Mumbai Development Plan 2034: All set to make Mumbai a world-class city

The much-awaited Development Plan (DP) 2034 by the Maharashtra government is finally here, paving the way for the space-starved city to have more land available to build homes and commercial spaces. The Mumbai DP 2034 has increased the FSI (Floor Space Index) which means developers can now build more on the given plot. More supply of homes coupled with Govt focus on infrastructure is going to be instrumental in changing the city’s skyline for a better tomorrow.

All you need to know about the DP Plan Mumbai 2034:

• The new Mumbai DP 2034 offers promising FSIs for commercial and residential properties. For commercial, it is raised up to 5 & for residential properties, the revised FSI is 3. Earlier it was 1.33 for both residential and commercial developments. For suburbs, new FSI will be up to 2.5 and 5 for residential and commercial properties, respectively. The existing FSI for the two categories is 2 and 2.5, respectively. 

• The Mumbai Development Plan for 2034 intends to utilise salt pan lands for affordable housing. According to the plan, out of the 3,355 hectares in no-development zone, BMC has earmarked 2,100 hectares as well as 330 hectares of salt pan land for affordable housing.  

• A provision has been made to add 42 hectares of open space. The DP plan Mumbai has also designated 12,859 hectares to natural spaces, a new category where no new construction will be allowed.  

• The Mumbai Development Plan is all set to create approx. 1 million affordable houses and 8 million jobs in the city. 

• The new plan encourages the growth to create parks, theatres, playgrounds, theme gardens and museums- something that the city desperately needs. 

• For the first time, Mumbai’s Development Plan has placed the focus equally on commercial real estate with double benefits– firstly decongesting existing CBD areas and secondly, extending the ‘walk to work’ aspect in newer locations.

Post independence, this is the first time wherein a serious effort has been put up for the holistic development of the city.

Cities of Focus: Hyderabad

India is a country that is booming with development from every corner. The country has a total of 4000 cities & towns. However for us, choosing the next city for our real estate project wasn’t very difficult. Rooted in a deep ethnic heritage and captivating historical significance, we zeroed down on ‘Hyderabad’.

Hyderabad during its initial stages had been sparking signs of a global city. Nobody would have imagined the unprecedented growth & development this city was capable of achieving.

●     An influx in the IT sector –Since 1990, Hyderabad had seen a number of foreign IT companies entering the city. At that point, there were over 1000 IT and ITeS companies that included major firms such as Google, Dell, Facebook and more. The city boasts of an employment growth rate of 10%. The IT industry has inculcated a high standard of living for the city which has resulted in an increase in world class real estate projects in the city.

●     Hyderabad’s Infrastructure– One of the high points of Hyderabad’s infrastructure is its metro. The metro, which is already under construction, will have three phases to create unparalleled connectivity across the city. The metro is scheduled to begin operations by November 2018.Plans to decongest the city’s roadways by projects such as the Outer Ring Road are already underway. It’s a city that foresees the future and is already planning to upgrade the existing roads, adding skywalks and more.

●     High Standard of Living– As per the Mercer Survey, Hyderabad is known to have the highest standards of living in India. The survey is based on factors such as crime rate, air pollution and improved options for international and English-speaking educational institutes.

●     Emerging Startup Hub– Asa city that encourages enthusiastic entrepreneurs, Hyderabad is witnessing a support system to encourage startups. India’s biggest incubator for startups is in Hyderabad. On the overall the city is promising because of its stable environment and cooperation between the investors, startups and the government.

These are some of the reasons as to why Hyderabad is one of the fastest growing cities in India. It offers the perfect combination of a city immersed in history, and one that embraces development and modernization.

Chennai: The Next Real Estate Investment Hub

Chennai’s advancement over the past decade as an industrial hub with the rise of various manufacturing industries has led to the development of a lively real estate market in the city. As per the Mercer Survey 2017 Quality of Living Index, which compares all major cities of India, the one city that has made improvement is Chennai. Once considered a less significant investment opportunity in India, Chennai has steadily emerged as a real estate hub to be reckoned with.

If you’ve been sceptical about investing in Chennai, here are some reasons which could make you reconsider:

Safest City in India:

Chennai has been assessed as one of the safest cities in India, jumping ahead of metros like Bangalore, Hyderabad and Pune. The Mercer Survey finds Chennai to be the safest Indian city with a global rank of 113. Chennai achieved this, based on points for internal stability, lower crime levels and efficient and capable local law enforcement. These factors would go a long way in influencing a potential real estate investor looking to enter a new territory.

Booming Business and Industry Sectors:

Sectors such as IT, the automotive industry and electronic manufacturing industry in Chennai have been constantly growing. Many companies have been investing in the city, which has given rise to employment opportunities, good connectivity and an abundance of housing options. Back in 2013, commercial offices had occupied spaces around 4 million square feet. Most of these occupants were IT/ITES companies that employed around 4.5 lakh people. Four years later, the growth has only been exponential.

Public Transport:

Chennai offers a variety of public transport systems for commuters, making it easy and fast to reach destinations. These diverse transportation systems include the Chennai Metro Rail, Chennai Mass Rapid Transit System, buses, taxis, rickshaws, etc. The government has been making efforts to improve its bus services and routes to ensure hassle free commutes. Also, in a country like India where women’s safety is a huge concern, Chennai is a city which offers safe commute to all.

An efficient and modern transport infrastructure makes any city a preferred choice for investors. With its long-term investment in developing urban transport, Chennai is now a much sought-after investment with long-term potential.

Education and Health Care:

Chennai is known to be one of the best destinations in terms of education in India. There are well reputed educational institutions such as NIFT, IIT and Loyola College. Known to be the ‘Health Capital of India’, Chennai has access to the best health care and medical facilities. Examples of such health care centres are Apollo Hospital, Fortis Malar Hospital, etc., marking Chennai for its quality of life.

As you can see from the above points, with abundant opportunities and thriving development, Chennai has a very bright future as an investment hub.

At House of Hiranandani, Chennai has been an area of focus for a while now. With a number of important developments, like our world class projects on the Old Mahabalipuram Road in Egattur, we have ticked all the boxes for location, luxury offerings and connectivity. In fact, one of our projects at the OMR - the Anchorage - is designed to be the tallest building in Chennai. As a company, we are committed in our focus to develop world-class housing projects in the city of Chennai.

Why Bengaluru Could Be The Indian City Of The Future

According to Knight Frank’s 11^th edition of The Wealth Report 2017, Bengaluru is among the top seven hotspots around the world that present exciting opportunities for private property investors in 2017 and beyond.

In another survey - Jones Lang LaSalle's fourth annual City Momentum Index of cities around the world – Bengaluru is placed right at the top of the World’s Most Dynamic Cities, beating out the likes of Shanghai, London, Dubai, New York and even Silicon Valley in the US. This index tracks the speed of change of a city's economy and commercial real estate market. It covers 134 major established and emerging business hubs and identifies cities that have the potential to maintain the greatest dynamism over the short and long term.

According to Jones Lang LaSalle, "Most dynamic cities share the ability to embrace technological change, absorb rapid population growth and strengthen global connectivity.”

The Passport Cities Database projects that Bengaluru will be one of the three Indian cities to record the fastest rate of real GDP growth over 2016-2030, making the future of the former ‘Garden City’ look very rosy indeed.

With an eye on the future, House OfHiranandani has already been steadily developing a diversified portfolio of properties in Bengaluru. In case you haven’t seen them yet, have a look at these impressive video vignettes of the well planned developments in Devanahalli, Hebbal and Bannerghatta.  Also, this video explains why we continue to push for growth in South India.

Bengaluru’s success can be attributed to three major factors:

One, known as the ‘Silicon Valley Of India’, it has attracted some of the brightest and most ambitious scientific and technological minds from around the world.

Two, government involvement seems to have worked to Bengaluru’s advantage. Here, the government has, over time, promoted investments in the city and developed a positive relationship with business and industry. There are a number of government initiatives that are bound to further enhance Bengaluru’s reputation as a city with an eye on infrastructure development: the proposed Mumbai-Bengaluru Industrial Corridor, the under-development NICE expressway that will connect the city to Karnataka and Mysore, and the expansion of the Namma Metro system.

Thirdly, Bengaluru, with its high standard of living and ease of doing business, has been steadily attracting some of India’s wealthiest individuals. According to ET Realty, “the city has 220 Ultra High Net Worth individuals, a number which has grown by 15% in the last one year.”

Many decades ago, India’s first Prime Minister Jawaharlal Nehru had predicted that the then-sleepy Garden City would be India’s ‘City Of The Future’. Now, with Bengaluru being declared ‘The Most Livable City in India’ in 2012 and with its most recent accolades, it would seem like our esteemed late Prime Minister’s prediction might be truer than we could have imagined. 

Follow Passion, Find Success

Looking back at my journey, though I had initially started my training in the medical field, destiny led me towards architecture which in turn is what I am today.

In those days (1980s), land was easily available on deferred payment wherein you could put up your signage, start selling and use that money to get approvals and then start constructing. Our first bad experience with one of the initial land proposals that came our way, is where we got to learn of the risks involved in starting anew. Nevertheless we took that risk and started our first project in Versova at a rate of Rs.241 per sq ft.

Since we were always short of capital, we believed in purchasing something that could be available on the above terms and then launch it.  Later we bought this land in Powai where there were multiple land owners which added to the risks though but we still went for it, Powai being a big challenge.  Slowly we assembled this into a large land parcel and started selling it at Rs 450 per sq ft in 1986. In the initial years, we suffered losses in Powai, but the continuous thought in mind that we would definitely profit in the next phase made us accomplish a lot of land in the interim. Post this we started aggregating land in Thane.

I have always done only architecture and construction. Legal, accounting and liaising have been necessary evils. We are better known for our engineering function rather than finance circles as we have never raised money. People who have worked for us always get promoted faster when they go elsewhere. We had huge training programs set up by Anthony Remedios, a Goan [architect] who was passionate about design and architecture.  

For me, at the end of the day, I want my business to be about creativity of design rather than creativity of financing.

Following my passion, I can feel the rewards.

Budget 2017: A Push for Reform

As business leaders, the annual budget is always an occasion we await with a mix of optimism and trepidation. This year’s budget, presented by Finance Minister Mr. Arun Jaitley was a welcome push for stability and calculated, measured growth.

A positive outlook overall

I would call this year’s budget a ‘reform oriented budget’ where the expenditure is focused on economic growth and development, especially in the rural areas. It also reflects the government’s intention to improve the investment climate with a view to stimulate growth. The massive push for improvement in infrastructure -  including record capital expenditure for roads and railways  - will indirectly benefit the real estate sector in the long run.

A step In the right direction

Another positive initiative is the move to grant infrastructure status to affordable housing as it will act as a catalyst to the government's vision of Housing for All by 2022. This will lead to higher participation by private players in this segment as they can have access to institutional funding and other government subsidies. Along with tax rebates for the salaried class which will lead to higher disposable income and interest subventions, this can be a potential winner in the long run.

A suggestion: the government should redefine affordable housing clearly, keeping in view the different geographies in India.

Similarly, the decision to increase the qualifying unit area for affordable housing from built up area to carpet area will lead to an increase of around 20% per unit for the end user. Also, increasing the time frame for completion to 5 years indicates that the government acknowledges the practical and operational difficulties faced by developers in this category.

Sound Policy

The decision to tax capital gains on Joint Development Agreement upon completion of the project is a significant move. However, more clarity is required to avoid litigation which is bound to happen given the current ambiguity. The tax break of 1 year post receipt of the completion certificate, for the unsold stock, and reduction of long term capital gains to two years will provide respite to investors and developers alike.

Looking To The Future

While these initiatives are noteworthy we need to remember that Deregulation will be the key to the success of various government initiatives. A major impediment to real estate development in India remains the approval process. While the government has done a lot to ease the functioning of the real estate sector and protect the consumers, it must get the statutory authorities responsible for clearing the projects within the purview of law.

The other major concern remains that corporate taxes and dividend distribution tax remains the highest in the world. We hope this is addressed in the future to attract more investments in the corporate sector.

Here’s looking forward to a prosperous and stable 2017 for India and our industry.