Redevelopment Projects in Bangalore

What does ‘Redevelopment of an apartment’ mean? Is your apartment in Bangalore due for redevelopment? Who takes the decision to redevelop? Do you need consensus of all flat owners to redevelop? Where will the money for redevelopment come from? The following article will answer these questions and more.

Redevelopment is the process of reconstructing a new residential or commercial building by knocking down an old structure which is usually unsustainable or when the owners collectively feel that a change is due. We will keep this article focused on redevelopment projects in Bangalore and address the commercial redevelopment in another article.

Most buildings which are older than 25 years to 30 years are generally due for a redevelopment. Some of them maybe due for redevelopment sooner due to poor quality of construction. Since the IT boom of 90’s and 2000’s, Bangalore has seen several cost sensitive thus poor quality constructions. These constructions offered small ticket access to thousands of first time home buyers. With many of these apartments not aging well, the focus on redevelopment of these apartments in Bangalore has now been in the centerstage of construction activity discussions.

Not all redevelopment projects are done due to poor quality constructions. There are several high quality constructions from 80’s and 90’s, that you will witness in Malleswaram, Basavanagudi, J P Nagara and other area in Bangalore which are ‘under utilizing’ their build potential. Many of these apartments were built luxuriously in terms of space allocation with very less regard towards optimum utilization. It’s not uncommon to find ‘verandahs’ of 200 to 300 sqft or ‘pooja rooms’ which are of 200 sqft+ in these apartments along with large and spacious corridors, car ramps and parking lots. These old and luxurious developments in terms of space, occurred at a time when Bangalore did not see the mad rush and demand for land as we witness today. As a result, many of these apartments are considering redevelopment to upgrade their homes to more space efficient and amenities rich developments.

Who decides to redevelop and where does the money come from?

A homeowner association typically drives the initiative of redevelopment of their apartment with full consensus from the homeowners. It’s not uncommon for some of the homeowners to vote against the redevelopment of an apartment. There are several recourse available in such situations.

Redeveloping an apartment can be an expensive affair besides being an time, resource and expertise intensive job. Financing the redevelopment is done either by;

• the association of homeowners where individual homeowners have contributed to a pool of funds for financing the redevelopment in proportion to the size of the unit they own
• an incoming developer or builder who will fund the entire redevelopment at his own cost but will be compensated by utilizing the unutilized FSI or ‘build potential’ of a project.

There are some NBFCs, Private Debt funds and Housing Finance Companies (HFCs) which can fund the construction as long as their loans are securitized and a professional construction company is engaged to complete the redevelopment. Most redevelopments that happen in Bangalore are ones that are driven by developers/builders as homeowner associations are assured of quality and timely construction.

Prop Republic has assisted several redevelopment projects in Bangalore. Regardless of your diverse requirement, Prop Republic will find a perfect solution for your redevelopment worries. Reach us today: Anupam Sringeri/9342107710/Email: anupam@proprepublic.com