Developers are realigning strategies to meet market requirements in Mumbai

With developers focusing on timely execution, over Rs 4,000 crore worth of ready-to-move-in luxury residential inventory is available in the south and southcentral zones of the megapolis as against Rs 2,800 crore a year ago, say industry experts. According to industry veterans, luxury residential projects worth Rs 75,000 crore have faced delays up to seven years due to various reasons, including lack of timely approvals among others in the prime locations of the island city alone as of end-March forcing all these projects to set fresh completion deadlines in their Mahara listings.

"Construction delays happen due to several reasons, ranging from liquidity crisis, delay in approvals, litigations to downright mismanagement. Also, developers are declaring longer-than-usual timelines for completion due to Rera stipulations with some of them still unable to hand over the projects on time," Anarock Property Consultants director Ashutosh Limaye told PTI. As per statistics, the ready-to-move-in stock were worth Rs 2,500-2,800 crore as of March 2018, which has jumped to over Rs 4,000 crore as of March 2019, mainly due to faster execution.

Ultra-luxury projects are coming up in south-central areas spanning Prabhadevi, Mahalaxmi, Lower Parel and Worli of the megapolis. Luxury residential inventory in these markets ranges from Rs 7 to Rs 80 crore comprising 3/4BHK units along with half-floor and full-floor plates offering beyond 10,000 sqft.

"Such projects are sold for their expertise, advanced technology along with faster delivery and premium offering and such offerings does create goodwill for the brand in the long run," says Omkar Realtor's founder and managing director Babulal Varma. He further says they delivered the first phase of two towers of their Omkar 1973 at Worli almost eight months ahead of the deadline and now has limited ready-to-move-inventory.

Maharashtra Societies Welfare Association president Ramesh Prabhu opines that it is in realtors own interest that they deliver on time. "Unless there is an emphasis on faster deliveries the situation is not going to improve. Developers need to walk the extra mile to ensure that trust is brought back," he adds.

According to rating agency Icra, even as residential real estate is still facing a slowdown, large players have seen considerable traction in sales during April-December of FY19, thereby increasing their market share. "Given the current market conditions, developers are realigning strategies to meet market requirements and their focus has shifted on right-sizing and right-pricing which have boosted sales. Buoyed by change in sentiment and signs of a possible long-term recovery, large publicly traded players have increased their pace of project launches.

"The pace of execution of ongoing projects has also been simultaneously maintained, given the increasing preference for completed inventory," Icra's Shubham Jain said in a recent report. Rustomjee group's Kaizad Hateria opines that for the luxury residential segment, the share of end-users is on the higher side due to location and unique product offering.

"Compared to our under-construction projects, we have seen huge demand for the ready-to-move-in inventories to the tune of 80 to 92 per cent. Today we have just about 11-odd units remaining at one of our three almost-completed projects in the city," he adds. Echoing similar views, Sheth Creators' Hiral Sheth says they have managed to sell around 98 per cent of the ready-to-move-in inventory at Vasant Oasis, which is one of the few gated communities with all the high-end luxury.

"These numbers clearly indicate that demand is high for ready-to-move-in units," he adds.

(With inputs from agencies.)