Indian Railways Taps Prime Mumbai Land for Development with Revenue Share Model
The Rail Land Development Authority (RLDA) plans to open up three prime plots in Mahalaxmi, Bandra East, and Parel for commercial and residential development on a 99-year lease, aiming to raise over Rs 8,000 crore.
Indian RailwaysRldaLand DevelopmentRevenue Share ModelMumbai Real EstateReal EstateSep 08, 2025
An RLDA official, speaking on the condition of anonymity, said, “We are tapping our Mumbai land with a new financial model this time. The market has always had a keen interest in land in Mumbai. Our unique selling point is the prime location of our plots.” The official added, “Most of the land that the railway owns in the city is in prime areas, close to railway lines and stations. We are expecting a strong response.”
For the first time, the RLDA has invited bids based on a revenue-share model, where the developer must pay a percentage of its revenue to the RLDA towards the lease premium, according to a predefined schedule, instead of paying the lease premium upfront. For the Bandra East plot, the RLDA has floated a bid under which the developer must pay at least 45 percent of its revenue share to the authority. The revenue share for the Parel plot will be at least 30 percent, and for the Mahalaxmi plot, the revenue share will be a minimum of 35 percent.
According to the RLDA officials, the railways will provide the land, but the construction, as well as all required approvals and clearances, will be the developers’ responsibility. Together, across the three locations, the RLDA has invited bids to develop nearly 19.5 acres, with a permissible Floor Space Index (FSI) of four on the Bandra East plot and 4.05 on the other two plots. The FSI is the ratio of the built-up area to the total plot size.
The largest of the three plots that the RLDA plans to auction is in Bandra East, measuring 11.2 acres. The railway hopes to generate at least Rs 5,365 crore from the land. The plot is 500 metres from the Bandra suburban railway station and close to the Bandra Kurla Complex (BKC) business district. The RLDA has proposed that this plot be used for commercial development, considering its proximity to BKC. It is also said to be free of any encumbrances and has negligible vegetation.
The land at Parel spans approximately 5.7 acres, and the RLDA has set its reserve price at Rs 1,734 crore. This land is a small fraction of a much larger parcel that the railway owns at the Parel Supari Baug Colony. At the Parel colony, the RLDA has floated a bid for residential development. The plot it holds there is a mere 36 metres from the arterial Dr B.R. Ambedkar Road and close to several residential pockets in the island city.
The plot at Mahalaxmi, measuring 2.6 acres, is adjacent to the railway line close to the Mahalaxmi suburban railway station and the Science Centre Metro station. The RLDA has floated a bid for a mixed residential and commercial development. The RLDA will hold a pre-bid meeting for the Mahalaxmi land on Tuesday and for the other two land plots on 23 September.
Frequently Asked Questions
What is the RLDA and what is its role?
The Rail Land Development Authority (RLDA) is a dedicated arm of the Indian Railways established to generate revenue by developing vacant railway land in the country. It is responsible for identifying and developing land parcels for commercial and residential purposes.
How many plots are being opened for development in Mumbai?
The RLDA plans to open up three plots in Mumbai for development: one in Mahalaxmi, one in Bandra East, and one in Parel.
What is the revenue share model introduced by the RLDA?
The RLDA has introduced a revenue share model where developers must pay a percentage of their revenue to the RLDA towards the lease premium, instead of paying the lease premium upfront. The revenue share percentages vary for each plot.
What is the total area of land being offered for development?
The RLDA is offering nearly 19.5 acres of land for development across the three plots in Mahalaxmi, Bandra East, and Parel.
When will the pre-bid meetings for the land plots take place?
The RLDA will hold a pre-bid meeting for the Mahalaxmi land on Tuesday and for the other two land plots on 23 September.
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