Sunday, July 14, 2024

Sabarmati Riverfront Plots Development Rights Offered at Reduced Costs

The Sabarmati Riverfront Development Corporation Ltd (SRFDCL) has announced the leasing of space along the Sabarmati Riverfront at a rate of Rs 23,000 per sq m for development purposes. In a surprising move, the Ahmedabad Municipal Corporation (AMC) has decided to offer development rights for these riverfront plots at significantly lower rates compared to various areas in western Ahmedabad, including recent plots sold by the AMC.

This decision has raised eyebrows, especially considering that the Prahladnagar Multilevel Parking Complex plot was evaluated at Rs 4.03 lakh per sq m last year, and a plot on the western part of the Sabarmati Riverfront at Vallabh Sadan was assessed at Rs 3.08 lakh per sq m. Despite this, the AMC is gearing up to sell development rights for the much-coveted riverfront plots at just Rs 22,647 per sq m.

It is essential to note that when the AMC-owned SRFDCL sells development rights, it does not mean selling ownership. Instead, it implies granting permission to develop the land according to specific guidelines, such as building type, height, number of floors, design, and use for a fixed number of years.

The SRFDCL has earmarked 1.75 lakh sq m of riverfront land, valued at Rs 4,982.7 crore, primarily for the commercial sale of development rights. The corporation plans to sell development rights through both long- and short-term leases. The average cost of development rights for plots on the west bank is Rs 23,676 per sq m, while it is higher on the east bank at Rs 24,750 per sq m. This approach opens up the opportunity for developers to acquire land at a lower cost for constructing offices or houses with a riverfront view.

Another noteworthy change in the Sabarmati Riverfront Land Disposal Policy 2024 is the revision of value zones, reducing them from eight to seven. The period for long- and short-term leases is yet to be finalized, with opinions suggesting short-term leases may extend between 15 to 35 years.

Despite the overall upward trend in the city’s land market in recent years, this case along the riverfront presents a curious scenario of deflation, with a noticeable decrease in land costs compared to previous estimates in 2016.

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