Scarcity of land and upcoming infrastructure projects such as Coastal Road and Metro Phase 3 have opened up opportunities for redevelopment of old buildings. Mumbai’s real estate market has been witnessing increased activity in the housing society redevelopment space with even developers from other cities such as Bengaluru picking up old buildings in the land-starved city to redevelop them into modern apartments. This is primarily because there are several buildings that are old enough to require a facelift and major real estate firms have the financial wherewithal to execute such projects. Bengaluru-based listed real estate developer Puravankara Limited announced last week that it has secured redevelopment rights of a housing society named Miami Apartments at Breach Candy in South Mumbai. The company also announced that it would be redeveloping four more societies in the Andheri area of Mumbai.
The apartments are located on a 2,000 square metre parcel and prices in the area are in the range of ₹1.25 lakh to ₹1.40 lakh a square foot, Puravankara said in a release on September 12.House of Hiranandani also announced last week that it has entered into development agreements with five major housing societies in Mumbai’s Chembur area and plans to invest ₹3200 crore for the same. The company has presence in Mumbai Metropolitan Region (MMR), Bengaluru, Hyderabad and Chennai.
The company said it has signed additional redevelopment projects of 17 lakh square feet with a GDV (Gross Development Value) of ₹5,000 crore. “The company has entered into registered development agreements with five major housing societies in Chembur and plans to invest ₹3,200 crore,” House of Hiranandani said in a statement.
These five housing societies in Chembur comprising 459 tenants include redevelopment of Maitri Park in Chembur East, measuring about 9 acres and Shrinagar Society in Chembur West, a cluster of four societies measuring about six acres. The company said it is in the process of securing necessary approvals and plans to complete the redevelopment within the next 4-5 years. The list does not end here. Several listed real estate developers already have a pipeline of redevelopment projects in the Mumbai real estate market. Post Covid-19, the number of old buildings undergoing redevelopment has not slowed down in Mumbai. Redevelopment activity gains pace in South Mumbai. Redevelopment activity in Mumbai picked up pace after the Maharashtra government reduced the premiums on real estate projects by half to boost housing sales post COVID-19. However, in the last one year, there have been a handful of announcements for old buildings undergoing redevelopment in south Mumbai that is home to one of the costliest real estate properties in India.
“It usually takes two to three years for a real estate firm to formally launch a redevelopment project. The announcements we see today have probably been in the works for two or three years or at least one year. From 2016 to 2021, the Mumbai real estate market was under stress and there was no supply. Post Covid-19 pandemic, there was a push in the form of premium waiver that ensured redevelopment of old buildings continued,” said Pankaj Kapoor, managing director of Liases Foras Real Estate Rating and Research Pvt Ltd.
“There is still a large part of the city that is yet to be redeveloped and considering there is not much open land available in Mumbai, redevelopment projects will play a significant role in the Mumbai real estate market for the next 10 years,” Kapoor added.
Why is there a rush for redevelopment projects?
In South Mumbai, the partial opening of Coastal Road and the announcement of Cuffe Parade to Aarey Colony Mumbai underground Metro-3 corridor has raised hopes of better connectivity within the city. This may have a positive impact on Mumbai’s real estate market, especially redevelopment of old buildings, an activity that has picked up pace in South Mumbai and Central Mumbai, said real estate experts.
The Coastal Road and Mumbai Metro-3 are expected to boost real estate activity in areas like Nariman Point, Cuffe Parade, Churchgate, Mumbai Central, Worli among several other areas of south Mumbai and Central Mumbai directly.
Suburban areas like Bandra, Versova, Andheri, Malad, Kandivali, Borivali and Dahisar are expected to benefit indirectly due to the improved connectivity of suburbs with central and south Mumbai, experts added.
