Take any prominent city in India, Mumbai in particular, and you will find old, dilapidated, and often poorly maintained buildings dotting its skyline. Unlike other cities, many of these Mumbai buildings continue to be occupied even though they are at their end-of-life stage, are almost impossible and uneconomical to repair and are a genuine threat to the life and limb of its residents. Some particularly mid-rise structures lack basic facilities like lifts despite location advantages.
However, these buildings are the key to addressing one of the most pressing problems of Mumbai’s real estate - land shortage. This is where redevelopment comes into play, helping address both demand and supply of land and houses in one of the priciest real estate markets in the country.
As per one estimate, the city has at least 14,000 buildings that need massive repairs. Over 25,000 societies in the city, as per the Maharashtra Housing and Area Development Authority (MHADA) data, are keen on redevelopment.
For Mumbai’s real estate, redevelopment is not a novel concept. Realtors, developers and even the government have courted redevelopment for over a decade now but often those stories were marred by tales of delay and projects being abandoned mid-way.
However, thanks to the new generation buyer sentiment that is uncompromising on the quality of life and living space, there is a tectonic shift in the way Mumbai’s redevelopment story is shaping up. This renewed interest and surge in redevelopment being scripted by the next-gen is precise, phased and punctual, and promises to benefit homeowners, developers and new customers.
Since old societies often tend to be spacious, redevelopment allows developers to take advantage of its full FSI potential on net plot area as well as fungible compensatory FSI. Redevelopment provides residents of old housing societies with additional facilities like designated parking, gardens, children's play area, gymnasium and swimming pool depending on the terms of the agreement. More importantly, it gives them a quality house that is well constructed, spacious and has a better market value.
However, as mentioned earlier, this demand for redeveloped societies is led by the young buyer who is fanatic about quality of life. Hence, these buyers, often millennials, are looking for homes that are closer to their workplaces, have quick and easy public transportation services and provide other excellent infrastructure. At the same time, they are unwilling to compromise on amenities and hence resist moving into or buying homes that are over five decades old even if they boast of excellent locations.
This is why more and more young homebuyers are looking at redevelopment projects, as these projects tick almost all their checklists when shopping for a home. A survey by the Confederation of Indian Industries (CII) and Anarock titled The Housing Market Boom found that millennial are driving India’s real estate demand with 52% choosing it as the best asset class and Mumbai’s redevelopment saga is set to reap the benefits too.
