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Ten X Realty, a Raymond subsidiary, plans to undertake the redevelopment of Kumari Jethi Sipahimalani housing society (also known as Navjivan Society) property in Mahim West. Spread across 3.6 acre, the project is strategically located in one of the most sought-after residential areas of Mumbai, and...

Ten X Realty, a Raymond subsidiary, plans to undertake the redevelopment of Kumari Jethi Sipahimalani housing society (also known as Navjivan Society) property in Mahim West. Spread across 3.6 acre, the project is strategically located in one of the most sought-after residential areas of Mumbai, and is estimated to have a revenue potential of over Rs 17 billion, according to an intimation by Raymond. The redevelopment market Most of the construction in Mumbai took place from the 1970s, so redevelopment activity offers huge potential, especially in central and south Mumbai. Many societies are coming up with redevelopment projects because the floor space index (FSI) for redevelopment is up to four times higher today. Also, such projects contribute about 2-3 per cent of the total supply in the city, which is expected to increase to 10-15 per cent. The only drawback is the time required for completion of such projects to delays in receipt of permissions from society residents, building approvals, environmental clearances, etc. But overall, such projects are more profitable for developers. “The trend is encouraging for Mumbai's real-estate market,” believes Swapnil Anil, Executive Director and Head Advisory, Colliers India. “Redevelopment initiatives are crucial to the city's ability to meet the rising demand for residential and commercial real estate while simultaneously enhancing the standard of living for locals. Land shortage is the primary obstacle to real-estate development in Mumbai. The more valuable city centre regions offer extremely limited prospects for greenfield developments. There are also some potential challenges associated with redevelopment projects. One challenge is that they can be disruptive for residents of existing buildings, who may need to be temporarily relocated during the construction process as well as legal challenges related to land and projects that are generally over 30 years old. Overall, while redevelopment projects are a good trend for Mumbai, it is important to ensure that the interests of all stakeholders, including residents, developers and the city government, are taken into account when planning and executing them.” About the profit ratio of redevelopment, he says, “The profit ratio compared to traditional developments is slightly higher as it eliminates upfront land acquisition costs, which is a boost to developer’s cash flows in initial years. Ideally, the project timelines for redevelopment are optimum due to being at established locations where the absorption of sale component is faster. In 2019, the Government launched the self-redevelopment policy that enables societies to redevelop on their own to gain more benefits and incentives compared to the prevalent developer-driven redevelopment model.” So, which areas in Mumbai are likely to see maximum traction for such activity? “Areas that are centrally located and have good connectivity to public transportation,” he responds. “The western and central suburbs with a large number of old and dilapidated buildings, which are ripe for redevelopment, will witness maximum projects in the city.” “The real-estate market in Mumbai is relatively large and offers significant potential for profitability,” says Anil. “This is likely to attract developers from other parts of India who are looking to expand their operations. However, it is important to note that the redevelopment market in Mumbai is highly competitive. Developers will need a strong track record and deep understanding of the local market to succeed.” About the potential of the redevelopment trend, Manju Yagnik, Vice Chairperson, Nahar Group and Senior Vice President, NAREDCO- Maharashtra, says. “We consider this inclination as transformative and constructive, indicating a move toward sustainable urban development. Reviving old buildings fits with our dedication to eco-friendly and resource-efficient projects while also making the most use of available land. More efforts of this kind are expected to be inspired by this trend, which will promote responsible development in the real-estate industry. Some parts of Mumbai will see the most redevelopment activity, especially those with older buildings and lots of demand. These locations are ideally suited for change due to their expansion potential and need for updated living areas. That said, it is important to consider the possible repercussions carefully. It will be essential to balance reviving metropolitan areas and attending to the needs of current communities. Developers and stakeholders must work together to shape a future where redevelopment satisfies market demands and enhances the general well-being of the city and its citizens as we move forward.” As for future ramifications, Anil says, “It could lead to increased investment in the city's real-estate sector and development of new and innovative projects. It could also create jobs and boost the local economy. Redevelopments will provide better housing and amenities to the present residents, improving their living standards. Redevelopment will also increase the population density of the city, which will further impact the load on present infrastructure, resulting in more traffic, use of resources and requirement of more social amenities.”-R Srinivasan

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