Boman Irani: Redevelopment Drives Growth In Mumbai’s Land-Locked Market

For Mumbai’s real estate developers, Boman Irani, Managing Director of Rustomjee, describes it as an “asset-light model” that provides a significant break from the ever-rising cost of land acquisitions. Irani should be aware that the biggest player in the redevelopment market is Rustomjee, doing business as Keystone Realtors. “Redevelopment will be a major force behind growth. After announcing the company’s second-quarter results, Irani stated, “We are strategically positioned to capitalise on the current momentum.”

However, in a city where real estate is among the most expensive in the world, property developers from all over the nation have warmed up to the notion, putting local players like Rustomjee up against some fierce competition. Mumbai is landlocked, and between 30 and 50 percent of the total is made up of land prices.

Additional draws are the scale and economics. Over 25,000 buildings in the Mumbai Metropolitan Region (MMR) with an estimated worth of Rs 30,000 crore are eligible for renovation, according to industry association CREDAI-MCHI. Any building that is more than 30 years old is deemed dilapidated by the Municipal Corporation of Greater Mumbai (MCGM) and may be eligible for rehabilitation in accordance with MCGM regulations.

Older buildings have a lot of floor space index (FSI) that can be used. Therefore, there is a lot of room for improvement,” stated the chief financial officer of a real estate firm that works on Mumbai rehabilitation projects. Permissible development on a piece of land is referred to as FSI.

In the current competitive climate, societies are needlessly inciting pricing wars among developers. A must match developer B’s output if it is superior. Greed knows no bounds. The price war renders projects unfeasible. Dhaval Ajmera, director of Ajmera Realty & Infrastructure and secretary of CREDAI-MCHI, stated, “You will return to the period of non-delivery, work stoppage, and so on.” Ajmera is working on several projects in Mumbai and has signed a few contracts there.

Source: Financial Express

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