mpany executive.
HCC Real Estate Ltd, a subsidiary of infrastructure firm HCC Ltd, is planning two slum projects in the city—a 50-acre land in suburban Mumbai and a 1 million sq. ft development near the Indian Institute of Technology, Powai campus, the firm’s president, Rajgopal Nogja, said.
“The reasons are simple. Entry capital is cheaper, cost of clear land is way too steep in Mumbai, and returns are better in such projects,” said Ramesh Jogani, managing director and chief executive (CEO) of Indiareit Fund Advisors Pvt. Ltd, a private equity fund promoted by Piramal Group. Indiareit is close to investing Rs20-30 crore in two slum redevelopment projects in the city.
The Maharashtra government has paced up clearances and slum projects stuck during the economic crisis are being revived. Around 450 slum projects are going on in Mumbai, involving 250,000 homes. The Union and state governments are aiming for a slum-free Mumbai by 2015.
“There is a clutch of new developers who are sending in proposals for slum projects, particularly after the floor space index (FSI) was raised to 3, from 2.5 in such ventures last year,” said S.S. Zhende, CEO of the Slum Rehabilitation Authority (SRA). With higher FSIs, firms get additional construction rights for development.
Zhende also credits the high-power committee formed last year to settle disputes between slum developers and authorities for making the projects more attractive to developers.
“It has become easier to get into slum projects now because the SRA has been proactive and the requirements are not so rigid any more,” said Lalit Kumar Jain, chairman of Pune-based Kumar Builders.
The firm, which is also set for an IPO this year, has a large slum project in Pune and is looking to enter the Mumbai market as well.