Mumbai Real Estate

Mumbai Real Estate

Mumbai Real Estate

Mumbai Real Estate

Mumbai Infrastructure

Mumbai Infrastructure

Mumbai Property Sector

Mumbai Property Sector

Mumbai slips in global office rent sweepstakes

London's West End continues to be the world's most expensive location for hiring commercial space while Moscow and Tokyo have risen two places each, pushing Mumbai to the fourth spot, according to the latest survey of global office rents by CB Richard Ellis.

Office space in Moscow costs an average of US $232.37 per square foot per year compared with US $299.54 in the West End of London, CB Richard Ellis said in the survey. The other costliest markets are Inner Central Tokyo, Mumbai and Outer Central Tokyo.

Office rents in the Russian capital jumped by an average of 93% in dollar terms in the 12 months ended March 31, the second-biggest gain among 173 cities tracked by CB Richard Ellis. Moscow overtook Mumbai, where rents gained 41%.

"Office occupancy costs are continuing to defy sluggish economic conditions and the credit crunch as they rise faster than global inflation," Raymond Torto, CB Richard Ellis's chief economist, said in today's report.

The cost of occupancy, which includes service charges and taxes, jumped 94% in Vietnam's Ho Chi Minh City, more than any other location. It was followed by Moscow, Singapore, Nicosia and Oslo.

Mumbai Realty - cooling down?

In what could be a sign of things to come in Mumbai's overheated real estate market, two of the five plots at the Bandra Kurla Complex (BKC) put on the blocks have found no takers. While the development may cheer those who wish to buy new homes in Mumbai, the lukewarm response to the auction spells bad news for the seller i.e. the Mumbai Metropolitan Region Development Authority (MMRDA). According to reports, MMRDA received Rs13.22bn from two residential and one commercial plot as against Rs27.9bn the authority earned just three months ago for similar deals. Two plots, both with a reserve price of Rs 3 lakh per sq. m. - a 7,131 sq. m. commercial plot and a 6,402 sq. m. plot meant for a club house - had absolutely no takers. The third, a 5,951 sq. m. commercial plot, went to sole bidder Jet Airways for Rs8.26bn. Jet's winning bid of Rs3.44 lakh per sq. m. was about 10% more than MMRDA's asking price. Meanwhile, Starlight System - a collaboration of Ajay Piramal group and Suntech Realty - quoted three times MMRDA's asking price for two residential plots measuring 7,050 sq. m. The company beat eight other bidders by quoting a record price of Rs 3.52 lakh per sq. m., making it the biggest residential deal for MMRDA till date.

Mumbai urban land ceiling act repeal will ease up space shortage

India’s most important city finally has a good shot at urban renewal. On Thursday, lawmakers in Maharashtra, of which Mumbai is the capital, repealed the three-decade-old Urban Land Ceiling Act, voiding the state’s claim on as much as 500ha (1,234 acres) of private property.
Analysts say the actual amount of vacant land held in violation of the law, although not identified by the government for acquisition, may be 10 times that figure. If all this land becomes available for redevelopment, the city’s acute space shortage will surely ease up. Tenants in Mumbai offices now pay higher rents than their counterparts in the financial districts of London, New York and Tokyo.
The full impact of the change may take a while yet.
“The land needs to be cleared up and approvals have to be taken for development before actual construction can take place,” says Anshuman Magazine, managing director for South Asia at CB Richard Ellis Group Inc., the world’s largest commercial real estate broker.
It is, nonetheless, a change with far-reaching consequences. The Indian government has an ambitious plan to turn Mumbai into an international financial centre. That will require everything from new office towers and apartment buildings to schools, markets and art galleries. All of that has to be accommodated in a city built on a narrow peninsula protruding into the Arabian Sea with limited land resources. Freeing up the property market will go a long way in making Mumbai a financial centre that can compete with more established rivals.
A lousy law
The Urban Land Ceiling Act was enacted by Parliament in 1976 during a 21-month period of emergency rule by then prime minister Indira Gandhi, who suspended civil liberties, put opposition leaders in prison and muzzled the press. The legislation said that any landowner in possession of more than 500 sq. m of property in a class A city, such as New Delhi and Mumbai, would have to surrender the excess property to the state so that the urban poor could be rehabilitated.
However, the law also specified the escape routes. It cited a number of conditions under which the government could be lenient in applying the ceiling, provided landlords ask to be exempted. And thus began a sordid chapter in wholesale bribery. The state acquired very little land; and where owners failed to protect their property through bribery, they went to the court. The real estate market froze up. Rents rose. Good land remained vacant or underutilized.
Mumbai’s pricey loss
The poor and the middle class lost out on affordable housing. Of the 19 million people, who reside in Mumbai and its suburbs, half live in slums. In 1999, almost a decade after India began opening its economy and started correcting the mistakes of its socialist past, the federal government took a bold decision to repeal the land ceiling law.
Once the government had won parliamentary approval for the plan, it advised the states to follow suit and change their own laws accordingly. Most states acquiesced; Maharashtra, and a few others, held out. To get the laggards to fall in line, the government in New Delhi dangled a carrot in front of them. States were told they could tap Union government funds to rebuild their creaky urban infrastructure, provided that, among other things, they removed the draconian land ceiling law from their statute books.
Long overdue
The repeal of the land ceiling law in Maharashtra was “long overdue,” says Magazine of CB Richard Ellis.
The restrictive legislation choked Mumbai just as it was straining to expand. Mumbai, which looked both listless and hopeless even until the late 1990s, began its comeback after the Indian economy, and the stock market, came out of slumber in 2004. This year, a survey of global centres of commerce by MasterCard Inc. put Mumbai in 10th place—ahead of Shanghai, Hong Kong, Sydney, Singapore and Zurich—in “financial flows”.
Already, the National Stock Exchange, based in Mumbai, is the world’s second most active market for single-stock and index futures trading. The cash segment of the equity market has traded an average $4 billion (Rs15,920 crore) worth of shares daily this year, compared with less than $800 million five years ago. The currency market, too, is in the midst of an unprecedented boom. India’s daily foreign exchange turnover in April was $34 billion—almost a fivefold increase since 2004, the Switzerland-based Bank for International Settlements noted in a recent study.
Bollywood, Mumbai’s movie industry, is also doing much better now than a few years ago. All this means more business and jobs for Mumbai, and greater pressure on the city’s cramped real estate. Even tycoon Mukesh Ambani has had trouble this year with the ownership of the land, where he wants to build a house. And Ambani is the richest resident of Mumbai—or rather, one of the wealthiest denizens of the planet—with a net worth of about $49 billion, according to Forbes magazine.
That should tell you how tough it is for ordinary millionaires—the poor investment bankers—to find decent accommodation in the city. Maybe now they will have better luck.

Via Mint

IVRCL Infrastructures - BUY, Ulcra repealed - Event Update

IVRCL Infrastructures - BUY, Ulcra repealed - Event Update