Kanakia Spaces Realty Signs ₹208 Crore Deal For Redevelopment Of Two Buildings In Borivali

Under Maharashtra's cluster redevelopment program, the housing societies in Borivali, Mumbai, that are over 50 years old, will be redeveloped.

The Borivali neighborhood of Mumbai's Kanakia Spaces Realty Pvt Ltd has obtained the development rights for two historic structures. Based on property registration records that CRE Matrix was able to access, the two development agreements (DA) had an agreement value of ₹208.53 crore.
 

Insights Of The Redevelopment Program

According to the records, the two housing societies that are older than 50 years old are in the Borivali, Mumbai, Govind Nagar neighborhood, and they will be redeveloped in accordance with the Maharashtra government's cluster redevelopment program. The transaction was registered on September 12, 2024, and ₹11.40 crore in stamp duty was paid.

The first structure is called Shree Mohan Chs Ltd, and it occupies 2.02 acres with 70,616 square feet for its occupants. This will receive an additional 36% of the refurbished building's roughly 96,038 RERA carpet area, and each apartment will have a single parking space.

Inhabitants of a second building called Shree Balwant Chs Ltd, which is situated across 1.31 acres, will receive 45% more space than the current 55,869 carpet area in addition to 51 parking spaces. For the duration of the renovation, residents in both of the older buildings would get a monthly rate of ₹60 per square foot.

According to the development agreement, the developer will renovate the existing buildings in 36 months, finish the project (saleable component), and get the full occupation certificate (OC) in 66 months.

What Is The Term Redevelopment?
 

Several old property in Mumbai and other parts of Maharashtra are presently undergoing development, particularly those with two to seven stories. Redevelopment of housing complexes entails demolishing the existing buildings and erecting a larger, more contemporary one in accordance with regulations.

In the redevelopment approach, the homeowners who live in these historic properties sign a development agreement with a developer.
Following reconstruction, the developer guarantees each apartment owner additional space. In return, the developer is allowed to construct more residences that will fetch a higher price on the open market by using the plot's remaining unused Floor Space Index (FSI).

For better understanding, let’s take an example: if a five-story building contains 50 apartments, each measuring 450 square feet, the developer will enter into contracts with the 50 owners promising to provide them with a 500 square foot apartment in the newly constructed structure. As an alternative, the developer might build 100 500 square foot apartments, of which he would then sell 50 to the owners and turn a profit on.
 

What Is Cluster Redevelopment?
 

A cluster redevelopment policy refers to the merging of multiple buildings or plots into a single project that is redeveloped as a whole. In accordance with this, the Maharashtra government grants developers a number of concessions, including an increased floor space index (FSI), in exchange for their maintenance of Mumbai's historic structures.

The Maharashtra government also announced in May 2023 that real estate developers would be eligible to waive up to 50% of the premium for a year under its Mumbai cluster development strategy. This initiative is anticipated to support the city's historic building rehabilitation.
 

Other Redevelopment Deals In Mumbai Real Estate Market
 

Listed real estate developer Macrotech, which trades under the Lodha Group brand name, had in October 2023 inked a development agreement for development in the free sale component of a slum rehabilitation project in Mumbai’s Worli neighborhood. The deal's overall agreement market value is ₹359.48 crore, per documentation that the real estate data analytics company CRE Matrix was able to get.

Numerous other developers, including Puravankara, Ajmera, Rustomjee Group, and MICL, are redeveloping a number of historic structures in Mumbai.
 

Conclusion
 

The ₹208 crore agreement signed by Kanakia Spaces Realty for the renovation of two Borivali buildings is a major turning point in Mumbai's real estate market. This effort not only aims to boost the living standards of the local community but also represents the growing need for new launch projects in Mumbai. Such redevelopment initiatives are essential for alleviating housing shortages and enhancing urban infrastructure as Mumbai continues to change. Residents may look forward to a rejuvenated environment that strikes a balance between modern life and the city's rich cultural past thanks to Kanakia's dedication to quality and innovation.

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