Big names beware. Mumbai's real estate market is being transformed by a crop of new-age builders
Tucked away deep inside Bandra-Kurla Complex (BKC), Mumbai’s newest business district, and overlooking the dirty waters of Mithi River, Signature Island doesn’t really sound like a posh address. But that has not stopped the Maximum City’s well-heeled from shelling out Rs. 25 crore or more for an apartment double the size of a basketball court.
A Vertical City
Three factors are driving the builders and affluent buyers to the suburbs. The floor space index, which measures the size of construction allowed relative to the land size, is twice as much in suburbs as in the old city. Second, decades-old housing laws stipulate paltry rents in the city, where it is nearly impossible to evict tenants. Third, the land supply comes in a trickle while migrants are pouring in.
Along the way Khetan took some calculated risks. Sunteck won the BKC plot against competition from the likes of Raheja and Naman. Sunteck’s bid was the highest, but Managing Director Khetan figured he could recover it by charging a 20 percent premium over the rates for commercial property. On the other hand, he also knew when not to spend. He conserved the Rs. 500 crore he raised through private equity when he thought the market was over-heated.
(This story appears in the 19 February, 2010 issue of Forbes India. To visit our Archives, click here.)