Developers in Mumbai could build more offices and homes in the city and its suburbs due to a proposed increase in floor area ratio or floor space index (FSI), according to a draft development plan by Brihanmumbai Municipal Corporation (BMC).
The BMC has proposed to increase FSI for residential properties from 1.33 in Mumbai and one in the suburbs to two. Extra FSI has to be bought from the government.
The biggest increase is in the FSI for commercial property, which is proposed to be five. “We need to pay a premium to get the additional FSI. It has to make economic sense to buy it and build,” said Vinod Rohira, managing director and chief executive, commercial real estate, K Raheja Corp.
Rohira said, “The BMC wants developers to build more offices and create more jobs. But it does not want builders to build presidential skyscrapers in the interest of buyers.”
Ashutosh Limaye, head of research at JLL, said developers needed to weigh costs and benefits of building offices.
What is floor area ratio?
Floor area ratio or floor space index (FSI) is the relationship between the total amount of usable floor area that a building has, or has been permitted for the building, and the total area of the plot on which the building stands. This ratio is determined by dividing the total, or gross, floor area of the building by the gross area of the plot.
The FSI of a 1,000-square-foot building with one storey situated on a 4,000-square-foot plot would be 0.25. A two-storey building on the same plot, where each floor was 500 square feet, would have the same FSI value.
Credits Business Standard