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Foreign Tourist Arrival (Mn)
Real Estate Sector in Mumbai
Mumbai City
Mumbai is the capital city of Maharashtra and has a population of 18.9 million (per the 2001 census) and has
increased to 20 million by 2011. Mumbai is the capital city of the state and is also the commercial,
entertainment and fashion capital of India. Mumbai is made up of seven connected small islands and the
suburban area of Salsette Island. It is well-connected by air, road and rail to other major cities in India. The
Mumbai Metropolitan Region covering the city, the surrounding suburbs and municipal councils, has a
population of 18.9 million. Mumbai has witnessed an increase in its population in the island city as well as the
surrounding municipal corporations of Thane, Navi Mumbai and Bhiwandi-Nizampur that form part of the
larger agglomeration, the Mumbai Metropolitan Region. The rapid growth in population has led to a shortage of
housing and informal and poor quality housing. (Source: Official website of Mumbai Metropolitan Region
Development Authority-
http://www.mmrdamumbai.orgf
)
The Island City
Mumbai’s micro-market can be divided into two sub-markets i.e. South Mumbai which includes locations like
Malabar Hill, Carmichael Road, Napeansea Road, Cuffe Parade, Colaba and Altamount Road and Central
Mumbai
locations like Lower Parel, Worli, Prabhadevi and Mahalaxmi. South Mumbai locations are
considered to be the prime markets. There is virtually no space for large scale developments in South Mumbai.
Infrastructure
Planned and ongoing infrastructure development is also growing in the Mumbai Metropolitan Region along
with the population and industrial growth. Some examples of ongoing infrastructure development are outlined
below:
Metro Rail project: The proposed 146.5 km long corridor is expected to provide proper interchange
facilities for neighboring areas like Thane, Navi Mumbai, Vasai as well and east to west connectivity for the
city. (Source: Mumbai Metropolitan Region Development Authority)
Chhatrapati Shivaji International Airport modernization: The modernization of Mumbai’s largest airport is
underway.
Monorail: A 20 km long monorail is intended to support public transportation in areas with low road and
rail connectivity. (Source: Mumbai Metropolitan Region Development Authority)
Skywalks: The current plan is to construct 36 skywalks throughout the city to alleviate pedestrian
congestion on the roads. (Source: Mumbai Metropolitan Region Development Authority)
Residential Segment
The Mumbai residential market has witnessed a transition in the profile of residential developments over the
past two years. This can be attributed to the fluctuations and uncertainty caused by the impact of the global
slowdown on the financial capital of the country.
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Home to the Reserve Bank of India, the National Stock Exchange and the Bombay Stock Exchange in addition
to numerous multinational companies entering the Indian market, this city has seen a change in demographic
profiles and thus a shift in residential trends. In the past few years, factors such as double income families,
higher disposable income and easy availability of home loans have encouraged buyers to aspire for a higher
level of luxury, be it in the heart of Mumbai or the outskirts.
Cushman and Wakefield research indicates that Maharashtra continues to be the most favoured location for
investment amongst the institutional investors followed by the NCR and Karnataka, which have also attracted
substantial investments. (Source: Cushman and Wakefield: Survival to Revival, 2009). The improvement in
overall economic sentiment and increasing liquidity is due to the recent rebound in the stock markets, which has
marginally renewed confidence in the residential market. After witnessing a slump from January to September
2009, Mumbai witnessed some increase in demand in the residential sector. Additionally, an increasing focus
has been on producing affordable housing for low and middle income groups resulted in the launch of several
affordable housing projects, most of which are concentrated in far peripheral locations of Mumbai.
The residential demand for India’s seven major cities (these being Bengaluru, Chennai, Hyderabad, Kolkata,
Mumbai, the NCR and Pune) is estimated to be 4.5 million units by 2013. Of the total expected demand across
India, 43% is likely to be generated in Tier I cities, such as Bengaluru, Mumbai and the NCR. Mumbai is
expected to witness the highest cumulative demand of 1.6 million units by 2013. The affordable and mid
segment category is likely to constitute 85% of the total residential demand and will be the primary focus for
the majority of developers (Source: Cushman and Wakefield, Survival to Revival, 2009).
Currently, the Mumbai residential market can be divided into 6 micro-markets, namely the Island city, the
Western Suburbs, the Central Suburbs, the Extended Suburbs, Thane and Navi Mumbai. All these markets will
witness an infusion of approximately 80.61 mn.sq.ft, comprising around 72,906 units of new residential space
by the end of 2011. Out of the total upcoming supply, 46% will be available in 2010. This can be attributed to
the delay caused to most projects that were estimated to be completed in 2008 and 2009.
Commercial/Office Space Segment
The main commercial areas in Mumbai are in the island city such as Nariman Point, Ballard Estate, Lower
Parel, Worli; the western suburbs of Bandra Kurla, Andheri and Malad; the central suburbs such as Powai; and
outlying cities such as Thane and Navi Mumbai. The concentration of corporate offices in these areas has led to
an increase in the demand for residential property (both high-end and affordable) in and around these areas. As
a result of its status as a commercial, industrial and economic hub coupled with its relatively small total land
area and natural geographic boundaries as an island city, Mumbai has a greater population density than most
other major cities across the world and as such, land is very scarce and demand for available land is very high.
Furthermore, there is nearly no undeveloped land remaining in Mumbai except for government controlled set
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