DELHI: After a change of construction rules in Delhi made provisions for smaller one-acre farmhouses, owners of large properties on the city's fringes are actively looking to unlock the value of their surplus land.
Earlier this year, the Delhi Development Authority (DDA) reduced the minimum area requirement for farmhouses to 1 acre from 2.5 acres earlier. The revised norm offers owners of an estimated 2,700 farmhouses in the city the opportunity to downsize and monetise their surplus property.
"Asset prices in these areas have appreciated significantly in the past decade and now offer an opportunity to unlock value," said Vishal Suneja, a businessman whose family owns a farmhouse on Bandh Road near Chhatarpur, where land prices have risen more than 200 times in a little over a decade. An acre of land in Chhatarpur that cost Rs 8-12 lakh in the 90s is now available for Rs 20-25 crore.
While farmhouses are springing up in newer areas within the city's limits, owners of farmhouses in older areas such as Chhatarpur, Satbari, Asola, West End Greens, Jaunapur, Ghitorni, Pushpanjali, Kapashera and Bijwasan have started engaging real estate developers and property brokers to ascertain the value of the land they are willing to let go.
This push to monetise surplus real estate has seen Delhi-based Uppal Group acquire land for farmhouses in areas like Chattarpur, Jaunapur and Kapashera, while other builders are offering schemes where they develop an existing property as per the new policy and hand over a portion of the farm along with some money to the owner.
Samyak Properties & Infrastructure is redeveloping a 10-acre farmland in the Bijwasan area under a development management pact with the landowners. On this land, there is potential to build 8-16 bungalows, according to the new policy.
"After the one-acre farmhouse policy was announced, people who have large holdings in these areas have smelt an opportunity. For many, it is also difficult to maintain such large farms," said Manish Uppal, managing director of Uppal Group.
Another developer, Sanjay Khanna, director of Kailash Nath Projects, is scouting for opportunities to collaborate with farm owners across the city. "Many of these owners have surplus land that they are looking at monetising. It could be because they need money to stabilise their business in these trying times or just to encash their valuable properties that were so far highly illiquid," he said.
Under the changed policy, new dwellings called Country Homes will be allowed on a one-acre plots. They will have a higher floor area ratio of 30 compared with to the earlier stipulated 15. This would mean close to 13,000 sq ft of space can be built on a one-acre plot, excluding the basement, but 50% of the area has to be left green. Arvind Mehtani, owner of SettlersIndia. com, a brokerage firm that has been dealing in farmhouses since 1998, said several of these farms were bought over the last 15-20 years and since then prices in these areas have multiplied.