Mumbai On An Expansion Spree

Mumbai seems to be on a business expansion spree. Lately, various big names have announced about their plans to diversify and branch out. Most recent among them is the Mumbai-based real estate developer Nirmal Lifestyle. Nirmal Lifestyle will be inviting leading Indian and international institutions like ICICI Venture, HDFC Realty, Goldman Sachs, Lehman Brothers and Deutsche Bank to buy a stake in its property projects. Nirmal Lifestyle has announced plans to invest a staggering $5 billion over 10 years in an endeavor to set up five integrated townships. Three of the proposed five townships would come up in Mumbai.

Mumbai Airport slum dwellers can finally breathe a sigh of relief. The government has given its approval for the Mumbai Airport Slum Rehabilitation Programme to real estate developer Housing Development and Infrastructure Limited (HDIL).

Apart from real estate, gold markets too are not left far behind when it comes to expanding their physical existence. Mumbaikars can be ready to welcome five new malls that will cater exclusively to their jewelry needs. Jewel World, Mumbai’s first jewelry mall is by Vardhaman Developers. Borivaili, Santa Cruz, Ghatkopar and Mulund are where these malls will be launched within a year’s time.

Although Indian realty market is witnessing a compounding growth, surveys and reports present a different picture of Mumbai. A recent report by Citigroup Global Markets suggests that realty stocks will have to face tough times. The crunch situation is due to several factors like rising inflation, a sudden decline in property dealings, supply risks and stagnating prices.

On the other hand, a report by Hong Kong-based human resources consultancy ECA International ranks Mumbai as the city that sees second highest residential rent growth in Asia. Mumbai’s hotel room rates are way more than the global average. Mumbai has also been tagged as the city that has recorded world’s biggest rise in industrial rentals. This makes Mumbai world’s sixth most expensive locations when it comes to renting an apartment. Mumbai has left behind cities like Shanghai, Paris, St Petersburg and Dubai when it comes to rental fee. Prices of furnished and semi-furnished houses are aiming to touch the sky, every increasing day.

The record rise of 32 per cent rise in the price of steel since the last three months has brought to light other areas of concern. ‘The Builders’ Association of India’ (BAI) have put across doubts with respect to time-bound projects, including the ones connected with Commonwealth Games-2010. BAI has already convened a meeting and several press conferences to suggest possible measures the government can take to put an end to this unforeseen hike in prices of steel and steel items mainly used in the construction and infrastructure projects.

The surprising fact is, given the areas of concern and hike in prices, Mumbai continues to be a hot property destination, attracting Indian developers and those from foreign locations.