Mumbai Bets On A Realty Cheque

It’s an initiative that could lead to a facelift for Malabar Hill, Mumbai’s toniest address, as well as Nariman Point and other areas in South Mumbai. The city collector has proposed to free government-owned land, which is currently locked in lease agreements, by selling it at market rates.

However, a section of the state administration feels that conditions in the realty market may upset the government’s dreams of generating several thousand crores of rupees by selling these properties.

The Maharashtra government is sitting on vast tracts of land in one of the most expensive real estate markets in the country. These properties, in many cases, have become a liability for the state, since it earns paltry revenue from them. Most of these properties are locked in lease agreements.

“We earn around Rs 20 crore from 955 land leases in Cuffe Parade and Churchgate and Rs 25 crore from Backbay Reclamation and Nariman Point. Most of these lease agreements are over. Instead of renewing them, we would want the government to consider outright sale of these properties,” Mumbai district collector IA Kundan said.

Of the 955 land lease agreements in Cuffe Parade, Churchgate and Marine Drive, 458 agreements ended long ago. In the Backbay area, where the business district of Nariman Point is located, more than half of the 316 lease agreements have expired. Some of these agreements were signed for 99 years. “The rent the state government receives from these properties is ridiculously low,” Ms Kundan said.

The Maharashtra government had, in 1999, proposed to free itself from these lease agreements, but its plan to sell the properties landed in court. Now the issue has been settled, and the revenue ministry has asked the city collector to put up a formal proposal to sell the leased properties. “Accordingly, we have submitted our plan. This will now be discussed by the state cabinet,” she said.

One Comment

  1. Posted October 20, 2008 at 4:38 am | Permalink

    The prices of up-market residential localities in big metros have witnessed a 20-25% rise in the last four months. Markets such as Greater Kailash I & II, Jorbagh, Golf Links, Amrita Shergil Marg, Sunder Nagar, Vasant Vihar and Shanti Niketan in Delhi, Napean Sea Road, Peddar Road, Breach Candy, Malabar Hills in Mumbai and Richmond Town, Lavelle Road, Cunningham Road in Bangalore have a witnessed a spurt in prices. In Mumbai, the prices in posh areas such as Altamount Road, Napean Sea Road, Nariman Point and Churchgate have gone up by 20-25%. But South Delhi is leading, the market quoted prices as high as Rs 5 lakh to Rs 10 lakh per sq yard. Mr.Vikram Sabharwal, MD of SABH Infrastructure, said, “The prime localities in South Delhi are commanding a huge premium as there is virtually no land available in these posh areas. There is hardly any construction activity taking place. The only activity seen is in large villas being converted into luxury apartments. This has further jacked up demand and the corresponding prices.”For more view-

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