Development Trend in Mumbai
Real Estate Supply will flood Mumbai’s Real Estate
By Dr. Sanjay Chaturvedi
Mumbai is transforming itself with massive shifts and arrests of demand in regional development. One of the main reason for demand arrest is redevelopment. The demand usually emerge locally and wants to be satisfied locally. The inclusive growth and reducing family size which normally generate demand is satisfied by the redevelopment process. Mumbai is having 19000 old and dilapidated Buildings, MHADA colonies, BDD chawls and slums. Since there is no space left and open spaces for residential constructions are almost over, the only direction where the construction activities turn to these opportunities for real estate development.
Other than these, 26000 societies are waiting for their turn for redevelopment. The redevelopment gives not only a brand new construction but also coccus funds to cope up with property taxes, more spaces and facilities like car parking etc. Well almost all societies built before 1990s are game for redevelopment opportunities. According to BMC stats, there are 2 lakh properties in the Mumbai including public premises and government establishments. Out of which almost 1 lakh taxable properties are constructed before 1990. Just like Dubai where a building must be reconstructed from the foundation level every 15 years, Mumbai, though not having statutory condition, is gearing up for this for want of supply in real estate.
Almost 10,000 acres are now put to residential use on the outskirts of Mumbai in eastern suburbs like Kalyan, Dombivali, Badlapur, Ulhas Nagar, Ambernath, Karjat and Panvel. In the name of budget housing and mass scale housing needs of Mumbai, private developers are now gone for volumes instead of margins. Premium segment in Mumbai still remains on very high note. Hence any development within Mumbai city limits will fetch great revenue. But over the years, development process of Mumbai have changed drastically. Decentralisation of commercial activities will reduce the price of CBD area. First victim is Nariman Point where lease rentals have come down to Rs.150/- per sq.ft. per month including taxation. The second in line is Bandra Kurla Complex where lease rentals have touched Rs.200/- per sq.ft. excluding taxation. Some of the buildings in BKC are still want to wait for lease rental to touch Rs.400/- per sq.ft. but takers are having great options within the city limits.
Corridors and, Metro and other routs are changing the demographics of the city. With 4 FSI near metro Stations and corridors like Vasai- Alibag, Mumbai’s pattern of residential location is changing. Almost 66% of the population of Mumbai reside in slums and chawls. Redevelopment of 12% of total Mumbai’s land under them are waiting for great leap. This will be 40 sq.kms under redevelopment within Mumbai’s limits.
In the next three to four years, there will be 26000 societies doubling their FSI consumptions, 12% of land under slums will generate TDR or FSI of 4 will be consumed on the land, 19000 old and dilapidated declared by authorities since 1960 are up for grab with provisions relaxed under 33(7), 33(9) of Development Control Rules of Mumbai Municipal Corporation, 8000 acres of land released to private parties after repeal of Urban Land Ceiling Act which includes builders like Godrej, RNA and other 16 such big players and above all 10,000 acres of land excluding Thane and Navi Mumbai is in the market and massive development is in offing.
The list is not ending here, there are still few pockets left to be developed in various wards for fresh constructions. Land reservations are becoming mockery in the city since TDRs are generated and utilised on these reserve lands and handed over to Municipal authorities. These land again comes under slums with nexus between land owners and local Mafia. The slums are declared and the development of land gains FSI as 4 under slum schemes.
Illegal constructions in Gaothans like Bandra and Kalina and other parts of the city is never looked upon for illegal constructions. Though the FSI granted to Gaothan villages is 2, but by and large narrow lanes are witness of massive illegal land and street grabs of local villagers. Khota-chi-wadi at Girgaon and in Santacruz and elsewhere have lost their heritage privileges. Since heritage TDR may be used anywhere in the city and sold at huge price like Rs.20.000/- per sq.ft. these properties are illegally selling their TDR plus reconstructing to their original shapes. There are no authorities to vouch such additional unwanted and unplanned FSI on Mumbai’s land.