Mumbai has some of the most expensive real estate in the world, but in contrast to major cities, this is a metropolis where a slum and a posh neighbourhood can share a fence. Walk out onto the balcony of a top floor penthouse in upmarket Pali Hill, where Bollywood stars rub shoulders with businessmen, and the view below could be that of shanties — thousands of roughly built shacks with corrugated tin roofs, and the smoke from camp fires cooking the day’s food.
The reasons for these extreme contrasts are many, but as with all major cities, location is important. As Manun Thakur, Director of estate agency Sangam Lifespaces puts, “Areas with better access to public amenities are more likely to be in demand.” What this means in practice is the ability to avoid the long commute, which most Mumbai’s blue collar workers and office goers have to endure twice a day. An average Mumbaikar, as the denizens are colloquially known, spends roughly three hours daily commuting to and from work. Hence living even half an hour closer to your place of employment is a luxury limited to a handful.
Manoeuvring around the city is easy, but not comfortable. Traffic jams are unpredictable due to poorly managed infrastructure, and with a density of 2,96,540 people per square kilometre, public transport is almost always packed. Local trains have been the lifeline of Mumbai but peak hours are such that commuters literally spill out of the bogies. Introduction of the monorail in February 2014 hasn’t helped much with this problem.
It is from South Mumbai that the city first developed. Nariman Point at its tip has always been a prime commercial hub; and the surrounding residential areas have gained value due to their proximity. This is where the politicians, industrialists and families with old money reside, adding to the cachet and value of owning a property in the area. It is also where you won’t find a colony of huts as easily in comparison to the rest of the city.
Altamount Road, Cuff Parade and Walkeshwar in this part are Mumbai’s most expensive addresses, attracting approximately ₹1,30,000 (about £1400) per square foot. Paradoxically, in spite of the prices being unbelievably high, they have been relatively stable since the last quarter. This in a way is an automatic price correction, but it doesn’t mean that the prices have dropped or will drop. Existing property is rarely sold, and the prices asked are too high for most buyers.
Dr Samantak Das MRICS, Chief Economist and Director — Research, Knight Frank India explains three factors that contribute to this extortionate real estate: “Being close to Nariman Point, as well as the demography of neighbours definitely increase its value. The other reason is that South Mumbai is not a big area. There are no new launches here due to lack of space, and this means that the supply is limited to resale of property. Actually, there is hardly any new land in Mumbai. The only way you can develop certain parts of the city in a big manner is either through redevelopment or through slum rehabilitation.”
Overall, the average price for a property in Mumbai ranges anywhere from ₹7,000 (about £76) per square foot to ₹1,30,000 (about £1400) per square foot, depending on its location. The city is a narrow stretch from central Mumbai, which is roughly 17km from South Mumbai, to the suburbs, which lie closer to the western coast, and finally the periphery beyond the four bridges that connect the island city to the rest of the country.
Location is of such importance that Dharavi, Asia’s largest slum, spread over two-square-kilometres right in the centre of Mumbai has real estate prices more than those of Ulwe on Mumbai’s periphery.
A 300-square-feet hut here can fetch upto ₹15,000 (about £165) per square foot, roughly twice the square-foot rate of apartments in Ulwe that require a much longer commute.
Chembur and Ghatkopar, neighbouring Dharavi in central Mumbai have come into the limelight only recently. After the 16.8km Eastern Freeway connecting Chembur to South Mumbai was opened to the public in 2012, it boosted surrounding property prices by 25 per cent. The freeway brings respite in the form of 30 minutes less travel time to Nariman Point, an area that hasn’t lost all its lustre yet. In his online column on real estate, Ramesh Nair, COO-Business JLL India writes: “We have seen a steady increase in inquiries for residential and commercial spaces close to the Eastern Freeway’s entrance and exit ramps, and developers have begun marketing their projects with an emphasis on their proximity to this key arterial route.”
Before the freeway was built, and just when real estate in South Mumbai was being exhausted, developers spotted potential in the suburbs, namely the locality of Bandra. When the MMRDA (Mumbai Metropolitan Region Development Authority) had freed half its land parcel for commercial use in Bandra Kulra Complex (BKC) in Bandra East roughly 20 years ago, it took the pressure off Nariman Point. ICICI Bank, NABARD Head Office, National Stock Exchange, Bharat Diamond Bourse, are examples of the big names that have headquarters in BKC, thus adding to its brand value. Proximity to the airport is another advantage.
Multinational corporations in BKC resulted in Bandra West being a preferred home for expats. A steady growth in the number of restaurants and pubs in the area, see throngs of youngsters populate the stretch of Carter Road and Linking Road for the diverse choice in eateries. Old structures have been renovated into swanky commercial and residential properties. Being conveniently connected to south and central Mumbai makes it the first option for young professionals looking to rent today. If these prices don’t match their budget, they move deeper towards the north.
Andheri and Lokhandwala further down the suburbs beyond Bandra are witnessing a steady rise in their prices too. One reason is the new monorail stations in the vicinity, and the other is an influx of glamorous neighbours. Mumbai being the prime city for producing Bollywood films and Hindi TV series, has maximum studios in these areas. Small screen stars find it easier to buy in these regions, while Bollywood’s top movie stars prefer Bandra West.
When asked about his clientele, Thakur says, “Our clientele ranges from one project to another. Take the suburbs of Goregaon, Andheri and Bandra for instance. In Bandra it is the level of CEOs and
such corporates, Andheri has more of business families who prefer living close to each other, and deeper into the suburbs in Goregaon our clientele is again those from the Vice President level to a successful businessman.”
It isn’t everyone who can afford to invest in Mumbai’s real estate though. Das says, “Four to four and a half times your gross annual salary should be your affordability (to buy real estate). In Mumbai that ratio of annual salary to house property for a medium-income group is seven to eight times.” Projects were launched keeping the rich clientele in mind and cost around ₹1 crore. However, the current demand falls between the range of ₹5 lakh to ₹20 lakh, widening the disparity between real estate rates and the average Indian salary. When certain areas in Mumbai showed potential for growth, developers cashed in with luxury housing projects. After the 2008 global financial crisis, property prices increased twofold by 2012. Rising steel prices and land shortage only elevated these costs.
This brings us to the question, who is the average buyer? The average customer profile is that of families who are expanding and looking to invest in a bigger home. They usually put their existing home on sale with the hope of finding something with an affordable difference in price gap.
Unable to bring the prices down due to mounting debts with banks and rising land prices due to its shortage, developers have resorted to luring buyers with gifts like new phones and gold coins, free air-conditioning units, exemption of stamp-duty, etc., all absorbed into the pricing. Further, where parking space is precious and is sold to flat owners at an additional cost, these are offered for free to the informed buyer who is all too wary of property investments today.
Sumchit Anand, Founder, Managing Director, of Acquisory Consulting LLP advises, “The 20-80 scheme is the best at this point, wherein you pay 20 per cent now and the balance on possession of the apartment.” On analysing the buying trend he adds, “Sales are only happening where the project has reached a reasonable level, say 70-80 per cent and/or the project has achieved financial closure.” It is easier to invest in a project that is underway, and people usually do their homework on a real estate company’s reputation for timely debt payments and delivery of projects.
It is questionable why a city like Mumbai that has a massive inflow of professionals, lacks pure rental units. It generates 10 per cent of India’s factory employment, 25 per cent of industrial output, and 40 per cent of India’s foreign trade, and ₹4,000 crore (US$888 million) in corporate taxes — enough reason to attract migrants in throngs who increase the demand of rental properties.
Das says, “Mumbai’s developers don’t see benefits from investing in rental housing schemes. Where the rental yield for residential properties is roughly calculated to be between two and three per cent, commercial properties fetch a 10 to 11 per cent profit margin. Residential projects in India depend on capital gain. This can be worked upon if a developer is given government incentive such as free land.”
Besides, the average mindset of any Indian family emphasises on owning a roof, as opposed to renting one. They perceive this as a safety net should financial inflow go awry. Until then, it remains a dream for many to be able to buy property in Mumbai, especially those from other cities, for life in India’s financial capital is a coveted one for the new generation.
When in Bombay…
Take a ferry from the Gateway of India (est. 1924) in Colaba in South Mumbai to Elephanta island. The 45-minute sail drops you off at the Hindu and Buddhist caves with sculptures of deities that date from the fifth to eight centuries.
Don’t miss the monkeys on the island. They are entertaining with their antics. Best not to interact with them though. Visit in the morning to avoid the rush and beat the heat. The first boat departs at 9am. Tickets are priced at ₹120 (about £12) and are available at the Gateway. An hour should suffice for a walk around the island.
Once back in Mumbai, eat at any Iranian cafe in the Fort area — a 10-minute drive north from Gateway. These cafes were opened in large numbers by the Persians who had migrated to India in the early 1900s. Since then they have been the charm of Fort, and subsequently of Mumbai. The most popular of these is Yazdani Bakery (near Fountain, Akbar Ally, Saint Thomas Cathedral, Fort). You may want to start with the very buttery bun brun maska and tea.
Down the road from Fort on Hutatma Chowk is another sculpture — Flora Fountain — that dates back to 1864. It was sculpted in honour of the Roman goddess Flora, and is a beautiful display in the evenings when lit up. Not very far from here on Shahid Bhagat Singh Road is the Lion Gate, managed by the Indian Navy. Its exterior wall depicts various elements of the sea in a dramatic mural. Unfortunately the Navy discourages you from lingering in the area, but if you hurry, you can get a quick photo.
Eat at Britannia and Company Restaurant, which is a 10-minute walk from the Navy building and has been famous for Parsi food since 1923. Don’t expect a lavish ambience though. Their bentwood furniture has sustained each passing year and so has their popularity, especially during lunch hours (noon to 4pm, after which it closes for the day). Salli boti, dhansak and berry pulao should be your choices to share. If you are lucky, 92-year-old Boman Kohinoor, son of founder will play host to you. Ever so charming, he will personally take your order and tell you what you should eat, show you his collection of the clippings of the Queen and her family, and even share stories from his past.
Travel northward and get off at Haji Ali — one of the more beautiful tombs in the city. It was built in 1918 and is about 457 metres from Mumbai’s shoreline. During Eid and Ramzan the building is lit up and eludes a warm golden glow. Eat at HajiAli Juice Center (hajialijuicecentre.in) for a taste of authentic falooda, an Indian dessert. Before this, grab a spread of Indian delectables at Swati Snacks (swatisnacks.com). This is a vegetarian restaurant known for Gujarati cuisine and other fast foods. Panki, chilla, sev puri, pav bhaji and sugar cane juice must be ordered.
A 20-minute drive from here is Siddhi Vinayak temple in Prabhadevi. It is one of the most revered places of worship in Mumbai, especially on Tuesdays when the crowd lines up for hours. After paying your respects to Lord Ganesha who sits inside, it is believed that whispering your wish into his mouse’s ear makes it come true.
Bandra, a 25-minute local train ride or a one-hour drive from Colaba is better known for its street art. Social, satirical, and trending graphics are spray painted on the walls of Chapel Road.
Eat at Punjab Sweet House (Dhiraj Arcade,84, BR Ambedkar Road,Bandra West), which is famous for chaat, a typical Indian snack.
Run by the Arabian Sea on Marine Drive, Girgaum Chowpatty, Worli Seaface, Bandstand Promenade or Juhu beach for a refreshing cardio hour.
Where to stay
Taj Mahal Palace Hotel
The iconic heritage hotel built in 1903, has 560 rooms of which 275 are sea-facing Taj Mahal Tower rooms, and 44 are suites. All rooms are provided with the availability of a fax machine
on request, multi-line telephone(s) with international direct dial facility and voicemail, and access to the 24-hour business centre. Butler service is provided round the clock to guests of Taj Mahal Tower, The Luxury Grande, Taj Club rooms, and the suites. The hotel also gives its guests mobile phones and portable printers on rent. tajhotels.com
Palladium Hotel
Formerly the Shangri-La and now the Palladium, this 165 metre high, 40-storeyed property in Lower Parel is the tallest luxury hotel in India. All 296 rooms and 28 suites are designed in Indian tikri work commissioned from Rajasthani craftsmen. The ninth floor of the hotel has four Staterooms, three boardrooms, a business centre, all of which are equipped to serve the needs of corporate guests. For leisure, one can choose from eight bars and restaurants. The Sahib Room and Kipling Bar is best for its eclectic Indian delicacies and themed cocktails. Also, the high-end Palladium Mall is accessible via a doorway that opens from within the hotel. palladiumhotel.in
Leela Hotel
A five-minute drive from Mumbai’s terminal-2 international airport, and 15-minutes from the domestic airport, is The Leela Mumbai. The property, spread over 11 acres, includes 30 suites of four categories, 12 Royal Club Parlours and 45 Clubrooms. The Royal Club rooms on the seventh and eight floors offer free Internet access, as well as two-hours free access to the meeting rooms per day. The hotel also has a Business Stay offer that includes breakfast, high-speed Internet and two-way airport transfers. theleela.com
