The Mumbai Metropolitan Region Development Authority (MMRDA) plans to lease seven plots in Bandra-Kurla Complex (BKC) to raise approximately INR 5,497 crore for infrastructure projects. The plots, spread across commercial and residential uses, have reserve prices of INR 3.4 lakh and INR 3.5 lakh per square metre, respectively. Estimated revenues include INR 3,657 crore from commercial leases and INR 2,290 crore from residential ones. This initiative aims to support Mumbai's infrastructure amidst financial challenges, including a projected INR 75,000 crore cost for Metro projects. MMRDA's leasing strategy reflects its commitment to enhancing urban development and economic growth.
The Mumbai Metropolitan Region Development Authority (MMRDA) is taking significant steps to enhance its funding for future infrastructure projects by leasing seven land plots in the Bandra-Kurla Complex (BKC). This move aims to generate approximately INR 5,497 crore to support the city's growing infrastructure needs.
Out of the seven plots, three will be used for residential development while four will be for commercial use. The leases are set to last for 80 years, with the reserve price for commercial plots at INR 3.4 lakh per square metre and residential plots priced slightly higher at INR 3.5 lakh per square metre. The area for the various plots varies, with commercial plots measuring between 4,956 square metres and 8,412 square metres, and residential plots ranging from 4,974 square metres to 5,876 square metres.
These plots are located in G Block of BKC, which holds a floor space index (FSI) of 4, allowing for significant development potential. MMRDA estimates that leasing these plots could bring in around INR 3,657 crore from commercial use and approximately INR 2,290 crore from residential leases. This revenue is crucial as the MMRDA aims to raise a total close to INR 5,947 crore through this initiative.
The Bandra-Kurla Complex is recognised as a prime location for both commercial and residential developments. By monetising these plots, MMRDA plans to reinvest the money into critical infrastructure projects across Mumbai, especially in transportation and urban development. This funding strategy is essential as the authority faces a budget constraint due to large infrastructure projects underway in the city.
In recent years, MMRDA has faced financial challenges, with a projected cumulative cost of 10 Metro projects, excluding Metro 3 and Metro 1, estimated at around INR 75,000 crore. The authority's total receipts for the fiscal year 2024-25 are expected to be INR 39,453 crore, against total expenditures of approximately INR 46,921 crore. To address funding shortages, the MMRDA has been exploring various revenue-generating opportunities, including the lease of valuable land and the monetization of its existing assets.
The MMRDA is limited in its ability to generate revenues through taxes. As a result, the focus has shifted to leveraging land deals. Recently, the authority received approval to raise INR 50,000 crore through bonds to financing infrastructure projects within the city and its surroundings. This financial buffer is crucial in case anticipated revenue streams fall short due to delays or unforeseen challenges associated with ongoing projects.
In a significant step for foreign investment, the MMRDA successfully tendered commercial plots in BKC last year, awarding them to a Japanese corporation for INR 2,067 crore. This deal marked one of the highest levels of foreign direct investments in India's real estate sector for 2022-23 and highlights the growing interest in Mumbai's commercial real estate.
As the city continues to expand, the leasing of land in the BKC will play a vital role in funding necessary infrastructure upgrades that will support Mumbai's development. This approach will not only enhance local services but also stimulate economic growth, making Mumbai a more attractive place for both residents and businesses.
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