The soaring population is leading to the outward expansion of cities, shifting them beyond their peripheries. This has led to a dire need for new projects in the real estate. With the scarcity of space due to urban growth, redevelopment of the existing properties is being dawned upon. The reconstruction work in cities is slowly gaining momentum, mainly due to lesser incentive, and ambiguity in framed regulations in the segment. Initially being taken by small developers, the redevelopment projects are gradually becoming significant to big developers, like DB Realty, Radius Developers, and their portfolios.
But why is the sector pulling sudden interest of the giant realtors? Bearing a viable source of housing, redevelopment projects didn’t initially hold the interest of major players as it involved single buildings or small housing societies. The breakeven for such projects was not well-defined and thus, developers were unwilling to invest. But the unavailability of land, soaring property prices and upselling of properties by small builders have prompted the interest in big real estate firms in the segment.
Undertaking the responsibility to revamp these projects is like breathing the second lease of life into them. Not just re-developmental society projects, even heritage preserved buildings are being given a makeover, making them more inclined with the contemporary urban needs.
Kala Ghoda, is one such example. An old area situated in downtown Mumbai has been converted into a luxury real estate hub stacked with cafes, clubs, elegant shops, trendy restaurants, and grand buildings.
Rahul Mehrotra, professor, and chair – Department of Urban Planning and Design, says, “A unique collection of architectural styles come together in this precinct to form a strong urban design armature.”
But as far as the renting of the place is concerned, it costs an arm and leg. Kala Ghoda demands a dime as far as rents go, says Sailesh Shah of DB Realty Ltd. “Rents can run into a few lakhs per month and yet, there is a demand and not much inventory in the market,” he adds.
The redevelopment projects lay emphasis on the existing vision of the city, but fuse new typologies to reinvent its outlook. These developments take into account the following factors:
- How to work with the existing infrastructure
- The area to be redeveloped
- Existing policies pertaining to the area/land
- Ecology of the surrounding areas
The redevelopment and reinvention projects are becoming increasingly fostered in all Indian metros including Mumbai, Delhi, Bangalore, etc. It darts a wider target market as well, allowing mix housing, and accommodating all socio-economic classes. Thus, it appeals to the masses, no matter the strata.
“There is need to see redevelopment projects through a wide lens, and consider issues of connectivity, green spaces, landscapes, and skylines,” said Raman Sikka, a Delhi architect whose firm has worked on urban projects throughout the country.
These projects play a critical role in boosting supply and curbing property prices in the metropolitan cities, which have reached saturation in matters of adequate housing.
Srinivasan Gopalan, Chief Financial Officer of the Wadhwa Group says, “Redevelopment projects generate cash flows by way of sales in a short span. This allows companies to pump in funds into Greenfield projects. The company says it has undertaken about 900 redevelopment projects so far.”
Also premium residential developers DB Realty Ltd has entered into an agreement with Radius Developers to jointly execute a redevelopment project spread over 5 acres near the Bandra Kurla Complex (BKC) area. DB Realty Ltd will hold 51% stake in the project, while the rest will be with Radius Developers.
Being a byword in cities infested with an ever-growing population, redevelopment projects having established an imperative proposition both with small, and large real estate developers.