Real Estate (cycle) – Will pessimism give birth to multibaggers!

Some information for Mumbai based developers:

New rules for development ahead of them. {Will assume the reader has read the above article}

So if developer RKBuilder (RKB), wants to build in suburb (SB),
and has to have TDR of 50% of final build (fb) squarefeet (sf) acquired,
and if SB has ready reckoner (RR) TDR at, say, Rs 100 per sf,
and DRP has RR at Rs 400 per sf;

then RKB has to buy
40% of fb from DRP at (max possible price) of 360 per sf [90% of RR of 400 = 360]
10% of fb from local SB at (max possible price) of 90 per sf [90% of 100 = 90]

Even though SB may be far away from DRP, RKB will have to shell out premium prices for development.