K Raheja Corp to buy 350 units in Mumbai slum rehabilitation project for Rs 275 crore

February 14, 2023
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K Raheja Corp has agreed to buy 350 units in a building that is part of the free sale component of a slum development project in Mumbai for Rs 275 crore, registration documents showed.

The real estate developer will buy the units from MM Developer and Saroj Landmark Realty, who are undertaking the slum rehabilitation scheme in the Mumbai suburb of Wadala (on salt pan land) .

The units to be constructed will be utilised as permanent transit tenements under the slum rehabilitation agreement and entitles K Raheja Corp to load the floor space index (FSI) equivalent to 1.5 lakh square feet, which is the area of the sale building to be constructed.

The slum redevelopment project is scheduled to be completed by October 31, 2025. Excavation started in mid-January, while construction would start on February 1, the agreement documents showed. The documents have been accessed by businessline from data analytics firm CRE Matrix.

Payment for the transaction will be made in phases as and when the developers construct and hand over the units to K Raheja Corp. The documents show that the market value of the sale area is Rs 154 crore at the rate of Rs 1.04 lakh per square feet.

Many slum development projects have been stuck as developers who had agreed to construct them ran out of cash halfway. Moneyed realtors such as K Raheja Corp are stepping in to revive such projects and arrangements such as this one help the originally contracted developers with cashflows to complete the schemes.

Slum redevelopment projects in Mumbai, while providing better living space for those living in slum clusters, also give developers access and development rights to land that would otherwise not be available. It is freeing up land in the city where space is at a premium, due to its geographical location as well as rampant encroachment by unauthorised dwellings.

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