More than 15 projects have availed it in recent times
CHENNAI: Initial reluctance and uncertain market conditions that held back builders from availing premium floor space index (FSI) have given way to enthusiastic response. More than 15 projects have availed it in recent times, reflecting the optimism in the real estate market and profitability in availing premium FSI.
These include residential and commercial projects and are spread evenly over the city and suburbs. Their location ranges from T.Nagar to Sholinganalur, indicating an all-round demand for premium FSI.
“The spurt in applications reflects the huge demand for housing within city limits and indicates that the viability factor is good,” says T. Chitty Babu, president, CREDAI – Tamil Nadu.
Premium FSI allows developers to build more than what is normally permissible in an area for a fee and the extent of additional buildable area will be determined by the road width. Charges for availing it will be levied based on the guideline of the land required. FSI determines the maximum buildable area in a given plot.
“For example, where the permissible FSI is 1.5, for additional one square foot of building, charges for 0.65 square foot of land will be collected.” explains C.H. Gopinath Rao, former national president, Institute of Valuers. “This is profitable since the charges are based only on the guideline value and not the market value of the land. If you have to buy the same extent of the land, one has to pay more, but through this scheme, it comes cheaper. However, in places where the guideline value is high, it would be less profitable.”
The premium FSI was not initially recommended by the Chennai Metropolitan Development Authority and did not find place in the draft Second Master Plan. However, it was later introduced and guidelines for availing it were issued in September 2009.
The premium FSI cannot be availed in the Redhills catchment area and areas of waterbodies maintained by the Chennai Metropolitan Water Supply and Sewerage Board for drinking water purpose.