Reaction to increase in Delhi FAR

jllPuri, Chairman & Country Head, JLL India:


As per reports, the Central Government has approved the proposal to increase the FAR in Delhi state. This increase in FAR is for residential plots which are 750 square meters or higher, wherein the FAR has been increased to 200 from 150. For plots bigger than 1000 square meters, the FAR has gone up to 200 from 120 and ground coverage has been increased from 40% to 50%. Providing the higher FAR is a good move; that said, it will make the apartments bigger – and with no change in density norms, ticket-sizes may rise as well.


Though no clarity has been given on an increase in the dwelling units allowed on the larger plots, there is a provision in the draft Delhi Master Plan 2021 which allows for an increase in the number of dwelling units. Under this provision, the cost of a concurrent augmentation of associated civic infrastructure has to be borne by the developer and paid to the authority. This provision in the draft master plan can be used to increase the number of dwelling units.


If used judiciously, this provision in conjunction with the increased FAR can be utilised for increasing the housing stock on residential plots going forward. Only then will some movement towards creating more houses and an associated reduction in prices be likely. With height restrictions for individual residential plots not increased from the current 17.5 meters along with stilt parking provisions, developments are likely to remain of same height.


There is also likely be an impact on group housing plots, where ground coverage that was previously 33.3% will now be 50%. This will allow for bigger apartments to be built, though FAR here was already 200 under the master plan. No height restrictions were applicable for group housing plots, and hence there is no  issue for such developments with regards to height provisions.


A sizeable uptick in the stock prices of listed players which are likely to be holding prime lands in Delhi – notably DLF, Unitech and Anant Raj – has been seen. Better valuation for such land on account of increased FAR for residential plotted developments is the likely factor behind this increase in their respective stocks. The impact may be seen in the short-term, but there should be more going forward when the mid-term review of the master plan 2021 is completed and the changes notified by the end of the year.