Article from ET Realty
KOLKATA: Major city developers have rushed to the drawing board to plan suburban townships following a state urban development department notification that offers various concessions to such projects on land parcels of 50 acre or more.
“We were waiting for a policy on land in excess of the 24.2-acre ceiling. The new township policy has clearly outlined what needs to be done. This is a great opportunity for developers focused on affordable housing segment.We have begun evaluating opportunities towards Kalyani Expressway,” said Siddha Group managing director Sanjay Jain.
Apart from the minimum 50-acre stipulation, the policy states that 75% of the land must be used for residential units and rest can be developed commercially to set up markets, hospitals, schools, offices etc. Of the 75% earmarked for residential, a quarter has to be earmarked for houses for economically weaker sections (EWS) and another quarter for a socio economic activity like healthcare or sports infrastructure or any theme for that township. The remaining half of this pie can be used for MIG and HIG housing.
The policy allows a single party to procure land after procuring prior permission from the government or aggregation of land parcels by multiple land holders. It also allows purchase of land by a company with a declaration that no force was used to procure it. The policy also allows inclusion of vested land on long-term lease.
The state government itself plans to auction government land for development of such townships by private firms. “The state government has identified 447 acre for six theme-based townships in Kalyani, Bolpur, Dabgram, Asansol, Dumurjala and Baruipur. Tenders have already been floated for ‘Uttam City’ in Baruipur,” an urban department official said.
Merlin Group managing director Sushil Mohta, who is also the eastern region chairman of Confederation of Real Estate Developers Association of India (Credai), expects at least 10 developers to announce projects in line with the policy by mid-2016.
“Before the government came out with the policy, it had through Credai taken stock of developers that were really keen on such large projects. At the time, nearly 20 members had expressed interest. Half of them should be announcing something within six months,” said Mohta.
It was Credai that had initially mooted the proposal to catalyse growth in the housing sector that has been passing through a slump for three years now. While there is an oversupply in the premium housing segment, affordable housing is still in demand.
“This policy was essential to spur formated development in Rajarhat. At present, the growth is haphazard. Once a township is planned, infrastructure can be developed accordingly. I expect the city to grow beyond Rajarhat to the east, Bariupur to the south, Joka to the south-west, Howrah to the south and Belghoria Expressway to the north,” said Mohta.
Credai is also pushing for group housing projects on land parcels between 5 cre and 24 acre to give the industry and housing further impetus. “It is very difficult for an individual developer to consolidate 50 acres. The fund requirement to purchase the land will be huge. I hope government looks at group housing projects where mid-sized developers can also participate,” Mohta explained.