Rs 300 crore The market price for Gulita, a seven-storey building owned by Hindustan Unilever Ltd on Worli sea-face, is estimated at Rs 300 crore

Read more...

CM clears FSI premium plan, builders see red

Mumbai: In perhaps his quickest decision till date, chief minister Prithviraj Chavan is believed to have given the go-ahead to the new building approval guidelines prepared by BMC commissioner Subodh Kumar in a move that could meet with strong resistance from builders. 

    A 100% premium is proposed to be levied on developers who utilize over 25% of the sanctioned FSI (the ratio of permissible builtup area vis-a-vis the plot size) for a residential project. The plan could earn the civic administration about Rs 3,000 crore a year. 
    Mantralaya sources told TOI on Wednesday that the state government would issue a formal notification in a "day or two" inviting suggestions/objections from the public. Activists, NGOs, urban planners, architects and, more importantly, builders are expected to participate in the public hearing that will be held over 30 days. After the process is over, the government will formalize the policy. 
    Builders across the city, who spoke to this newspaper in private, said approaching the courts was a "very strong option". "Why the hurry to push through a proposal which will affect the entire industry and increase property prices?" said one of them.FSI PREMIUM PLAN Developers plot legal battle 
Mumbai: BMC commissioner Subodh Kumar's new building approval policy seeks to charge builders 100% premium on certain areas of a residential building that are currently available virtually free of cost to developers. But many builders sell these areas at market rate to flat buyers. 
    As the chief minister seems to have agreed to the plan, builders are eyeing a legal battle. A developer said once the issue lands in court, it will delay the policy's implementation for a "long time". "Hopefully by then the commissioner would have retired," he said. 
    Many developers who paid astronomical sums for land but are still awaiting construction approvals will be the worst-hit when the commissioner's guidelines are approved. In the past one year, some builders outbid competitors by quoting a few thousand crores for prime plots in Mumbai. Their valuation was based on buildingconcessions they hoped to procure from the BMC and build way beyond permissible limits and earn windfall profits. Kumar's proposal plans to restrict this additional construction—flowerbeds, pocket terraces, decks, voids—to just 25% of the total builtup area and charge builders 100% premium for it.Currently, these areas are not counted in the building's FSI. Builders sell these areas at market price and tell buyers to amalgamate them illegally into their living room or bedroom to make them more spacious. In the island city, some developers have converted entire refuge floors into party halls. 
    The non-profit Urban Design Research Institute, comprising eminent Mumbaikars including leading architects and urban planners, said Kumar's policy, among other things, will reduce speculation. "Though in the short term builders and developers will retaliate by increasing prices to show their dissent, in the long term there will be a price adjustment that will bring down the average price per square foot and reduce speculation and overcharging," said UDRI executive director Pankaj Joshi. 
    Builders operating in the Bandra to Juhu belt are equally worried because the maximum misuse of building concessions granted by past municipal commissioners was noticed in these areas. 
    Utsal Karani of NGO Janhit Manch said the BMC should carry out a survey of all new buildings where occupation certificates were issued in the last 2-3 years to find out possible violations, irregularities in building bye-laws and use of excess FSI. 
    "All under-construction projects must be placed under special scrutiny, including physical verification of the layouts, areas of such projects and further scrutiny after two years of occupation certificates being granted," he said, adding that civic officials who cleared such a building proposal be prosecuted.

Read more...

Mumbai:Foundation laid for greener and safer skyscrapers

BMC Norms To Free Space, Ease Parking Woes

Linah Baliga TNN 

Mumbai: A city that looks like a cramped row of shiny, tall matchboxes in places, Mumbai is finally going to get some respite. The civic body has accepted a set of guidelines that make it mandatory for developers to build safer, better, airier high-rises. 
    The norms, which were formulated by a state-appointed committee under the chairmanship of retired Justice Shafi Parkar demand that at least 20m space be left between skyscrapers, parking space be provided for guests' vehicles and the use of glass facades be minimized. 
    They dictate that swimming pools be built on lower storeys of a highrise, enough importance be given to 
the forecourt area, and commercial high-rises have pedestrian and clear spaces. Right at the time of furnishing their proposals, developers must specify the planned building's water needs and its impact on the neighbourhood, water sources, water distribution system as well as the estimated sewerage generated by the skyscraper's residents and how it will be treated. 
    A high-rise, as defined officially, is a building at least 70 m high or with minimum 20 storeys. Put together, the regulations are bound to slow down, if not altogether check, the rapidly decline of the city. If implemented rigorously, they will create more free space, decongest roads, preserve streetscapes and, help the environment. 
Tall Order 

• No permission for high-rise unless the plot is about 1,000 sq m or more 

• A distance of at least 20 m must between two buildings 

• Parking space for visitors' vehicles mandatory 

• Provision has to be made for two staircases 

• Use of glass facade must be kept to minimum 

• No swimming pools on the upper storeys 14 proposals okayed under new guidelines New Rules On High-Rises Aim To Create Free Space, Decongest Roads & Preserve Streetscapes We have decided that the minimum area where a highrise can come up should be 1,000 sq m and that there should be a space of 20 metres between two high-rises. There should also be a 20-metre-wide road abutting the high-rise," explained Parkar. 
    Parkar's committee was set up in 2010 after the previous panel's suggestions were overruled by the civic body on the grounds that they did not fit in with the development control regulations. 
    In December last year, the new committee directed the chief engineer of the civic development and planning department not to accept new proposals till the committee finalized the guidelines. Once the norms were completed and accepted this year, the committee cleared 14 proposals. 
    Called the new 'environmental and contextual guidelines', they say that there should be a distance of at least 20 metres between two high-rises to provide a breather and to improve safety against hazards. 
    Also, there should be two staircases in each highrise—one minimum 2 metres in width and the other at least 1.5 metres wide—to prevent "a stampede during an earthquake". 
    The committee also directed that easily accessible pedestrian walkways be created between high-rises and open spaces like playgrounds and recreation grounds. 
    "We have insisted on separate parking facilities for cars, cycles and bikes of visitors to prevent congestion on road. Also, the use of glass facade should be kept to minimum. New high-rises should not come in the way of landmarks and historic buildings," said Parkar. 
    Besides the guidelines, the committee has also formalized a format for proposals to build high-rises. From now on, developers have to furnish all kinds of details—including names and addresses of the architect, the geostructural engineer and the project manager—while proposing a skyscraper project. 
TALL ORDER 
The road adjoining the building should be minimum 20 m wide 
Wind movement around the high-rise has to be analysed from microclimate point of view 
The road facing the building's facade should not be featureless

Read more...

Exceed FSI by 25%, pay 100% premium: BMC

Mumbai: The Brihanmumbai Municipal Corporation (BMC) wants to mop up around Rs 3,000 crore a year by levying a hefty premium on developers who want to build beyond the permissible floor space index (FSI). 

    On Tuesday, municipal commissioner Subodh Kumar explained the proposed guidelines for the construction industry to chief minister Prithviraj Chavan. TOI has learnt that Kumar's proposals include allowing developers to build an extra 25% above the sanctioned FSI in a residential project, for which they will be charged 100% premium. FSI is the ratio of permissible built-up area vis-a-vis the plot size. 
    For commercial buildings, the BMC will allow 15% additional built-up area and charge a similarly hefty premium. These additional areas include flower beds, lily ponds, voids, staircases, balconies, car decks and terraces, which at present are not counted in the FSI. However, many builders illegally sell them to the flat buyer and encourage them to amalgamate these spaces into their living area. For instance, the living room could be expanded by taking the flower bed area into it. 
Managers for societies? 
    In a bid to streamline the handling of disputes, the cooperatives department has proposed that every CHS with more than 50 flats should have a professional housing manager. P 3 Flat prices will soar 30-40%, say builders 
Mumbai: Municipal commissioner Subodh Kumar's guidelines on levying 100% premium if a builder exceeds the permissible FSI have rankled a section of Mumbai's builders, who say apartment prices will increase by 30% to 40%. 
    However, senior civic sources debunked the claim, saying there was no correlation between the proposed premium and property prices. "The new guidelines, if approved by the state government, will break the nexus between unscrupulous builders and corrupt civic officials. It will also put an end to the misuse of certain spaces within a building," said one of them. Some builders, too, described Kumar's new plan as "pathbreaking" and said it would expedite building approvals and curb corruption. 
    Civic officials said the misuse was so rampant that some builders could virtually double the size of the saleable area of an apartment by illegally merging these "free of FSI" spaces into the habitable area. The BMC detected that in some cases, while the actual size of the flat was just 1,500 sq ft, the terrace adjoining it could measure 3,000 sq ft. The builder would sell the apartment showing its size as 4,500 sq ft. Although rules restrict a flowerbed area to 1.2-1.5 m, some civic commissioners had in the past allowed 
certain builders to 
construct up to 3 m. 
    Civic sources 
said this is the first time in the recent history of the BMC that a municipal commissioner has turned the screws on builders. The new guidelines say building proposals will be cleared at the level of the BMC executive engineer and developers need not approach the civic commissioner for concession. 
    The commissioner has proposed that the height of the ceiling be reduced from 4.2 m to 
    3.6 m to prevent 
    construction of a mezzanine floor.Additional parking space in a building, which is beyond the mandatory requirement, will be counted in the FSI. Developers said this would lead to problems because many families own more than one car. "Will they be forced to park on the road?" wondered one of them. Car decks on each floor will not be permitted.Otherwise,they will be counted in the FSI. 
    Similarly, a 
    covered swimming pool within the flat will also be counted in the FSI. Servants' toilets, which were allowed on the floor landing earlier, will now be sanctioned only in the mid-landing area of the staircase. The building's society office room, meter room, mailbox room or the management services room in a mall/office building will be free of FSI only if they are not adjoining the habitable area so as to prevent their misuse. 
HIGHER FSI, MORE MOOLAH 
The premium is based on the ready reckoner rate Currently, the BMC charges 25% premium on areas (staircases, lobby, flowerbeds etc) that are free of FSI 
The civic body now proposes to charge premium on these free areas 
The BMC hopes to collect at least 3,000 crore by levying 100% premium New guidelines will reduce builder's saleable area For commercial buildings, BMC will allow 15% additional built-up area and charge a similarly hefty premium THE OTHER PLANS 
Height of the ceiling to be reduced from 4.2 m to 3.6 m to prevent the construction of mezzanine floor 
    Additional parking space beyond the mandatory requirement will be counted in FSI Building's society office or meter room will be free of FSI only if they are not adjoining the habitable area 
    Covered swimming pool within the flat will be counted in FSI, it has been proposed

Read more...

Mahindras to buy SoBo bldg for 270 crore

Group MD Was Born In Nepean Sea Rd Bungalow Mumbai: Mahindra Lifescape may buy the threestorey Nepean Sea Road bungalow in which Anand Mahindra, VC and MD of Mahindra Group, resides as a tenant with his family.      The Mahindra family's tenancy dates back to the times of Mahindra's grandfather, K C Mahindra. The deal is believed to be worth close to Rs 270 crore. Located close to Priyadarshini Park, Gulistan is spread over 15,000 sq ft. Mahindra Lifescape, the real estate wing of the Mahindra Group, has signed a preliminary agreement with the two owners, Orbit Corporation and Rishi Gagan Trust, whose beneficiary is businessman Om Navani. Navani had bought the bungalow in the early 1980s while Orbit acquired the property in 2008.      Arun Nanda, chairman of Mahindra Lifescape, told TOI that they are in the process of carrying out due diligence of the property. "We are currently in the process of talking to lawyers and six tenants, including Bank of Maharashtra, on their settlement terms for tenancy rights. We have agreed to take over some liability. The sale price is much lower than the quoted deal price of Rs 270 crore," said Nanda. The firm has made an advance payment of Rs 11 crore.      According to Nanda, the company will execute the redevelopment plan itself once the transaction was completed. "It's a deal between the two real estate companies and does not involve the group's VC. It's too preliminary for me to say how many floors I will construct as I am yet to finalize the design," said Nanda.      Real estate sources said that once the deal is signed, the Mahindras will continue to be tenants, paying rent to Lifespace. They will be compensated with an equivalent space in the new building when redevelopment was undertaken. "There is an alternative thought; if the tenants are relocated with monetary compensation, then the new building could be used to house Mahindra, with the other floors used for senior Mahindra executives. But, taking into account the prime location, it is doubtful whether the other tenants would agree," said a real estate source. Gulistan near Priyadarshini Park

Advertisement

Read more...

Tenant Mahindra to Buy Out City Bungalow for 270 cr

Group arm to buy Nepean Sea Road property where Anand Mahindra was born

The Mahindra Group's real estate arm will pay close to . 270 crore to acquire a three-storey bungalow on south Mumbai's Nepean Sea Road in which Vice-Chairman and Managing Director Anand Mahindra was born and lives as a tenant. 

The bungalow, named Gulistan, occupies around 13,000 square feet of land opposite Priyadarshini Park and is owned by a special purpose vehicle set up by one of Mumbai's top builders, Orbit Corporation. Rishi Gagan Trust, whose beneficiary is businessman Om Navani, also has a small stake. Navani had bought the bungalow from an earlier owner in the early 1980s while Orbit acquired the property in 2008. 
Arun K Nanda, chairman of Mahindra Lifespace, the real estate arm, said his company has signed a termsheet, or a preliminary agreement, with the current owners and made an advance payment of . 11 crore. 
"The company has a 90-day window to complete due diligence and complete the transaction," he said. It will have to come to a settlement with its co-tenants that include Bank of Maharashtra, which operates its Nepean Sea Road branch from the premises. Nanda, who became non-executive chairman of Mahindra Lifespace in March 2010 after Mahindra stepped down as chairman, also said the deal amount was not . 270 crore.

Anand Mahindra's Gulistan

Read more...