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High-rises Floor Mumbaikars, Delhi Grounded in Realty

Economic Times - 19 June, 2014

When Ajay Jajodia decided to move higher after having lived in his first floor apartment in South Mumbai for 30 years, he found out that just about everybody in the city wanted a top floor home, preferably with a sea view, and was ready to pay a hefty premium for it.

Jajodia and other Mumbaikars would be surprised that higher floors do not have quite the same attraction for people in other metros across the country . This is the case not just in Delhi, where residents face water scarcity and are mindful of earthquake-prone zones, but also in Bangalore and even Chennai, which has a long coastline.

Jajodia zeroed in on a duplex penthouse on the 18th floor of a plush housing society in Goregaon, after searching almost all the under construction apartments from Cuffe Parade to Borivali. "Living on the top floor has its own charm.

We have a beautiful view of the lush green Aarey colony on one side and the Western Express Highway on the other - a view which can never be blocked," says the 43-year-old entrepreneur. To savour this view, Jajodia paid a hefty floor rise charge along with a 50% premium for the open terrace.

Mumbai is India's high-rise capital since land is scarce and expensive, and the only scope for expansion is up in the sky. Complexes with less than 10 floors mostly attract buyers on a budget and many of them prefer lower floors due to the cost factor.

"These high-rise buildings offer breathtaking views, privacy and better ventilation," said Surjit Singh, president-marketing, RNA Corp. Developers say high-rise apartments also give a sense of space since Mumbai is more congested than, say , Delhi.

Buyers are ready to pay a premium for the apartments on higher floors which are cut off from the street traffic and noise, said Rohit Gera, managing director of Gera Developments. This has encouraged developers to charge preferential location charge (PLC) and floor rise charge for higher floors in Mumbai. Another factor which adds to the premium is the cost of construction of the building that increases with height.

Unlike in Mumbai where developers charge a premium of Rs 50-500 per sq ft for the higher floors, in tier-II and tier-III towns such as Kolhapur and Nagpur in the state, they charge a premium for the lower floors due to higher demand. "People in smaller towns in Maharashtra are not willing to live on the higher floors. While we charge a premium of Rs 100-200 per sq ft for apartments on lower floors, the higher floor apartments have no premium," said Sunil Mantri, chairman, Mantri Realty. According to realty portal Commonfloor.com, on average 68% of urban Indians prefer the lower three floors in an apartment complex with less than 10 floors while 48% prefer the middle floors, that is fourth to tenth floor, in an apartment with more than 10 floors.

Experts say Delhiites have an affinity with lower floor apartments more for psychological reasons. "Delhi does not have an apartment culture. One of the main reasons is the psyche of the buyers, who always prefer to have their feet on the ground," said Anuja Sinha, director of real estate brokerage firm Brick and Mortar. Since Delhi experiences higher seismic activity , it is more prone to earthquakes apart, Sinha said, adding that it was also natural for buyers to factor in issues such as water and power scarcity while opting for a lower floor apartment.

Owing to the demand, developers charge a 5-10% premium for the apartments on lower floors. According to realtors, an apartment on a higher floor would command 10-12% lesser resale value. divya.s@timesmail.com

 

 

Economic Times, 19 June, 2014, pg 16

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