Land Prices Will Come Down In Hyd If TG Govt Puts FSI Cap: Sumadhura CMD

If Telangana govt imposes FSI cap, nothing happens. However, FSI cap is good for some developers. At the same time, it is bad for some developers - G Madhusudhan, CMD, Sumadhura Group, tells Bizz Buzz

Hyderabad: Land prices will come down in Hyderabad if the Telangana government removes unlimited Floor Space Index (FSI) and imposes a cap on it, according to G Madhusudhan, Chairman and Managing Director, Sumadhura Group.

“Average FAR (Floor Area Ratio) is three to four across India. If (Telangana) government imposes a FAR cap, nothing happens. Land prices will come down a little,” the Sumadhura CMD told Bizz Buzz recently.

According to him, FSI cap is good for some developers. “Also, it is bad for some developers. For those who bought (land) at higher prices, what will be their situation? For instance, some people bought land at Rs100 crore per acre in the Neopolis area. What happens to them if FSI restrictions are imposed? We can’t simply say it’s good or bad,” he explained.

He said that some developers are building five lakh square feet on one acre of land in Hyderabad. This works out to be an FSI of 11.5. “No, it is not a bad kind of thing. Before allowing that kind of FAR, we need to build strong infrastructure. We need to focus on roads, water supply, etc. After building the infrastructure, the government can give that,” he said.

Sumadhura Group, whose operations spread across residential, commercial, warehousing and plotted development, has presence both in Hyderabad and Bengaluru. The realty group executed nearly 50 projects including several luxury residential projects. However, it executed more projects in Bengaluru where it will soon enter plotted development space as well. While FSI cap is there across all major cities in India, Hyderabad is the only city which offers unlimited FSI.

“In Bengaluru, FAR cap is pegged at 3 per cent. We can increase it by 60 per cent to 4.8 or up to 5 if we pay additional charges,” he said. According to him, the Telangana government is also collecting impact fees of Rs75 to Rs100 per sft for floors higher than 15. He further said with the unlimited FSI, the Hyderabad real estate has been growing for the past several years.

“Here, we are maintaining a setback of 20 metres. In developed cities like Hong Kong, there are no setback rules. If suitable infrastructure is built, it’s okay,” he said, underlining the need for robust infrastructure in Hyderabad.

What is Floor Space Index?

Floor Space Index (FSI) is the ratio of the total built-up area to that of the total area of the land parcel or plot on which it has been built. In some areas, this is also called Floor Area Ratio (FAR). To arrive at this ratio, the total floor space of the building is divided by the size of the plot. For instance, if a building has a built-up space (all floors put together) of 87,120 square feet and the plot on which it has been constructed is one acre (43,560 sft) in size, the FSI ratio works out to two.

The ratio has been calculated by dividing 87,120 sft (building size) by 43,560 sft (land size). FSI limit is essential for a planned and healthy development of a city or an urban area. It also regulates population and construction density. In India, most major cities like Mumbai, Bengaluru, Kolkata and New Delhi have FSI limits. But sadly, Hyderabad is the only major Indian city that offers unlimited FSI. Consequently, some developers are not even batting an eyelid to build 10 lakh sft in one acre of land while it’s ideal to construct one lakh sft in that space.