By: Ramesh Nair, COO – Business & National Director, JLL India
Track2Realty: With BJP controlling the Centre and the two biggest real estate markets in India – Mumbai and Gurgaon – the government has to focus on 3 I’s – Infrastructure, Interest reduction and Income generation. With the BJP’s remarkable show in Maharashtra, the state will give a new lease of life to its infrastructure projects across all sectors.
The projects which are being monitored by the central government will get accelerated with the BJP government’s assumption of political power in Maharashtra.
We have seen the Central Government take a keen interest in the real estate sector. It is evident that it has understood that enhancements in real estate can provide an impetus for growth across various sectors, generating tremendous employment and thereby boost the entire economic outlook for the country. The BJP-led Maharashtra State government can be seen drawing lines along the same goal.
With several infrastructure and real estate initiatives mentioned by BJP in its manifesto, and with the intent to facilitate projects worth INR 11 lakh crore, these projects are likely to get a push in Maharashtra in the coming days. The government is expected to fast-track the new international airport in Panvel, the 22 km Trans-Harbour Link connecting Sewri and Nhava Seva and the Bullet Train connecting Mumbai and Ahmedabad. The airport and trans-harbour link will be game-changers for the Navi Mumbai real estate market, and help to decongest Mumbai by releasing vast tracts of land in Navi Mumbai for development.
The BJP-led state government plans to have a business district like BKC in all the municipalities within MMR. With a business district in each one of the seven MMR municipalities – Greater Mumbai, Navi Mumbai, Thane, Kalyan-Dombivali, Vasai-Virar, Mira-Bhayander, Bhiwandi-Nizampur and Ulhasnagar – the state will receive quite a few Peripheral Business Districts (PBDs) in the MMR region and enable the local populations to get jobs closer to their homes.
This, in turn, will help attract IT/ITES companies that typically prefer lower-cost cities such as Bangalore and Pune, and generate much-needed jobs in Mumbai. This, in turn, will fuel the affordable housing segment and create much-needed IT, R&D and campus-style business parks across the city.
The next phases of the elevated railway, water transport, metro and monorail projects envisaged long back will again be in the spotlight as they hold great potential for enhancing connectivity in all micro-markets of Mumbai. The Thane market will see significantly accelerated growth if the feasibility studies favour the setting-up of an airport in the Kalyan-Ambernath belt.
As far as water transport is concerned, Mumbai will be an important hub for the water transport initiative along the Konkan coast. This will benefit CBD and SBD North, which are the prospective areas from where the city will be connected.
The Government plans to widen the Mumbai-Goa Highway to a 4-lane highway and the area surrounding the Mumbai-Pune Expressway will be taken up for development. This will have a positive impact on Navi Mumbai, as it is the primary micro-market in the vicinity.
‘Make in Maharashtra’, an offshoot of the Prime Minister’s Make in India initiative, will be a major game-changer for the Delhi-Mumbai Industrial Corridor (DMIC) and the manufacturing hub of Pune. Mumbai will be the logical choice for almost all the MNC companies for establishing front offices to complement any investment in Maharashtra.
The IT industry will be promoted in a big way to attract business parks and IT jobs into the state with a view to compete with destinations like Bangalore and Hyderabad. IT Industry Area Development Authority will be established to promote the IT sector in Mumbai, Pune, Nagpur, Nashik, Aurangabad and Kolhapur. With the India Shining sentiment making a decisive comeback, more opportunities will arise in office space transactions. The state governments’ proposal to establish 10 smart cities in Maharashtra has very favourable connotations for the commercial capital of India.
The governments’ initiative to install CCTVs across Mumbai, Pune, Nashik, Aurangabad and Nagpur will not only increase the overall safety and security quotient in these cities, but also present a favourable image of Maharashtra to MNC players who give significant importance to the safety and security aspects.
Apart from this, several other initiatives such as fast broadband for the entire state, fast-tracked IT hardware production and creation of a hardware hubs along with the promotion of the mobile applications, gaming development and cyber security industries will help push up office space demand.
The digitizing of public and land documents such as 7/12 forms and making these available online will not only improve transparency but also promote faster approvals for land transactions.
The relaxation of FSI norms has been received very positively by developers, and will be a major catalyst for more purchases of raw land for development. However, the increase in FSI can also lead to further stagnation of residential property values.
The perceived influx of supply in the market may lead to a correction in prices on Mumbai’s real estate market. However, market sentiments will turn more positive and this should increase funding requirements, as developers will actively take up more projects.
The government’s focus on better governance and its initiative to implement new reforms such as the Real Estate Bill and single-window project clearances will not only help rein in real estate-related corruption but also regularize the functioning of the real estate sector. The state Government is expected to further push and implement the NDA’s central manifesto of housing for all by 2022.
There is an express need for the approval process to be streamlined and expedited. Easy approvals will lead to faster clearances and thereby a steady supply in the market, which will keep property prices affordable. We definitely expect the Government to be more developer-friendly. Fast-tracked reform measures in the environmental approval process and clear policies on real estate will add more clarity and lead to faster execution. If the BMC sees power realignment, and if this helps new reforms and regulations to come through faster, then Mumbai’s real estate sector will definitely be a clear winner.
