BOMBAY, 22 December 2003 — Housing finance companies are currently vying with each other to offer the cheapest interest rates to the consumers. And for the consumers in India, especially Bombay has never been easy. So this week, we take look at the real estate scenario in Bombay, the commercial capital of India.
There is always a lot of apprehension about buying property at the right price and at the right time. For those who have been waiting for the right price to buy that dream house in Bombay, the news is that real estate prices in Bombay are not expected to rise any further.
This is because of the huge supply of developed property that is coming into the market. Within a radius of one kilometer in Worli, nearly 20 lakh square feet of property is being developed. This includes: Former mill lands owned by Mafatlal, Glaxo and Metal Box. In addition to this huge chunk of property being developed in central Bombay there were huge developments taking place in business districts around Bombay including Vashi. But demand for property in south Bombay is expected to be lower.
There is indeed a lot of property which is now coming into the market and this is going to keep the prices stable if not allowing it to rise. There is news that the Aditya Birla Group is planning to sell real estate properties in the city shortly, after moving all its executives to the new corporate headquarters at Worli in Central Bombay. The conglomerate is looking at the option of selling a few properties since the new headquarters are spacious enough to accommodate all its employees. The group’s own properties include 9,000 sq ft at Sakar Bhavan and 4,000 sq ft at Dalamal House in Nariman Point. According to real estate industry sources, the current value for these buildings alone is in the range of Rs.110 million-130 million. The real estate prices in Nariman Point have come down to Rs.8,000-Rs.10,000 per sq ft. Those familiar with Bombay will recollect that the Birla group bought Rhone-Poulenc house, a five-story building in Worli, from the Ajay Piramal group in 2001 for Rs.850 million.
There is also news that the lucrative GlaxoSmithKline Worli property, amongst the most sought-after sites in Bombay, has gone to the ICICI Ventures-Oberoi Developers combine for Rs.1,080 million.
This is not all. According to state government officials, around 500 acres of mill land will eventually become available for development purposes. In addition to this, the National Textile Corporation (NTC) has floated tenders for selling its 226 acres of surplus land in Bombay. There is also news that Bombay Port Trust (MPT) wants to sell some 600 acres of land.
So with all these activities going on, are there any major price slumps expected? Well, according to global real estate consultants Cushman & Wakefield, the real estate market in Bombay is unlikely to see a major firming up of prices in the coming months, despite the revival in Indian industry and boom in the stock markets.
