Godrej Properties, a prominent real estate developer in India, has recently made a significant move by purchasing Transfer of Development Rights (TDR) certificates for its Sector 43 project in Gurgaon. While TDR transactions are common practice in Mumbai, this marks a new trend in the National Capital Region (NCR) region. The purchase of these TDR certificates will allow the company to construct an additional 300,000 sq ft of area, with a total revenue potential of Rs 900 crore.
Understanding the concept of Transfer of Development Rights (TDR): In order to compensate landowners whose land is acquired for development projects, the Haryana government issues Transfer of Development Rights (TDR) certificates. These certificates hold a financial value and can be used by developers to build additional floor space elsewhere. Essentially, landowners receive TDR certificates instead of monetary compensation for their acquired land, which can then be sold to developers at market rates.
Details of the deal: Godrej Properties recently purchased TDR certificates worth Rs 50 crore from an individual for its project in Sector 43, Gurgaon. Numerous TDR certificates, totaling around 1,000, were generated for this deal. Most of these certificates carry a face value of 50 sq m each, with some issued at approximately 77 sq m. This adds up to a whopping total area of approximately 1 million sq ft. With the TDR generated from the Golf Course Road extension, the adjusted area available for Godrej Properties will be around 300,000 sq ft. The company plans to launch the project at Rs 30,000 sq ft, which will result in a considerable revenue of Rs 900 crore from the additional area.
Implications for the real estate market in Gurgaon: This transaction by Godrej Properties has the potential to set a precedent for future TDR purchases in Gurgaon. While the trend of TDR sales has been more prevalent in cities like Mumbai, we might now witness more developers in Gurgaon exploring this avenue. Godrej Properties’ sales in Gurgaon witnessed an astounding 473% increase in FY24 compared to the previous year, indicating the company’s growing presence in the region. With a strong launch pipeline for FY25, including new projects in Sectors 103, 43, and 54, it is evident that Godrej Properties is committed to expanding in Gurgaon. Their bid for luxury group housing plots on the renowned Golf Course Road in Gurgaon has already bolstered their market position.
Conclusion: The acquisition of TDR certificates by Godrej Properties for their Gurugram project marks a significant move in the real estate sector. This practice, commonly observed in Mumbai, is gaining traction in the NCR region. The additional floor space gained through TDR certificates will enable Godrej Properties to enhance their project and potentially generate revenue of Rs 900 crore. The success of this transaction is expected to generate interest among other developers in Gurgaon, driving further adoption of TDR in the market. Note: The information in this article is based on sources with knowledge of the matter and industry professionals.
