KUL takes up 18 redevelopment projects in land-starved Mumbai @ Rs 500 cr

February 18, 2010, MUMBAI: Accelerating its business in land-starved Mumbai which has thousands of dilapidated and ageing buildings, realty developer Kumar Urban development Limited (KUL) has embarked on a series of 18 redevelopment projects, including two massive skyscrapers, across the island city with an initial investment of over Rs 500 crores.
KUL Chairman and managing Director Lalitkumar Jain said: “Redevelopment is the future of real estate in Mumbai that faces severe constraints on the availability of open land within the city limits.”
“On the one hand the demand for housing stock is rapidly growing in the city, while on the other there are thousands of ageing buildings which are dilapidated and have reached a stage where it is not possible to carry out structural repairs. Moreover, their rehabilitation does not make economic sense, and it is better to construct new buildings instead,” said Mr Jain, who is also the Vice-President of CREDAI (Confederation of Real Estate Developers Associations of India).
To begin with, KUL itself has taken up 18 redevelopment projects of the existing properties across the city and there are about 2,000 families who will be accommodated in brand new flats moving out from the old dilapidated buildings that may crash without notice.
Work is in full swing in eight of these projects and the company will start delivering flats by the year end and complete the process of possession in the rest of the projects within 18 months to 36 months, depending on the size of the project.
The towers are Kumar Couture, the ambitious Sky Villa project at Worli, and Kumar Echelon, the 62-storeyed building with multi-floor parking at Tardeo. Targeted at the premium luxury segment, the unique sky villa project will have 24 bungalows in the air with distance between each villa being 40 feet – equivalent to four floors of a normal building. It will have a car park in every floor and several upmarket amenities like swimming pools, club house among others.
In Kumar Echelon, first habitable floor starts at 12th floor and will have the new public parking norms laid down by the Municipal Corporation of Greater Mumbai.
Kumar Urban Development Limited has filed its Drfat Red Herring Prospectus (DRHP) with the regulator SEBI seeking to launch its IPO to raise up to Rs 450 crores. The company will deploy these funds for land acquisitions, construction and for repaying some loans.
According to global real estate solutions company Cushman & Wakefield, the pan-India residential demand is estimated to be over 7.5 million units by 2013 across all categories, including Economically Weaker Sections (EWS), affordable, mid and luxury segments. The residential demand for top seven cities is estimated to be 4.5 million units by 2013. Of the total expected demand across India, 43% is likely to be generated in tier 1 cities, i.e., Bangalore, Mumbai and NCR. Mumbai is likely to witness the highest cumulative demand of 1.6 million units by 2013 due to various development projects and increasing urbanization in the city.
Coupled with this, some estimates show there are as many as 19,000 dilapidated buildings ready for redevelopment in the southern and central part of Mumbai alone. There could be another 5,000 buildings in the suburbs that fall into the category of redevelopment. “All these augur well for realty developers in Mumbai are concerned,” said noted analyst Arun Kejriwal, MD of KRIS.
Allaying apprehensions on the infrastructure, Mr Jain said it is a pre-requisite for the new projects to get NOCs form the concerned department like water, sewerage, traffic and so on without which no project can start. He praised BMC for taking care of the future needs of the city by launching various infrastructure augmenting projects.
Currently, the company is undertaking redevelopment of existing residential, complex apartments in the city of Mumbai in addition to slum rehabilitation projects in Pune. In residential projects, the company’s main focus is on developing townships which are integrated master planned communities in the mid to luxury segment.

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