Going back to the development of Suburbs so happened that major Commercial Areas were concentrated in the Island City of Mumbai. Generally, they are named as CBD's (Central Business Districts). They are called so as companies majorly have their offices here and people from various parts of Mumbai i.e. Kaylan, Dombivali, Thane, Belapur, Vashi, Panvel, Virar-Vasai, Mira-Bhayandar, Borivali used to travel to Churchgate or nearby vicinities for work purpose. There are few exceptional cases of people from Surat to Work to Mumbai. I consider them mostly as Diamond Merchants. Island City of Mumbai has Zaveri Bazaar most famous for its different types of Jewellery, Diamonds, etc being sent to Suburban shops at a premium to be sold. Most of the Heritage Places and Popular Personalities of Corporate World, Celebrities have their homes here or to be developed here. From Jatia House being sold to Kumar Mangalam Birla to Mr. Cyrus Poonawalla purchase of a home indicates the ultra-premium properties having their mark in the island cities. There are many more examples of it.
The second part of Mumbai which we call as Suburban Mumbai is divided from Bandra to Dahisar (Called as Western Suburbs) and Sion to Mulund which forms a part of Navi-Mumbai. These areas became the living homes of many HNI's, popular Bollywood celebrities and also the emergence of Bandra Kurla Complex in Bandra East which has excellent connectivity to Navi Mumbai, Powai, Western Suburban Region through Eastern Expressway or Western Express Highway. Based on the run rate of development above many people in search of shelter decided to make Goregaon, Malad, Kandivali, Borivali and Mira-Bhayandar as their homes depending on one's affordability and the ongoing prices in Real Estate Market. Even if we observe the spread of residential developments, there are areas in Mumbai where a dominance of certain community exists over the others. Eg : Mulund, Ghatkopar, Thakur Village, Mahavir Nagar both belong to Kandivali East are dominated by Gujaratis and Jains who are predominantly business class. In Dadar there is a prominence of Maharashtians in areas like Hindu Colony, Sena Bhavan, Shivaji Park, etc.
The present scenario holds us in a very challenging situation of Urban Agglomeration happening at a brisk pace with the pace of infrastructure development far lacking behind.
The slums that are created are a nuance although as per government rules they have the recognition of being a part of socio-economic status in India. Their emergence dates way back to 1970's. The only way out is for SRA (Slum Rehabilitation Authority) to take various steps and give them apartments thus clearing up the shabby outlook of financial capital of our country.
Andheri West has metro connectivity and is expected to be further connected to Dahisar via Dahisar - DN Nagar Metro Line currently under construction which will stretch all the way to Ghatkopar and Mankhurd. There is pain for another 3-5 years subject to political stability at the centre which envisions a second term for the current government. Also the Kandivali to Bandra Expressway via the Arabian Sea offers further hope of better infrastructure for the future albeit population in Urban areas are controlled.
As per the proposed developments there is capital appreciation and euphoria in Real Estate subject to passage of some speed bumps i.e. demonetisation, RERA and GST. This will help build trust in buyers and revive the real estate market. Property Appreciation happens in 4 ways.
1. When an Infrastructure Development is announced.
2. When the infrastructure work commences.
3. When the infrastructure work completes.
4. When services are inaugurated to become functional.
Keeping the future developments in mind and the current reform initiatives of the Government, Goregaon, Malad, Borivali, Kandivali, Dahisar and Mira-Bhayandar has immense scope of development and appreciation potential. If we co-relate Real Estate with other asset classes, the best performing one's are Stock Market (they were in a Shaky set of affairs when the Modi Government presented their first full budget in February, 2015. Since than there is no looking back), Debt Instruments, Various other products in Capital Markets. Going by the logic of stock markets there are 3 phases Accumulation, Participation and Distribution. The Indian Real Estate Market is going through Accumulation Phase. The Participation Phase was from 2004-2008 which than led to Distribution Phase. Generally, smart money moves in Accumulation Phase when none of the market participants thinks that the market can rebound or go up. The mood is bearish. Similarly, going by the logic, many Global Funds including Indian Funds have started pouring money in the Real Estate sector and that is commercial spaces. They are having a tremendous run in the past few years. Its supported by Government initiatives of REITs and INVIT's. If we have a look at Blackstone, Brookfield, Canada Pension Plan Investment Board, Altico Capital. All of them have lapped up commercial assets in the country valuing worth Billions of Dollars. Piramal Finance providing structured loans, equity participation and mezzanine investment to developers for completing their projects. Its a clear indicator of accumulation phase.
Based on the above assumptions and logic the top 5 localities to invest in Western Suburbs will be :
1. Bandra (HNI's. etc)
2. Goregaon (In Pockets along with Malad)
3. Dahisar (East & West)
4. Borivali (East & West)
5. Kandivali (East & West)
Adding to the above few more below :
5. Ghodbunder Road
Powai is an outlier being connected to both Eastern and Western Expressway along with a mini micro market of Mumbai in itself with the presence of Sheepz and other corporate houses having their offices, which shall continue to function as before. It does enjoy the locational advantage of attracting talent from both the parts of the city.
We foresee the major action of CBD moving to SBD (Secondary Business District) like BKC. The major reason being no redevelopment in CBD, Higher Rentals, Less amenities compared to SBD, Age of Building, CRZ regulations on Development and many more.
Article by Tejas Jhaveri
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