Recent Land related issues in NCR impacting Real Estate
Recently there have been certain land related issues in NCR/Delhi region which includes Noida mixed-use land policy change, increase of FAR for residential in Noida, Delhi-Gurgaon toll plaza, land pooling policy and increase in FAR for hotels in Delhi which will impact the real estate in near term and long term.
On 12th February, 2014, Noida authority has approved mixed-use land policy. Now commercial activities like retail shops, offices, entertainment outlets, clinics, banks, ATMs and eateries are permitted in residential sectors along the 24m ROW (right of way) roads. The authority has already approved mixed use policy in industrial and institutional areas in December. But it is mandatory to provide 3 ECS (Equivalent car space) or parking spaces for every 100 sq mt as per the commercial parking regulations.
Also Noida authority is set to change the building bye-laws for residential sectors. According to present building regulations, plots up to the size of 4000 sq mt have FAR of 150 and 100 depending upon the plot size and minimum FAR to be achieved for approval of the building is 50% of permissible. But after changing the bye-laws, the minimum FAR to be achieved for approval will be 100%. There are many negative impacts of the change in bye-law. The development authority is willing to do this so that all the vacant plots present in the city will not be misused. But residents, investors and builders are now forced to achieve the full FAR. This may accelerate the construction activity on Noida resulting in increased supply.
On another front, NHAI, IDFC and DGSCL have finally agreed that the Delhi-Gurgaon border toll plaza will go after the highway ministry issues toll notification, leaving Kherki Dhaula plaza in operation on the stretch. As per the agreement between IDFC and DGSCL, the lenders should pay about Rs 9.65Cr and another Rs 3.85Cr to DSGCL for all the liabilities of the project which includes vendor liabilities and severance package to employees. The bankers will also pay around Rs 16Cr as dues to NHAI and MCD. This will bring relief to commuters.
Recently DDA (Delhi Development Authority) has approved the land pooling policy to develop and bring out the full potential of housing and infrastructure to reduce the load on the existing saturated areas in Delhi. DDA is also granting Rs 10 Cr annual budget for land pooling. DDA has identified around 200 villages out of which 95 villages will be converted into development areas and 88 villages into urban villages. The land pooling policy will impact the land prices in NCR. The price of lands in the outskirts of the city is increasing, more near the Najafgarh drain, Mehrauli, Bijwasan and Chattarpur. While Gurgaon, Greater Noida and Ghaziabad are about to witness a fall because, many developers will prefer to buy lands which are in Delhi and developed by DDA, but it will take up to 3-4 years of time for the change. Recently DTC had requested DDA for land to shift the millennium depot situated at Yamuna river bed. DDA has expressed the inability before high court in providing land to DTC. This shows that there is a high scarcity of land in Delhi. Land pooling will help the government in developing land and using it.
In another development DDA (Delhi Development Authority) has decided to increase the FAR (floor area ratio) by 66% of the hotels along roads with minimum ROW (right of way) 30 meter. For the hotels along roads with ROW less than 30 meter, it has been decided that FAR will be increased by 44%. This change in bye-law will not be applicable in the areas with heritage restrictions like Lutyens Delhi. According to present bye-laws, the FAR of hotels is 225 which will increase to 375 and 325. Delhi Development Authority took this step to increase the total number of rooms in the existing hotels. Hotels are expected to use this policy change and build with utilizing full FAR.
