by THO
Redevelopment of old buildings into modern condos with all the amenities that a buyer can dream of was the flavour of 2024. Several listed real estate developers added newer redevelopment projects to their portfolios. So popular was the segment that developers from as far as Bengaluru and now Delhi-NCR decided to cash in on the trend.
Limited greenfield land was available in the financial capital, and the lure of high margins drew developers from across the country to revamp ageing buildings and slums.
What is redevelopment?
Several old buildings are being redeveloped in Maharashtra, including Mumbai, Pune, and Nagpur. Mumbai’s market predominantly depends on redevelopment for fresh housing supply as land is scarce. In Mumbai alone, around 10,000 old buildings require redevelopment.
The Maharashtra Apartment Ownership Act (MAOA) allows for redeveloping old society buildings, provided that at least 51% of the members approve the exercise. Under the redevelopment model, real estate developers usually sign a development agreement with unit owners in these old structures.
The developer promises extra area to each flat owner after redevelopment. In exchange, the developer can utilise the remaining unused Floor Space Index (FSI) of the plot and build additional homes to sell at a premium in the open market. Additionally, in Maharashtra, the government has a policy for self-redevelopment, where society members can redevelop the society on their own by appointing the required manpower and skills.
Major redevelopment announcements in the Mumbai real estate market in 2024
In 2024, hundreds of old buildings underwent redevelopment in Mumbai.
Here is a list of five prominent real estate developers who announced redevelopment projects.
1. Oberoi Realty announced a redevelopment project in Bandra
Mumbai-based listed real estate firm Oberoi Realty announced in July that it had agreed to develop and redevelop a land measuring approximately 2576 sq m located at Carter Road, Bandra (West) in Mumbai.
The company had announced that it expects to generate a free sale component of around 40,000 square feet (RERA Carpet area) from the development and redevelopment of the said land, as per the extant provisions of Development Control & Promotion Regulations for Greater Mumbai, 2034.
2. Raymond Group announced its first project in the redevelopment segment in Mumbai
Raymond Realty, the real estate arm of Raymond Group, announced its first project launch in the Mumbai real estate market in February 2024. The project in the Bandra East area of Mumbai involves redevelopment of 10 old buildings. The company named the project ‘The Address by GS, Bandra’. It has an estimated development value of over ₹2,000 crore and consists of developing a 0.7 million sq ft carpet on a 2.74-acre land parcel for sale.
3. Bengaluru-based Puravankara announced a redevelopment project in South Mumbai
Bengaluru-based listed real estate developer Puravankara announced in September 2024 that it had secured the redevelopment rights of a housing society named Miami Apartments at Breach Candy in South Mumbai.
The company also announced that it would be redeveloping four more societies in the Andheri area of Mumbai.
“The south Mumbai housing society is spread over 2,000 sq m of land> We are marking our entry into the uber-luxury South Mumbai market, where rates (as per market sources) are estimated in the range of ₹1,25,000 and ₹1,40,000 per sq ft,’ the company had announced in September 2024.
4. Delhi NCR-based DLF announced its foray into the Mumbai real estate market with a slum rehab project
DLF announced in November 2024 that it plans to launch the first phase of its Mumbai project in the fourth quarter of the current financial year.
In January 2024, the company had said that the project in Mumbai’s Andheri area will tentatively have apartments in the range of ₹5.5 crore to ₹7.5 crore. The company will have 3 BHK and 3 BHK plus apartments. The first phase of the project consists of 1 million square feet of development, the company had said.
5. Mahindra Lifespace to come up with a redevelopment project in Borivali
Mahindra Lifespace Developers announced in July 2024 that it had bagged a redevelopment project in Mumbai’s Borivali area. The project comprises seven residential societies with a combined revenue potential of ₹1,800 crore.
Mahindra Lifespaces aims to strengthen its presence in the Mumbai, Pune, and Bengaluru real estate markets. The company has previously announced that it was targeting a Gross Development Value of ₹45,000 crore in the coming years.
Redevelopment to be the flavour for over two decades
In November 2024, Boman Irani, CMD of Rustomjee Group, also known as Keystone Realtors, stated that redevelopment is here to stay in Mumbai for more than two decades and these projects offer massive opportunities to new real estate developers wanting to enter the space from other cities.
“I don’t lose sleep over this, as many developers want to enter this space. The redevelopment market of old buildings in Mumbai is so huge that there is no dearth of opportunities. New players will add value to redevelopment space in Mumbai,” he had said.
Mumbai witnesses the registration of around 10,000 to 12,000 properties on average in a month. According to market sources, around 10% of the agreements are for redevelopment of old buildings.
