A rumour that the government is planning to bring the floor space indexing back has resulted in the panic buying of transferable development rights, says a builder. Photo for representational purpose only
| Photo Credit: Handout
Transferable development rights (TDRs), which have been a State-enforced option for people losing their properties for development projects, are suddenly sought after now, due to rising demand and plummeting supply.
Several builders are desperately looking to buy TDRs wherever available, but the right holders are unwilling to part with them.
State government has replaced monetary compensation in lieu of property acquisition with TDRs, to avoid the huge pay-out burden associated with project components of Strategic Road Development Plan implemented by the Greater Hyderabad Municipal Corporation.
By definition, TDRs are awarded specifying the built up area an owner of a site or plot can sell or dispose or utilise elsewhere, in lieu of surrendering land free of cost which is acquired for public purpose. The award is in the form of a TDR certificate issued by the competent authority.
In 2017, the government had spelt out a TDR policy, according to which properties acquired for master plan road widening would be compensated by TDRs worth 400% of the built up area surrendered. Those part of water bodies and buffer zones were valued at 200% and for heritage structures, an equivalent built up area would be awarded.
Those receiving the TDRs may utilise the same elsewhere or sell/transfer them to the builders or individuals who need them. By obtaining TDRs, one may enhance the permissible built up space by two more floors with the same setback spaces and road width.
Subsequent amendments were carried to make TDRs more attractive, one of which is extension of the utilisation to the area covered by Hyderabad Metropolitan Development Authority. An online TDR bank was created on the GHMC’s website where transactions could take place.
Despite the efforts, TDRs remained non-yielding assets, due to supply always exceeding demand, and the absence of floor space index limitation in the city.
“In several cases, TDRs were sold at not more than 25% of the value, which translated into the same market value of the surrendered space,” an official shared under the condition of anonymity. Distress selling had become common, with several middlemen hoarding the rights for future sale.
However, since the beginning of the year, demand for TDRs has picked up suddenly, and builders have started panic buying of the rights for future use. While the reason for the same remains unclear, the going rate is around 40-50% of the value, builders say.
A rumour that the government is planning to bring the floor space indexing back has resulted in the panic buying, says a builder. However, highly placed officials denied any such plan.
Another reason cited is absence of fresh issue of TDRs as none of the H-CITI projects announced by the government has taken off so far. TDR holders, however, are choosing to retain their rights in the hope of revision of market values by the government.
GHMC has issued TDRs to 1,569 property owners so far, accounting for 37,31,957.85 square yards of area. Of this, 20,01,227.96 square yards have been utilised, while more are in the process. The balance in the TDR bank remains at 15,36,598.33 square yards.
Published – March 06, 2025 08:27 pm IST