Mumbai, the financial capital of India, has grown as a favourite commercial destination for leading Indians and multinational companies. A number of people add in the city each day, in fact the city was built in successive waves of migrations as ample job opportunities, effective connectivity via road, rail and air transport and multicultural environment accumulates the success of the city. Mumbai's population of 21 million (at last count, census 2011) increasing at an alarming rate, has a mixed bag of investors and end-users that are on the lookout for the best deal in real estate.
Traditionally, South Mumbai – Nariman Point, Ballad Estate and Churchgate – was the commercial hub, having all major Government offices and headquarters of many leading Indian and multinational companies. Owing to this, nearby locations like Colaba, Cuffe Parade, Malabar Hill, Altamount Road, Carmichael Road, Breach Candy, Napeansea Road, Peddar Road became the prime residential locations in Mumbai. Higher demand and less availability of land has led to an overload on the infrastructure provisions like power, water and so on, but it is still a favourite place to live for expatriates and top executives of multinational companies. This is the reason why the rentals in these are the highest in the whole of Mumbai.
A trend has been observed in the commercial markets; with companies looking for alternative locations for much smoother business development, developers were motivated towards a paradigm shift towards suburb development. As multinational corporate houses and BPOs set up state-of-the-art production units in the suburbs, residential real estate business in areas such as Bandra, Santacruz, Andheri and Powai etc have shown a record growth. Some of our studies show that areas like Bandra, Goregaon, Andheri and Powai have seen some major residential leases and sale transactions in the last three quarters.
In 2011, most of the luxury and super luxury projects were launched in locations like Lower Parel Bandra, Kalina, Andheri, Goregaon and Powai. The pricing of these projects are in the range anywhere between INR 7000 to INR 20000 per sq ft depending on location and amenities provided in the project. Locations such as Bandra, Kalina, Goregaon and Andheri East in western suburbs and Powai, Ghatkopar and Vikroli in central suburbs and Panvel (Navi Mumbai) are growing fast as activity in commercial real estate is fuelling residential demand in these areas.
The area surrounding BKC has come into the limelight because of the tremendous development activities and infrastructure laid down by MMRDA. Added to this, a recent development that makes properties around BKC more attractive is the increase in FSI for commercial space which was revised to 4 from 2.5 in sector G of BKC. A number of buildings in Bandra Kurla Complex have decided to go for the extra FSI. Following this, the residential catchment areas will see a rise in capital values. Residential property rates are in the range (per sq. ft) of about INR 31,000 to 35,000. Proximity to the sea-link and ease of travel make Bandra an attractive investment for home buyers.
Offices of many multinational companies and BPOs are located in Andheri. Brands like MTS, Vistar, NVidia and Konica have made corporate expansions in Andheri East recently. The perks of being in this locality are obvious: it’s where The Chhatrapati Shivaji International Airport, is located. Also, the upcoming Metro Rail is a promising development that will benefit residents in the long run. Besides five-star hotels, plenty of restaurants and fast food options are available in the locality. No wonder the area has seen a residential price index rise. The current range (per sq. ft) is about INR 11,000 to 15,000. Ackruti Ltd, Westin Towers. The area is now turning into a wealthy suburb, fast booming with infrastructure and recreation options. Development has been in tune with the preservation of green cover in the area. In fact it’s among the rare patches in Mumbai which is left green and will remain that way due to cap on development in and around Royal Palms area. So that means, most of the flats in high-rises have an unrestricted, fantastic view of the Aarey Milk Colony. That makes it a very lucrative investment option. The capital values in the region are in the range of INR 11,000 to 13,000 (per sq. ft).
KALINA (SANTACRUZ EAST)
Kalina has a potential of becoming the upcoming commercial districts in the western suburban location of Mumbai. This micro market is as extension of Bandra Kurla Complex (BKC), however the rules for construction in both the micro markets are different. The location is almost equidistant from both Santacruz and Bandra Railway station. Being close to the airport and having good connectivity to eastern express highway is an added advantage for Kalina. Bandra Worli Sea link has improved accessibility to this location from South Mumbai especially during the peak traffic hours. Many big builders like RNA, Runwal, Dheeraj have started premium residential projects in this area.
Panvel and New Panvel, being designed and developed by CIDCO (City and Industrial Development Corporation) of Maharashtra has a great scope for commercial as well as residential development. The much awaited (proposed Navi Mumbai) International Airport, which is to come up in Panvel-HDIL Ltd and Oberoi Realty are the major developers in this area.
Powai has some of the most scenic and lush-green landscapes in the city. Its connectivity to both eastern and western highways as also local train stations and the airport make it an ideal residential community. In fact, many Media companies and IT/ITeS companies have leased office space in the last quarter in this micro-market and residential space has been leased out to honchos of large MNCs and their families. Average capital values are in the range of INR 16,000 to 20,000 (per sq. ft). Hiranandani, IRB infrastructure Developers Ltd, Nahar Group are the major developers in this area.
Located on the western express highway, Goregaon was a middle-class residential neighbourhood until a few years back. However all that is changing, with the advent of the Oberoi Mall and commercial spaces next to the W.E. Highway such as the Kopra has helped real estate by pegging up the residential prices by 25-30 per cent since 2010 and various topnotch developers like Indiabulls and Hiranandani have started developing with huge land parcels. Residential properties in Panvel and New Panvel are in the price range of INR 4,500-6,500.
Ghatkopar and Vikhroli are majorly circumscribed by the central railway towards its west and Eastern Express Highway (NH 3) towards its east. This further connects the locations via JVLR (Jogeshwari Vikhroli link road) to the western part of Mumbai. The area has a potential to grow due to its connectivity advantages and upcoming proposed Versova-Andheri-Ghatkopar Metro corridor. Some major developers active in these locations are Ekta Supreme, Neelkanth Group, GHP Group etc. Currently properties are priced with the range of INR 8,500-12,500.
Beside the above mentioned areas other upcoming locations for affordable and mid range housing on the western line spreads after Borivali in Dahisar, Mira Road, Vasai till Virar, similarly on central line it spreads after Thane in Dombivali, Kalyan, Ambernath and Badlapur, on the Harbour line the upcoming locations are Ulwe, Kharghar and New Panvel. Despite the distance from the CBD, these peripheral locations are gaining momentum among the middle income segment due to their affordable prices. Houses in these locations are in the price band of INR 2500-5,000 per sq ft.
In conclusion the areas that will witness maximum uptake will be the ones that offer maximum accessibility. In a city like Mumbai, connectivity between homes to workplace remains a major bottleneck because of which much of the potential demand may not get converted in transactions. Factors like good civic infrastructure: accessibility to schools, offices coupled with social infrastructure: recreation zones, parks, etc. at an affordable price will also be a driving force for home sales.