Redevelopment of housing societies in Mumbai to add supply homes worth Rs 1.3 lakh cr: Report

New Delhi, Sep 10 (PTI) Mumbai region is witnessing redevelopment of many housing societies, resulting in fresh supply of more than 44,000 homes by 2030 worth Rs 1.3 lakh crore, according to Knight Frank.

On Wednesday, real estate consultant Knight Frank India released a report, stating that Mumbai's redevelopment landscape is undergoing a structural transformation.

"A confluence of policy incentives, assetlight developer strategies, and capital market alignment has made redevelopment not just viable, but strategically compelling," the consultant said.

Knight Frank has estimated that the current society redevelopment projects in Mumbai (MCGM) region would add a total of 44,277 new homes at the value of Rs 1,30,500 crore.

The consultant noted that a total of 910 housing societies have signed development agreements (DA) since 2020, unlocking nearly 326.8 acres (1.32 million square metre) of potential land area, based on FSI utilisation norms and average unit sizes across the regions.

Knight Frank also reported that an estimated 1.6 lakh housing societies were over the age of 30 and eligible for redevelopment.

Shishir Baijal, Chairman & Managing Director of Knight Frank India, said, "Society redevelopment in Mumbai is both inevitable and essential, given the city's limited avenues of greenfield growth and the constant rise in demand." Redevelopment has significantly reshaped the dynamics of several micro-markets and remains a critical driver of Mumbai's urban renewal, he added.

As per the report, Western Suburbs, including high density population locations of Bandra to Borivali, could see an addition of 32,354 new homes forming 73 per cent of the total addition to stock from society redevelopment.

South Mumbai would add 416 new homes from the redevelopment of societies.

Gulam Zia, Senior Executive Director'“ Research, Advisory, Infrastructure and Valuation, Knight Frank India, said, "Our assessment suggests that in markets below Rs 40,000 per sq ft, developers should not share more than 30-“35 per cent of the total area with the society. This may increase to 35-“40 per cent where prices range between Rs 40,000 and Rs 60,000 per sq ft, and up to 50 per cent in locations priced over Rs 75,000 per sq ft." "Beyond these thresholds, cashflows lose flexibility and projects become vulnerable. Both societies and developers must therefore plan with adequate buffers so that if the cycle tilts downward, there remains enough room for redressal and completion," Zia said.

As per the report, the state government is expected to generate estimated revenues of Rs 6,500 crore on account of the sale of the free sales from the society redevelopment in the next 5 years.

Additionally, the free sales will generate goods and services tax (GST) of estimated Rs 6,525 crore in the same period. PTI MJH TRB