Track2Realty Exclusive: In India redevelopment is a huge market, where a developer has to work with cooperative housing societies. In Mumbai the process has already started due to additional FSI granted with the new development rules. The new DCR has made it easy for developers to negotiate with the societies because now they know what areas are sanctioned and there are no free areas.
Redevelopment is no more a taboo and looked down due to slum redevelopment alone. Earlier developers with iconic brand preferred to stay out. Now many developers known for luxury projects are willingly opting for the redevelopment of old colonies. Similarly, developers with traditional roots in redevelopment projects are also successfully getting into super luxury segment now.
Anshuman Magazine, CMD of CBRE South Asia believes though slum redevelopment is an issue, but it is time to redevelop the old housing societies where the land and infrastructure is limited and the value has gone up due to locational vantage point. Welcoming the new DCR rules in Mumbai which has given clarity to the developers, he, however, demands policy ambiguity to be eased out and awareness spread among people.
“Redevelopment is the only way forward and internationally also experience suggests that ROI (Return on Investment) could be higher than the new launches due to the locational advantage. And since the values are high, developers tend to take risk. I feel in redevelopment projects values are high, ROI is higher and demand is more, but still in the Indian context Mumbai is the only success story in redevelopment,” observes Magazine.
Devang Varma, Director, Omkar Realtors & Developers says in a metro city like Mumbai, the need and scope of redevelopment is immense owing to severe scarcity of land. With more than 50 per cent of the city’s population residing in slums occupying a large share of the city’s space, slum redevelopment will continue to dominate the redevelopment share even as other forms of redevelopment including those of cessed and dilapidated buildings, cluster redevelopment, contravening structures (BMC), rehab of PAP and MHADA buildings are steadily gaining pace.
“For us it was never a taboo as the company managed to earn the market goodwill with its qualitative and timely deliveries. With the city expected to grow vertically, branded or organized developers in any case, would have to tap into redevelopment sphere which has tremendous scope. Developers handling redevelopment projects are coming up with luxury residential offerings as the market holds good potential for this category and Mumbai has hardly any open land parcels. Also, the developers have invested substantial time and money in redevelopment projects whereby free sale portion is the only route to generate profits,” says Varma.
…..to be continued
