₹143-crore deal: Mahindra Lifespaces to redevelop nine Chembur buildings

Mahindra Lifespaces Developers has entered into a development agreement with Twinkle Star Co-operative Housing Society for the redevelopment of a 2.8-acre property in Chembur, Mumbai, in a project that will replace nine existing buildings and provide larger homes to 133 society members.

The development agreement, covering 11,241.7 sq m of land across Ghatla Village Road in Chembur, carries a consideration value of ₹142.72 crore, while the stamp duty payable on the agreement is ₹7.23 crore. The property comprises three parcels in Borla measuring 6,548 sq m and four parcels in Chembur measuring 4,693.7 sq m, showed property documents accessed by CRE Matrix.

Existing homes to get substantially larger

The redevelopment is significant for the 133 existing members of Twinkle Star society.

The nine existing buildings currently have a combined carpet area of 78,686 sq ft, according to the stamp adjudication documents. Under the proposed redevelopment, members will receive a combined 1,20,389.58 sq ft of new carpet area. That translates into an increase of about 53% in the total residential carpet area available to existing members.

On a simple average, the existing carpet area works out to around 592 sq ft per member, while the proposed new carpet area would average roughly 905 sq ft per member.

In other words, a member currently occupying a home of around 600 sq ft could, on an average basis, receive a replacement home closer to 900 sq ft. The actual entitlement, however, would depend on the individual member’s agreement and the project’s allotment terms.

What members are getting

The agreement provides for new premises for all 133 existing members, along with 133 reserved car parking spaces and 14 visitor parking spaces. The redevelopment is to be completed within 60 months.

The documents also showed a range of financial and relocation benefits for existing members.

These include monthly displacement compensation that rises from ₹100 per sq ft in the first year to ₹140 per sq ft in the fifth year, along with hardship/corpus payments and other redevelopment-related compensation.

The stamp-adjudication documents specifically record a ₹2,000-per-sq-ft hardship allowance/corpus, an additional corpus of ₹500 per sq ft, an additional amalgamation/subdivision corpus of ₹200 per sq ft, relocation costs of ₹100 per sq ft and brokerage charges of ₹200 per sq ft.

A ₹142.7-crore redevelopment agreement

The Maharashtra stamp authorities have recorded the property’s market value at approximately ₹104.41 crore, while the consideration under the development agreement is ₹142.72 crore. Stamp duty of ₹7.2261 crore was assessed on the agreement.

The documents also show that Mahindra Lifespaces is required to provide a ₹30-crore bank guarantee to the society under the development arrangement.

Why the deal matters for Chembur

For Mahindra Lifespaces, the deal gives it access to a sizeable redevelopment parcel in an established Mumbai suburb rather than relying solely on greenfield land acquisitions.

The documents indicate a maximum FSI of around 3.0, including the applicable fungible component, for the redevelopment framework considered for the property.

The bigger redevelopment trend

The Chembur agreement is another example of how Mumbai’s redevelopment market is creating development opportunities on already-built-up land.

For developers, redevelopment allows them to enter established neighbourhoods where acquiring a large vacant parcel can be difficult or prohibitively expensive. For residents, the attraction is the possibility of replacing ageing buildings with newer homes while retaining their location and receiving additional carpet area and other benefits.

But redevelopment also comes with a long execution timeline. In this case, the agreement provides for completion within 60 months, meaning members could face a multi-year transition before receiving their new homes.