BW Communities

The Height Of Prices

BW Online Bureau Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[LEADING TOWERS: The Imperial is today benchmarking south Mumbai’s luxury residential realty (Pic by Subhabrata Das) The twin cylindrical towers below cumballa Hill in South Mumbai have become a landmark. Driving down the Worli sea face or looking north from Marine Drive, the 60 floors sprouting into the skyline cannot be missed. Two conical tops for the buildings are yet to come, which when in place will make them the tallest structures in the country. Dilip Thakker, one of the promoters of ‘The Imperial’, as the under-construction project is known, says with a wry smile, “We have to thank those who opposed the project. The delay has given us a windfall.” Thakker is referring to the NGO and ‘citizen’ protests that had delayed the project. Related Stories The Height Of Prices 'Increase Supply' Click here for more stories on Infrastructure Amit Thakker, his son, who handles marketing for the Shapoorji Palonji-Thakker joint venture, says the current asking rate is Rs 34,000 a sq. ft. At lower levels, a recent sale was at Rs 27,000 a sq. ft. There are a couple of five-bedroom, 10,355-sq. ft flats on the 49th and 53rd floors. If Amit Thakker gets his asking rate, they will cost the buyer a little over Rs 35 crore each. In many ways, The Imperial represents the surrealistic spectacle being played out in rich south Mumbai’s realty market, where prices are bucking the general downturn to touch new highs. Little supply of super-luxury flats and a lot of people with money to burn may not fully explain the prices here that are as sky-oriented as The Imperial. Horizontal To Vertical The Imperial itself has a chequered history. Interestingly, the project, started in 1997, is a slum rehabilitation scheme. The project promoters have housed around 2,500 slum families of M.P. Mill Compound, who were living on 13 acres of government land, into 15 rehab buildings. The quid pro quo is that the promoters have been permitted to carve out five acres for The Imperial, whose 228 super-luxury flats will give them back not only their investments, but also a handsome profit, they hope. Construction has been long and tiresome, as the project was stopped in December 2004 after it was seen as an environmental hazard. Those with flats atop the Cumballa Hill protested as the two monstrosities were blocking their panoramic view. Others said, the hill might collapse. After long court battles and a certificate from IIT Mumbai and L&T, the project trudged on. Detractors of the project say that on the pretext of a slum rehab scheme, the promoters have got hold of government land for free. Amit Thakker says that the developers, S.D. Corporation has invested Rs 175 crore in rehabilitating the slums. Total project cost is over Rs 700 crore. A board in the site office says the interiors of The Imperial will cost Rs 104 crore. Room For Affordable Housing After achieving the first close of $100 million for its India-specific real estate fund recently, private equity player Actis is close to signing a few mid-segment housing projects. Actis’s real estate division managing director Chanakya Chakravarti is bullish on affordable houses priced between Rs 30 lakh and Rs 70 lakh per unit. “The demand is well documented in the affordable housing segment. Though a lot of people want to work there, very few are addressing it,” says Chakravarti. “In the last 12 to 18 months, the action has largely been in the premium segment. When the correction comes, it is that end which will be impacted first.” Even as private equity players race to raise money for Indian real estate, there is a dearth of bankable projects. Chakravarti says that’s why Actis has decided to focus on areas like emerging business destinations. Whether Actis’s strategy pays off is yet to be seen, but there is a need for more affordable housing and non-IT commercial projects in the country. New Property Price Points Beyond the social disputes, The Imperial is today benchmarking south Mumbai’s luxury residential realty. “It is a new-generation building with aluminum cladding,” says project architect Hafeez Contractor. “The USP is we give apartment owners a breathtaking view in three directions.” From Level 12 to 39, the interiors are by Pinakin Patel. In the upper reaches — Level 49-54 — interiors are by New York-based architecture and interior design firm Craig Nealy Architects . Take your pick at Rs 34,000 a sq. ft! Even as news flows in from centres such as Whitefield in Bangalore and Gurgaon in Haryana that real estate prices are dipping, Shapoorji and S.D. Corporation are pushing up their rates. Others in Mumbai’s luxury segment are not going slow either. DSK Corp, which has constructed a pencil-thin, 32-storey tower called ‘Durga Mata Towers’ near the Ambani family building ‘Sea Wind’ in Colaba, sold its last apartment — a duplex measuring 4,046 sq. ft at Rs 5,000 a sq. ft — for a cool Rs 20 crore! Sumit Arora, marketing chief of DSK, says the company was holding back on the last of its duplex flats on the 28-29 floors as it was hoping to get a price of Rs 60,000 a sq ft. Unitech has tied up with Rohan Developers in south Mumbai for a few upscale sites, including one on Marine Drive’s Chowpatty and another on Altamount Road. “When these come into the market, bookings are expected to start at Rs 35,000 a sq. ft,” says Akshaya Kumar, head of broking firm Parklane Properties. But there are bigger jaw-droppers coming. A super-luxury tower on Mumbai’s posh Pedder Road, a JV between Ispat Industries and builder Sameer Bhojwani, is ready; it starts at Rs 75,000 a sq ft. There are only 18 duplex flats of 6,000 sq. ft and more. Bhojwani has not sold anything yet, it is believed, but when he does, each scalp will be worth Rs 45 crore! DSK’s Arora says that builders could afford to push up prices in markets such as south Mumbai as there is very little supply of super-luxury flats while there are many who have the money to pay for it. Yet, the stupendous rise in prices in south Mumbai in a correcting market has unnerved even the most cynical property pundits. Speculation has it that builders are shoring up property values by calculated leaks of a few freak, big-ticket deals. Last November, Citibank sold a flat in NCPA Apartments on the Marine Drive waterfront for Rs 34 crore, that is at a rate of over Rs 97,000 a sq ft. The deal created a buzz in the property market and helped jack up prices further in south Mumbai. Many of these purchases involve those in the realty business themselves. Sameer Gehlaut, executive director of Indiabulls, is believed to have pulled off a purchase of an apartment in developer Suresh Raheja’s famed Chattan Bunglow project on Malabar Hill for a price close to Rs 1 lakh a sq. ft. Two years earlier, another Indiabulls director, Gagan Banga, bought a flat in Cuffe Parade’s Maker Towers B from Citibank for Rs 7.2 crore, a rate of Rs 37,500 a sq. ft. In January 2006, he created a new price point. Now, Gehlaut’s Chattan Bunglow purchase has pushed the price point further for 2008. “Word about some of these very high-value buys is selectively spread by some developers to create new price points,” says Akil Hirani, managing partner of legal firm S.B. Majmudar & Co, which handles several real estate projects. Like The Imperial’s imposing towers, realty in south Mumbai only seems to be moving skywards! gurbir.singh@abp.in (Businessworld issue 11-17 March 2008)  