Tucked away deep inside Bandra-Kurla Complex (BKC), Mumbai’s newest business district, and overlooking the dirty waters of Mithi River, Signature Island doesn’t really sound like a posh address. But that has not stopped the Maximum City’s well-heeled from shelling out Rs. 25 crore or more for an apartment double the size of a basketball court.
A Vertical City
Three factors are driving the builders and affluent buyers to the suburbs. The floor space index, which measures the size of construction allowed relative to the land size, is twice as much in suburbs as in the old city. Second, decades-old housing laws stipulate paltry rents in the city, where it is nearly impossible to evict tenants. Third, the land supply comes in a trickle while migrants are pouring in.
Along the way Khetan took some calculated risks. Sunteck won the BKC plot against competition from the likes of Raheja and Naman. Sunteck’s bid was the highest, but Managing Director Khetan figured he could recover it by charging a 20 percent premium over the rates for commercial property. On the other hand, he also knew when not to spend. He conserved the Rs. 500 crore he raised through private equity when he thought the market was over-heated.
(This story appears in the 19 February, 2010 issue of Forbes India. To visit our Archives, click here.)
nice article...
on Jan 3, 2012Hi I am actively looking to short idiotic Indian banks. If you can publish articles on some of the dumb people lending money to these guys the writer might get a small treat from a grateful investor. Ideally it should be about Indian banks and how much their real estate exposure is. Fun fact: a 1 % rise in floating loan interest rate in the first year can increase your EMI by 20-30% assuming you have a 10 year 10% 10 lakh home loan.
on Jun 23, 2010Finally! People will get some real value for money in real estate in Mumbai. Do note though that this is a rather well executed strategy by the real estate "mafia" to milk the well to do customers. First they sold very basic apartments at exorbitant prices and no real value apart from the four walls in return; and when a threshold is reached and the customer seems to be not buying into the same they have now launched these "luxurious apartments" with "new age amenities" at new levels of premium which btw should have been offered at the initial levels already!Well disguised i say!
on Feb 11, 2010