Wish List – Mumbai 2018

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As the curtains go up on 2018, the dawn of the New Year for realty. This means it’s time to look at what can be done to give Mumbai’s realty a much needed boost.

Impact of RERA and REITs

As commercial real estate is capital-intensive it is an investment avenue and also the limited investment opportunities with regard to high-grade office assets, real estate investments trust (REITs) seem to be a boon for the Indian real estate sector. “The increased transparency and accountability that will result from this act promise to benefit housing developers, as well as home buyers. Above all, the act could go long way in restoring the broken relationship between developers and consumers,” says Rahul Nahar, Founder, Xrbia Developers Ltd. “While the environment for REITs is conducive, we have not seen any REIT listing yet. Estimates suggest that around $121 billion of commercial real estate across office, retail and warehouse segments could potentially benefit from the REIT opportunity. We could perhaps see a REIT listing next year. Pricing REIT’s at a level that is attractive for investors will be the key to the success of REITs,” says Sachin Sandhir, Global MD – Emerging Business, RICS.

Affordable Housing Push

New launches in the affordable housing segment have seen a jump of 27 percent with Mumbai taking the lead. This follows the government’s decision to give infrastructure status to this asset class, says a new report by Cushman & Wakefield that covers top eight cities across the country. Aniket Haware, Managing Director Haware Builders says, ”sales have increased 5% on year in the quarter ended September across top eight property markets, powered by a 24% surge in affordable housing. This is due to high focus of the central government on affordable housing with the scheme like Pradhan Mantri Awas Yojana (PMAY) subsidy.” Amit Ruparel, Managing Director, Ruparel Realty adds, “with the affordable housing segment receiving an industry status in the budget under the newly introduced regulation in the PMAY the sector will witness a steady rise in demand in the coming year. Moreover, from the investor’s perspective, affordable apartments are easier and more profitable to sell or rent out, which helps assure a reliable return on investment.”

Amenities that Matter           

A common dilemma faced by almost everyone is what amenities are necessary and what is not. Most people nowadays prefer projects with gymnasium, children’s play area, intercom, CCTV security, etc. In metropolitan cities like Mumbai, amenities closer to home could be costly. Ram Walase, MD & CEO, VBHC avers, “configuration of amenities have to achieve a balance between aspirations and ability and willingness to pay is a must. The customers in the affordable segment are highly value driven and, with more awareness, are capable of making right balance between aspiration about amenities and life cycle costs of a house.”

A Smart Mumbai

While Mumbai is not on the smart city list as yet, there is no doubt that much can be done to improve and build on civic amenities. Amit Wadhwani, Director Sai Estate Consultants avers, ”the planning to make Mumbai as a smart city should give residents with a proficient and reliable infrastructure, enhanced and smart quality living and economic opportunities.” The Maharashtra Government is working on various infrastructure projects which will bring in a better future for Mumbai, from the Mumbai Trans-Harbor Link (MTHL) which will enhance Mumbai’s hinterland, the Metro Lines which will ensure better transport linkages, the flyovers and other linkages including the coastal road, the tunnel that will link Borivli and Thane and RO-RO services. Dr. Niranjan Hiranandani is CMD, Hiranandani Communities says, “the Pinjal River link, which will ensure sufficient supply of drinking water to whole of MMR even in the future. So, projects by the state and central governments have already charted out a positive set of steps for Mumbai’s smart future. Developer’s need to be more conscious and responsible towards integrating sewage and waste treatment plants, rain water harvesting, recycling of biodegrade waste, ecology balance and high speed telecommunication and internet connectivity in their development plans as we incorporate and run functionally from past 30 years in over Powai and Thane projects which are already SMART in place.”

Infrastructure Impetus

The Indian government had decided to reduce dependency on bitumen (asphalt), the popular raw material for road construction, in favor of cement (concrete) for all new road projects since 2014. “The current practice of using tar dooms the city’s roads to erosion within a few months, which is why Mumbai is constantly plagued with potholes. Concrete roads require significantly reduced maintenance and do not degrade with torrential rainfall of the kind that Mumbai sees every monsoon. Nor do they become unsafe because of oil and lubricant spills,” says Anuj Puri, Chairman – ANAROCK Property Consultants. Ashok Mohanani, Chairman Ekta World and Vice President NAREDCO WEST adds “with smart planning, the city may get boost in basic infrastructure projects, healthcare, drainage and sewage line along with treatment plants etc. The city should have state-of-the-art urban planning, smart infrastructure projects which will play an essential role for the Mumbaikars. The city should fully operate on the latest information and other technology which are green. Residents staying in the smart city should have a proficient and reliable infrastructure, enhanced and smart quality living and economic opportunities.”

Quality Checks

In the last few years, there have been continuous incidences of collapsing old constructions in India. As per data shared by the National Crime Record Bureau (NCRB), more than 14,000 people have died during the Year 2010 to 2015 due to dilapidated building’s collapse. Pakshal Sanghvi, Director, Sanghvi Realty explains, “quality in construction means that the realtor delivers the clients the project as per their expectations and within the stipulated timelines. It also means that the best quality material is employed in construction. The construction should be strong enough to withstand natural calamities in addition to looking good in appearance. We also keep a documented account of every aspect of construction. Some buyers are adopting self-testing procedures such as checking the concrete mix, getting architects to assess the structure design and plaster and wall thickness test. RERA compliant projects will have to issue a 5-year warranty for the building quality.”

Water Wise

The need for Rain Water Harvesting (RWH) can hardly be over emphasized in the light of the water shortage situation which is a reality. Sankey Prasad, Founder Chairman & MD of Synergy Property Development Services, says, “rainwater harvesting can be one of the most sensible long-term solutions to Mumbai’s long -standing water scarcity. BMC plans to make rainwater harvesting, mandatory for properties larger than 500 sq. mts. Moreover, rainwater harvesting requires a simple set up with minimal investment. However, awareness about the same needs to be generated.”

This story appeared in HT Estates dated 6th Jan 2018 here:

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