After 2 yrs, Mumbai developers step on gas
Mumbai realty developers, whose projects were stuck for a couple of years due to lack of approvals and confusion on development rules, are using the current Dussehra-Diwali season to launch new projects, in the city and its suburbs.
At least two dozen new projects have been launched in Mumbai and its suburbs since the onset of Navratri last Tuesday. Consultants and developers expect similar numbers till the middle of next week.
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“After the new development control rules (DCR), there is greater clarity on how much one can develop. Second, it’s a season time to launch new projects," said Bharat Dhuppar, chief marketing officer, Omkar Realtors. It is looking to launch two projects — one in Malad, the western suburbs, on October 27 and the second in Kurla, in the central suburbs, on November 1.
These were its first launches this year. “Many approvals were stuck and the new commissioner has set the ball rolling. All plans were changed according to the new DCR," says Om Ahuja, chief executive officer, residential services, Jones Lang LaSalle (JLL).
The new DCR, released early this year, says areas such as balconies, flower beds and terraces would be counted in the calculation of floor space index (FSI). FSI denotes the amount of construction allowed on a given plot of land. The state government allowed compensatory fungible FSI to the extent of 35 per cent for residential development and 20 per cent for industrial and commercial developments.
Another developer, the Lodha Group, has launched three projects in the past two weeks, Lodha Splendora in Thane, Lodha Evoq at Wadala and Lodha Venezia in Parel.
“It is a combination of many reasons. In the last two years, developers have bought a lot of land. Markets are comparatively better now. It is natural that launches are happening at this point," said Sanjay Dutt, executive managing director, Cushman & Wakefield (C&W).
Launches are one thing but are these finding buyers? “Buyers are only buying when prices are reasonable. If the price is high, they stay away," said Ahuja.
Omkar has kept the unit price of its project at Kurla, at a little less than Rs 2 crore. “In the heart of Mumbai, it is difficult to get an apartment for that price," says Dhuppar of Omkar.
Early last month, when the L&T-Omkar joint venture launched its redevelopment project in Bhoiwada, in the Parel area of central Mumbai, it got 400 confirmed bookings and 150 others waiting within four to five days of the launch. The project had some attraction. Besides two bedroom apartments , rare in the new complexes of south-central Mumbai, the project was in proximity to the extended business district of Lower Parel-Worli.
Though L&T Omkar had launched apartments at Rs 16,000 a sq ft, the apartments would cost buyers around Rs 20,000 to Rs 22,000 a sq ft, given floor rises and other charges, consultants say.
JLL’s Ahuja said when Andheri and Goregaon, the western suburbs, are commanding prices of Rs 12,000 and Rs 18,000 a sq ft, respectively, “the buyers would not mind paying a little more and move closer to where they work".
Developers are also offering goodies to woo buyers during the festive season. For instance, on October 18, Hubtown Ltd, formerly Ackruti City, launched a lucky draw for its Hubtown Shikhar project, where buyers can win up to 10 kg of silver and other goodies. Sunteck Realty has launched Sunteck City in Goregaon West, wherein it is selling Disney-inspired homes. The Patel Group has launched a scheme at its Patel Colossus project wherein buyers can win a Chevrolet Spark car if they book apartments before Navratri and win a 10g gold coin if references given by them convert into a sale.
The Lodha group is giving a 15-20 per cent discount in its Venezia project, where it is quoting Rs 20,970 a sq ft against a market price of Rs 22,000 to Rs 24,000 a sq ft.
Many developers have also waived value added tax and service tax on the property, which is at least two per cent of the value. Some are also promising the apartments are being sold on the basis of carpet area. ““Developers are giving goodies, finance schemes, offers to woo buyers. Everyone has a different strategy," said C&W’s Dutt.