Property rates in Mumbai moving up?

What is it about the south that has become a STATE OF MIND for the upwardly mobile? The south of any city, South Mumbai for instance, has become a brand that can give top luxury marquees stiff competition. You can sport Gucci shoes, wear Chanel shades and even write your name with a Cartier, but nothing overshadows the flaunt value of your address. And all this is perhaps for a very special reason.

Suave residential areas in the south of many cities reflect a style that is rare and distinct. Be it the open, green spaces in South Delhi’s posh Shanti Niketan area or the sea-facing balconies of Nariman Point and Churchgate in South Mumbai, there is something about these locations that make people swoon.

Perhaps that is also the reason why prices have gone north in most of these south lying areas even though in other locations, prices have stabilised after interest rates peaked. So what Upper East Side is to Manhattan or the western Kensington district is to London — is what ‘south’ is to Delhi, Mumbai and even Chennai and Kolkata. In short, in India ‘south’ is where the rich and famous or anyone aspiring to be so would like to be. The south of any metro — South Mumbai for instance — has become a brand that can give top luxury marquees stiff competition.

So SundayET decided to go deeper south and probe why prices in these areas keep going north in Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad. Starting with the Capital, premium and posh is definitely what the southern hub is all about. Consider this: An apartment in Vasant Vihar built on a 400 sq yds plot was recently sold for a whopping Rs 5 crore! Likewise, a villa measuring 215 sq yds in Asiad Village was sold for as much as Rs 3 crore!

Easy road access, proximity to Central Business District (CBD) locations and nearness to the best educational, health and recreational facilities have helped in making these areas prime in the Capital. Moreover, the growth of other office locations in South Delhi such as Bhikaji Cama Place and Nehru Place are other reasons which have further placed these residential boulevards on the wishlist for many top corporates and entrepreneurs.

While locations such as Shanti Niketan, Westend easily command approximately Rs 30,000/sq ft followed closely by Vasant Vihar and Anand Niketan at Rs 26,000/sq ft, average capital values in Greater Kailash I&II, South Extension, Hauz Khas and New Friends Colony start at Rs 14,000/sq ft, according to figures exclusively tracked for SundayET, by global real estate consultancy Cushman & Wakefield (C&W).

In Mumbai too, south and south-central locations such as Nariman Point, Churchgate, Colaba, Altamount Road, Malabar Hill, Napean Sea Road and Breach Candy are some of the most sought after residential addresses.

C&W pegs the average capital values in areas such as Colaba, Cuffe Parade and Nariman Point at Rs 24,000/sq ft; it is close to Rs 29,000/ sq ft in Malabar Hill, Napean Sea Road, Breach Candy and Peddar Road. The capital and rental values have increased here by almost 20-26% over the last 12 months. Other than the high prestige value attached to them, areas in South and South Central Mumbai have also been historically preferred as residential locations due to their proximity to the CBD. Not to forget the long sea-face that is an added incentive for the city’s elite to set up residences!
In trying to explain the reason behind this southern comfort, Aditi Vijayakar national head, transaction services – residential, India, C&W says: “Prime destinations like these continue to be expensive and in demand because, typically their occupants have ties with their homes and neighbourhood which may include friends, family, clubs, neighbours etc. Land is also not easily available in these localities for redevelopment — if it is, it comes at a premium, thus ensuring that a new apartment or home constructed here will be offered at a high value which again restricts sale to a high-end market.”

Agrees Rohtas Goel, CMD of real estate company Omaxe: “Prices for residential apartments have been going up in South Delhi and South Mumbai. This is only natural due to the high holding capacity of individuals in such locations, so a high interest rate does not really impact them in an adverse manner.”

Of course, Delhi’s ‘south’ phenomenon is a somewhat a recent development as Surinder Jodhka, professor of Sociology at JawaharLal Nehru University (JNU), points out. “In the case of Delhi, south came much later. It’s a place where the new elite settled in post independence. Such a phenomenon that sees South as premium locations in metro cities is only incidental, based on the way settlement patterns emerged after independence,” she says.

And the snob value around the southern districts is not just confined to Delhi and Mumbai. Good connectivity, mass transit facilities and nearness to the CBD have made Alipore and Ballygunj prime residential areas in South Kolkata. These areas have been the preferred residential locations for industrialists and top executives over generations.

Select residential projects seen in these areas have not added significantly to the supply. With no land parcel for further development and very little vacancy, the demand outstrips the supply in these locations. According to C&W, the average capital values here range between Rs 6,000/sq ft to Rs 7,000/sq ft and have witnessed an average increase in capital values of 20-28% in the last one year.

Boat Club in the south of Chennai too, is an elite address and offers a unique amalgam of traditional and modern architecture. Traditionally, with only a plotted development with independent bungalows, most of the apartments in this area are well constructed with a keen sense of material and design. The capital values have gone up here by approximately 50% in the last 12 months, according to C&W figures. The average capital values stand at Rs 13,500/sq ft for an apartment area of 2000 sq ft.

Southern suburbs in the Garden City of Bangalore include areas such as Koramangala, BTM Layout, Bannerghatta Road, Hosur Road, Jaynagar, JP Nagar and Wilson Gardens. Certain areas within Koramangala, Jayangar T Block and couple of phases in JP Nagar are considered among the prime residential areas in the city.

Land and bungalows in these areas are highly sought after by the high income group (HIG) as they are considered an asset to acquire or hold on to. That also explains why an independent bungalow measuring 4,850 sq ft located on a land area of approximately 10,000 sq ft was sold for close to Rs 110,000,000 in Koramanagala!

Hyderabad is no different. In Hyderabad, the area around Barketpura in the south is expected to see some rapid movement with the proposed new Airport at Shamshabad (extreme south of Hyderabad) expected to be complete in the next 12-15 months. The land rates in this area have seen an increase of about 10- 15% over the past 12 months, says C&W.

Commenting on the aspirational aspect of addresses in the southern parts of Indian cities, Kunal Banerji, president, marketing, Ansal API, says: “One can rub shoulders with the rich and mighty, hobnob with the fashion conscious, converse with the polished elite and also bring in some old style. In that sense, it is extremely aspirational for some to own a house in the south locations of metros.” So think again before you say prices are going south. What you probably mean is that they’re zooming up, at least in the south that is!