Govt relaxed norms for the floor area ratio and ground coverage for plots. Land prices in a few locations in Delhi have already risen sharply
Land valuations in Delhi are expected to rise by 10-20 per cent with the government relaxing norms for the floor area ratio (FAR) and ground coverage for plots in the national capital.
Valuations might climb further if the norms on density and height are also relaxed. Land prices in a few locations in Delhi have already risen sharply after the announcement of a land pooling policy by the Delhi Development Authority (DDA) a few months ago, according to experts tracking the sector.
The stocks of real estate companies with considerable land parcels in Delhi, including DLF, Unitech and Anant Raj Ltd, were up today on the BSE.
Anuj Puri, chairman and country head, JLL India said, “It will make the apartments bigger, and with no change in density norms, ticket-sizes might rise as well. A sizeable uptick in the stock prices of listed players likely to be holding prime land in Delhi, notably DLF, Unitech and Anant Raj, has been seen. Better valuation for such land on account of increased FAR for residential plotted developments is the likely factor behind this increase in their respective stock prices.”
According to an official statement from the urban development ministry, the FAR for plots of 750-1,000 sq mt has been increased from 150 per cent to 200 per cent, while it has been increased from 120 per cent to 200 per cent for plots of 1,000 sq mt and above. The ground coverage for plots of 750-1,000 sq mt will remain at 50 per cent while for plots of 1,000 sq mt and above it stands increased from 40 per cent to 50 per cent.
A proposal by the DDA to this effect was approved by Urban Development Minister Venkaiah Naidu on Monday. The DDA had proposed an amendment to the Delhi Master Plan 2021 and finalised the change after inviting objections and suggestions from the public.
Rohit Raj Modi, president of Credai NCR, said, “This will address the rising problem of providing accommodation to all and in realising the dream of ‘housing for all by 2022’. Rapid urbanisation has already put pressure on the limited land resource in Delhi. This extra FAR will help developers with extra space and in matching the demand and supply gap in Delhi.”
“However, we are waiting for clarifications on the issues of change in density, number of dwelling units and height,” he said.
Puri also said although no clarity had been provided on an increase in dwelling units allowed on larger plots, there was a provision for it in the draft master plan. “Under this provision, the cost of associated civic infrastructure has to be borne by the developer. This provision in the draft master plan can be used to increase the number of dwelling units and, along with the FAR, it can be used for increasing the housing stock on residential plots going forward,” he said.
Under its land pooling policy, the DDA will come up with development plans for about 100 residential projects with an estimated 1.4-1.6 million units across outer Delhi. The DDA has been unable to acquire any land in the last 10 years, which mandated the need for such a hybrid pooling policy in the Delhi Master Plan 2021. About 20,000-25,000 acres of land will be unlocked through 95 villages and it will take about 10 years to fully develop the land.
The population of Delhi is around 17 million and is expected to reach 23 million by 2021.
Source: Business Standard
Dated: 27th November 2014