|
Why are realty rates going over the roof in Mumbai?
(Ecomonic Times, The (India) (KRT) Via Thomson Dialog NewsEdge) Jan. 22--Real estate prices in Mumbai look all set to soar northward. The recent three deals Mumbai Metropolitan Region Development Authority (MMRDA) residential and commercial plots sale in Bandra Kurla Complex (BKC), Reliance Industries deal with MMRDA for a convention, exhibition and commercial complex and the sale of residential property in Cuffe Parade for Rs 4,0000 per sq.ft- have taken the Mumbai real estate prices to an all time new high.
According to industry experts, the recent Supreme Courts decision, permitting the developers to go ahead with the construction activities in National Textile Corporations Mill lands in Mumbai will also support the dramatic increase in the real estate prices in Mumbai.
According to industry experts, after the news of Reliance Industries as the highest bidder for a large commercial plot in Mumbai and the Government of Singapore Investment Corps plans to enter Indian real estate, prices could surge sharply.
On 17th January, the Mukesh Ambani-controlled Reliance Industries was the highest bidder for the MMRD 18.5 acre plot, quoting Rs 1,104.11 crore compared to MMRDA reserve price of Rs 480 crore.
The same day, GIC Real Estate, an arm of the Government of Singapore Investment Corp., said it plans to buy real estate in India and Brazil to guard against the risk of falling US property prices.
The real estate sector is one of the fast emerging sectors in India and especially in Mumbai as the country gears up to a growing retail and financial services market.
It is also estimated that foreign private equity funds are planning to set up shop in the country. A recent PricewaterhouseCoopers LLP report has said that private equity funds would invest about $8 billion of private equity in the country real estate sector.
All recent developments are likely to add upward pressure on rental and capital values, said sources in real estate major Cushman & Wakefield. Rising demand from corporate users and the overall liquidity situation in the real estate industry will likely add to rising land values over the short term, they added.
Property consultants said that quality office premises shall continue to remain in short supply compared to the demand and as a result are expected to witness a further increase of 10 to 15 percent increase in capital and rental values over the next couple of quarters across micro-precincts.
The final judgement for Mill lands will provide future guidance on supply in South Central Mumbai. The SC decision in favour of NTC mills permitting mill buyers to carry out the construction ac-tives is being viewed as a ray of hope for the developer community.
The SC decision, in favour of mill land owners will mean medium term stability in both, supply situation and a much needed correction in price trends.
Continued leasing by corporate due to a series of consolidations and relocation, most of which will be due to growth and expansion of business environment across all sectors including IT/ITES, Insurance, Banking and Finance, Pharmaceuticals, Commodities, Aviation, etc.
A senior consultant with the TPG Infrastructure said that BKC will emerge as a more vibrant and active business district for corporations. The A grade buildings in this precinct will also be the most expensive commercial real estate in India.
Select locations in Navi Mumbai will witness increased leasing activity particularly from IT/ ITES sector. Atleast two private IT parks besides Reliances SEZ are at planning stage and expected to be launched in 2006, property experts said.
The residential property prices at Cuffe Parade hit an all-time high when a third floor apartment in Maker Tower A was sold on Friday for an unprece-dented Rs 40,000 per square feet.
The 3,000 square feet property, which belonged to exporters Abdul Latheef and Abdul Khader, was sold to Ajit Jain, a leading chartered accountant, for Rs 12 crore. The landmark deal comes shortly after Citibank sold its 2,100 square feet property on the 24th floor of Maker Towers B to India Bulls executive director Gagan Banga at Rs 37,200 per square feet.
Banga had to shell out Rs 7.22 crore for the flat. These two deals have skewed residential property prices at Cuffe Parade, which even six months ago ranged between Rs 15,000 to Rs 28,000 per square feet, depending on the location.
Residential property prices at Cuffe Parade hit an all-time high when a third floor apartment in Maker Tower A was sold on Friday for an unprecedented Rs 40,000 per square feet.
The rates at Maker Towers A & B have suddenly shot up to as high as Rs 30,000 in the last one month. In the same building, the rates could be different depending on the view (sea-facing flats carry a premium) and the floor.
Sources said, "The 20-year-old Maker Towers A & B carry a premium higher than other flats thanks to sheer location."
In comparison to A & B, the neigh-bouring Maker Towers H to L carries a tag between Rs 15-20,000 per square feet, said Diyaram Kotwani, the chairman of the building society at Maker Tower A & B. Lakesh Kaul, secretary of the building and owner of Kaul Builders & Devel-opers, confirmed the sale.
He said Jain had approached the society for a no-objection certificate. Kaul said there was renewed interest in the building because of the extensive renovation work done since last year, plus the 35,000 sq ft of open space. Besides, of late, some owners had chosen to put their flats up for sale, he added.
[ Back To TMCnet.com's Homepage ]
|
Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, September 16-18, 2008. Los Angeles, California.
