Even as we continue to discuss the acute shortage of industrial land in Mumbai, the fact remains that there are rather significant land parcels held by the MIDC along Mumbai’s Thane-Belapur Highway. The prices for plots on this stretch currently range from Rs. 5-8 crore/acre.
There has already been lot of commercial development on this tactically important highway, leading to a steady escalation in prices. Moreover, with the formal announcement of the international airport at Panvel and the ambitious infrastructure enhancements that will follow, the strategic value of this land will increase exponentially.
It sounds like an ideal solution for mid-sized commercial space developers who are looking for suitable land parcels for their projects. The problem is that the MIDC has restricted the use of this land, allowing plots to be taken up only by IT/ITES in an obvious effort to boost this particular industry.
While the upcoming Union Budget may extend the STPI sunset clause and its benefits to the Indian IT industry beyond March 2011, this provision now definitely has a limited shelf-life left. In the mid-to-long term, the only option for IT companies who wish to set up shop on the Thane-Belapur stretch is to launch IT SEzs – which unfortunately need to cover a minimum of 25 acres.
Paradoxically, this stretch also encompasses land parcels less than 25 acres in size, previously held by industries which since have shut down operations. There is a huge latent demand for these land parcels by developers. However, since these land parcels are not large enough to conform to IT SEZ parameters, their potential remains unexploited. In light of Mumbai’s legendary space crunch, this represents an illogical anomaly in the system.
One way around this hurdle would be for MIDC to consider permitting development models other than IT/ITeS as well, even if they decide to charge a higher premium on such developments. Permission to develop mixed-use projects on this important stretch of land would make optimal use of its real estate potential. All industries require workforce housing, which in turn require retail outlets and peripheral services. The location is also perfect for local offices of manufacturing companies.
In fact, such amendments to the current restrictions governing these sub-25 acre land parcels will eventually happen anyway. It is hard to ignore a number of such strategically located plots lying vacant because they cannot be utilized by a single industry vertical. The advantage that MIDC would have in amending the parameters now is that it would become instrumental in creating a holistic, locationally important new commercial SBD that would work out to be extremely cost-effective for real estate developers – and by default for end users.
By default, making these changes to the existing usage parameters governing these land parcels would apply downward pressure on the real estate prices of surrounding areas and create more employment opportunities for people living along the stretch from Thane to Nerul. It would prove to be a turning point for the development and overall prosperity of areas like Airoli, Rabale, Turbhe, Nerul, Juinagar and Sanpada.
With a little extrapolation based on known real estate growth patterns in Mumbai, the MIDC can ensure the formation of an entirely new real estate destination by allowing such developments to come in on this vital stretch along the Thane Belapur Highway.
The author, Pinkesh Teckwani, is Head-West India, JLLM
