LDA to ‘freeze’ cost of its flats to compete with pvt developers

LUCKNOW : Faced with the dilemma of losing buyers’ interest in its properties, the Lucknow Development Authority is planning to freeze the cost of its flats to avoid further escalation. The development authority plans to bring a proposal in this regard at its next board meeting.

Recently, all efforts of the development authority to dispose of its vacant flats have come to a naught.

Reason: The flats offered by private developers are not only cheaper as compared to the LDA’s flats but are also well maintained.

Earlier, it was altogether a different story. LDA’s flats were much in demand and there used to be a long waiting list.

“The development authority is planning to bring a proposal to put a freeze on escalating costs of its flats in view of stiff competition from private builders,” said Jai Shanker Dubey, secretary, LDA.

On August 15 this year, the development authority had kicked off online registration of its properties. The registration process would continue still September 25.

But till date, barely a handful of people have shown interest in the LDA’s offer to book around 1,400 flats that are lying vacant. On offer are one bed room to three bed room flats costing Rs 12 lakh to Rs 60 lakh respectively.

“Scenario has changed altogether. Earlier, LDA had no competition. But now, private developers are posing a big challenge to the LDA despite the fact that some of them have failed to fulfill promise to handover flats on time,” said a senior LDA official.

In the ongoing financial year, the development authority has set a target to earn Rs 800 crore from sale of its commercial properties. This seems to be a tall order.

“All across the city, commercial activity is going on from residential space. So, people are not willing to invest in costly commercial properties,” said an LDA official.

LDA’s flats are among several commodities that are costing more after roll out of GST in the state.

Instead of the pre-GST 4.5% tax, the LDA’s homebuyers are now paying 7.5% more under the new tax regime.

Keeping in view the fate of residential properties of the LDA, it would be a tall order for the development authority to dispose of its commercial properties.

LDA HAS SET A TARGET TO EARN ₹800 CRORE FROM SALE OF ITS COMMERCIAL PROPERTIES