Sucheta Dalal :Cluster development faces many hurdles
Sucheta Dalal

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Cluster development faces many hurdles  

November 19, 2009


Cluster development and affordable housing projects are currently popular in the real-estate market. Most developers who made money by selling three- and four-bedroom flats earlier are now eyeing cluster development and affordable housing, as both segments are witnessing a surge in demand. Under cluster development rules in Mumbai, an old cessed building which has been constructed prior to 30 September 1969 and having a built-up area of up to 2,000 sq mt can be redeveloped; the floor space index for such development has been increased up to 4.
When the economy was just coming out of the slowdown in April and May 2009, many developers launched affordable housing projects. Tata Housing Development Company launched its ‘Shubh Griha’ homes in Mumbai while Unitech Ltd launched its ‘Uni Home’ apartments. Other developers joined the queue, since during the slowdown this was the only segment in demand and it was easy to get buyers for such projects.
Similarly, cluster development is another segment which is attracting developers, especially in Mumbai. However, Orbit Corporation Ltd, a major player in the redevelopment segment, feels that it is not easy to patch up pieces of plots adjacent to each other for cluster development of an area. “There are lot of facets to cluster development like handling tenants; taking consent from both landlords and tenants; making sure that all tenants are rehabilitated and providing temporary accommodations to erstwhile residents of the plots to be developed. A lot of work needs to be done before you start a project,” said Pujit Aggarwal, managing director, Orbit Corporation.
Orbit will be handling development projects in various parts of Mumbai—at Mazgaon, Sewri, Parel, Lower Parel, Elphinstone Road, Lalbagh, Dadar, Churchgate, Malabar Hill and Napean Sea Road. Orbit has already submitted a few proposals to the concerned authorities. The developer feels that in the next two-three years, the necessary permits will be in place for cluster development in these areas.
The Municipal Corporation of Greater Mumbai (MCGM) has created a special team headed by the municipal commissioner and comprising representatives of the MCGM, the State government and the traffic police, for granting cluster development approvals. Between May and September 2009, the panel had cleared 22 proposals.
Mr Aggarwal also told Moneylife that cluster development consumes more time than normal redevelopment. Usually a redevelopment project takes three to five years, but a complex project like cluster development will take approximately four to seven years for completion. This means that one can expect the 22 projects cleared by the panel in September 2009 to be ready only by 2015, provided the real-estate sector does not suffer any major setback in the intervening period.
Pallabika Ganguly [email protected]

-- Sucheta Dalal