Ghodbunder Road – upcoming destination

From a small suburban town on the outskirts of Mumbai to a self-sustaining metropolis, Thane has progressed leaps and bounds over the last decade. It is a modern city with expansive flyovers, seamless highways and broad roads that contribute to its burgeoning social infrastructure.

With a property price boom that was seen in areas in and around Mumbai between 2010 and 2012, Ghodbunder Road segment in Thane emerged as an ideal residential destination for price-sensitive home buyers owing to the relatively lower rates in comparison to the central Thane city. Today, Ghodbunder Road is witnessing rapid appreciation in terms of real estate.

Ghodbunder Road is approximately 20 km long and links the two main arterial roads of Mumbai, the Eastern Express Highway which starts at Sion and terminates at Thane and the Western Express Highway, that starts at Bandra (East) which becomes the National Highway leading to Gujarat. Many rail and road infrastructural projects on the Ghodbunder Road are in the pipeline giving the area an upper edge.

The MMRDA has given a nod to a monorail network which will serve as a feeder system to the Metro corridor extending from Wadala to Kasarvadavali on Ghodbunder Road. Besides, the road also provides quick accessibility to Mira Road from Thane, and to other micro-markets like Mulund, Bhandup and Ghatkopar.

From affordable apartments to premium properties, the area offers an extensive mixture of housing options. Capital values of newly launched multi-storey apartments vary between Rs 40 lakh to Rs 2.5 crore and the average prices of this region range between Rs 8,000 and Rs 10,000 per sq ft with annual appreciation of nearly 7-10 per cent, based on the project specifications and amenities.

Ghodbunder Road is attractive to developers primarily due to the easy availability of large land parcels. Some of the reputed developers present on this stretch are Runwal Group, Puraniks Builder, Harmony Lifestyles Group, Vijay Group, Rosa Group and DS Group.

Penthouse south Mumbai

One more record deal Indian realty market, in which one of the most prominent Indian industrialists is set to buy sea-facing triplex penthouse in South Mumbai at Napean Sea Road locality at record Rs 202 crore, the biggest deal for residential apartment in country.

We all know that this is another surprising deal in Indian real estate sector. It was four times bigger transaction in comparison of recent big-ticket transaction for an apartment, in which Banker Uday Kotak bought house of 11,000-sq-ft area in Rs 55 crore at commercial business district, which is located in the district of Bandra-Kurla Complex. From past two years Mumbai is witnessing big deals in luxury apartments as uber rich guys are not hesitating to pay even with Rs 100 crore prices in localities such as; Malabar Hill, Napean Sea Road and Worli.

Key Points of deal:

1. Deal Price: Rs 202 crore
2. Location: Napean Sea Road, South Mumbai
3. Developer: Runwal Group
4. Built Area: 17,000 sq ft over 20th, 21st and 22nd floors with parking slots for 21 cars
5. Expected Delivery Date: End of March 2018

About Deal:

With this deal it’s clear that in Indian real estate market any record cannot stand for much longer time because this deal is set to make a new record with its sea-facing triplex penthouse, which is located at Napean Sea Road locality in South Mumbai. One of the prominent industrialists is buying this luxury pad, which have carpet area of 17,000 sq ft, spread over 20th, 21st and 22nd floors of a project with 21 car-parking slots. This sea-facing triplex penthouse will be built buy the Runwal Group. However; this penthouse will offer the mesmerizing view of the Arabian Sea and the Queen’s Necklace. Apart from other facilities and amenities property will provide luxury club house and swimming pool with an aim to attract the international investors or buyer for its 30 apartments, which is being constructed in two separate wings.

According to one of the real estate expert, “This is great news because people are also moving towards the alternatives and other vertical developments. Now day’s families are looking for specific kind of lifestyle for which options are limited”. It is expected that this penthouse will be ready for possession by the end of March 2018, and industrialist has already made deal though the token payment and has signed agreement last week. It is expected that this deal will be concluded in next one month. If this deal will work out, so it will be one of the most expensive transactions for any residential apartment as per sq ft basis because buyer is paying Rs 1.20 lakh per sq ft. However; it’s not clear that who is buyer, but according to reliable sources, buyer runs a large and prominent group of diversified business with interest in a wide range of business sectors. Whereas; Sandeep Runwal, director of Runwal Group declined by commenting on the deal.

About Project:

Each floor of both the wings has one apartment and it is expected that by the end of March 2018, the project will be ready for possession. The well known Runwal Group is developing the project on the largest plot after bringing down a bungalow named as Napean Grange. In 2011, the developer was bought the bungalow in Rs 350 crore, which was spread on an area of half acre and the owner of the bungalow was Kapadia family. Earlier, the bungalow was famous as Bansda Residence, and family of Maharaja of Bansda (Bansda is state in southern Gujarat) were using it.

Extra FSI can hit the Redevelopment work

Recently, the proposal of Maharashtra government to put extra charge on builders more for the extra 0.33 floor space index (FSI) given for housing projects is likely to hit redevelopment work in Mumbai‘s suburbs. The Maharashtra government has increased the ready reckoner rates by an average 15% every year since 2008 and now government is now considering linking the premium to be paid by real estate developers for the 0.33 extra FSI to ready reckoner rates of 2015 as against current base of 2008 rates.

Effect of an extra FSI:

If this proposal will be accepted, so according to real estate experts, so real estate developers may not find smaller redevelopment projects in Maharashtra viable because of the financial outgo, as the base rate for calculation of premium will increase by almost 100 per cent. This move will push up the costs for home buyers in Mumbai’s suburbs. If central government is serious about project “Housing for All” or to make homes affordable than they need to take the extra measures as most of the announced aim to boost the government’s revenue, but these, including the latest one, will impact home buyers in terms of prices and lower areas offered to existing owners in redevelopment projects.”

In some of the localities and zones, ready reckoner rates have been revised upward by more than 30 per cent to 40 per cent on yearly basis. For the year 2015, revision in rates is popular in suburbs such as Malad, Chembur, Goregaon, Borivali, Ghatkopar and Vikhroli have been increased by 30 per cent to 40 percent. It is the same for plush residential localities such as Worli and areas near Bandra-Kurla Complex. In a sluggish real estate market where prices are weakening, a rise in cost for real estate developers is bound to hit their margins. This is expected to see low number of real estate developers coming forward for smaller redevelopment affordable residential as well as commercial projects in the suburbs.

As per the Nayan Bheda, CMD of Neptune Group, “All the equations in real estate market will change as costing itself will double with this proposal. Redevelopment projects in suburbs like Borivali, Kandivali, Mulund, Bhandup, Kanjurmarg and Dahisar will be hit severely as the cost will move up without much room for recovering it through any price hike”.  Once the proposal is notified, real estate developers are likely to renegotiate on the old redevelopment project agreements as construction is yet to start for them, because most of the real estate builders will be interested in reducing the compensatory benefits, including extra space for tenants.

In 2001, the state government of Maharashtra had decided to grant 0.33 additional FSI to real estate projects in the suburbs and extended suburbs of Greater Mumbai and central Mumbai by sanctioning an amendment to the Development Control Regulations for Greater Mumbai, 1991. As per the Vvikas Aroraa, Director, Marketing & sales, Runwal Group, “The costing is growing up and it will have two possible ramifications. Either home-buyer will have to pay more, which looks unlikely given the current market scenario, or developers’ margins will suffer whereas; other industries in real estate market is assessed on its net realization and profitability , and based on that redevelopment projects in suburbs may not see many takers”.

It is expected that this will make an impact as additional space to be shared with existing tenants. it is expected that this move will help to low the price of housing on the back of augmented supply in the suburbs. The premium accrued to the state government and the Municipal Corporation of Greater Mumbai from this additional 0.33 FSI was to be used on upgrade the city’s infrastructure. The additional FSI could be availed of on payment of premium.

Mr. Subhash Runwal – Chairman Runwal group

Subhash Runwal, who is one of the India’s newest billionaire, makes his debut this year with a worth of $1 billion fortune, hails from Dhulia, which is a small town in Maharashtra state. His grandfather was a jeweler but when Mr. Runwal was a teenager, the family had faced a very hard times. This young boy lad the group of five siblings and left the town Dhulia to study commerce in Pune city, after completing graduating in commerce to do his chartered accountancy he moved to Mumbai and on that time he was having less than $2 in his pocket at age 21.

Professional career:

After completing chartered accountancy he joined Ernst & Ernst as first job where he got an American posting in St Louis, Missouri, but after six to eight months he decided to pack up and return home because of different lifestyle, says Runwal, seated in his suburban office in Mumbai. Behind his desk is a painting, the handiwork of his daughter, which he proudly displays. His first abode as a young lad was a modest studio in a far-off suburb in Mumbai that he rented after landing a job at a chemical firm as an accountant. I can do it attitude helped him a lot to acquire a reputation as the go-to guy for dealing with hidebound bureaucracy. As he was able to speak local Marathi language fluently, so he was able to strike a rapport with local bureaucrats and politicians as well and they was giving all impossible tasks to him, recalls Runwal.

On that time one of his major tasks was to lobbying the central government to ban the import of a chemical, which was manufacturing by his company. Still he can recall that this task took 52 trips to Delhi over a year for Runwal to secure the crucial ban that enabled the company to start reaping profits. In this process Runwal had built up his network in bureaucratic circles and then he he decided to put everything at risk, choosing real estate as his field of play.

Entry in real estate market:

Runwal had chanced upon an opportunity hidden in a draconian law called the Urban Land (Ceiling & Regulation) Act of 1976, which he had studied in detail an under this particular law the government imposed limits on land ownership and had the power to acquire vacant urban land as this law has been repealed in most parts. Than Runwal acquired his first ever plot of 22 acres in a central suburb of Mumbai, which is an area that was eventually to become his stronghold in the property market. After making his first property deal and never looked back as his specialty was to buy litigious plots or lands that had fallen into the ambit of the land ceiling law and then he work on his way into getting the titles cleared. Due to putting his name on those projects, he becomes famous for providing low cost apartments aimed at the middle class. His one of the notable project called Runwal Nagar in the suburb of Thane was a cluster of 16 buildings however; after 18 months of the initial sale, the price had more than doubled. The more he added that, our customers were people who had never owned their own homes before and most of them were from middle class. They would come to my office with boxes of Indian sweets and touch my feet.

Milestone of success:

Now Runwal was building his own real estate empire and he harbored the dream of becoming an industrialist so he got into manufacturing arm as well. Later he expanded into steel and pharma but those businesses unraveled. Than eventually he sold out and renewed his focus on real estate while his Runwal Group was still busy in building the low cost affordable middle class housing and it has moved up several notches and now has projects in tony south Mumbai where it is building luxury residences for the uber rich.

Entry of new generation in business:

Later in 1995, the entry of his two B-school trained sons in his privately-held family business make him to enter into malls business. The more he added that sons pushed me to market their projects more aggressively and create a new corporate identity for Runwal as his older son Sandeep is an MBA from the Indian Institute of Management, Bangalore and the younger son, Subodh, is an MBA from Northeastern University. Runwal has managed to get the backing of the Singapore government’s GIC, which invested in one of its malls in Mumbai, the more he added that completing projects on time is critical in his business, but his none of the projects never get stuck for approvals as nothing was impossible for him due to high connection with bureaucrats and politicians. Lately, Runwal has been picking up big plots in suburban Mumbai, which ensures a long pipeline of new projects.

After certain time he put all his efforts to giving back to society as he donates $1.5 million every year to various causes. He built two hostels in Navi Mumbai and now he offers education scholarships to the less well off. Now every morning he walks on the promenade opposite his sea-front home and counts Bollywood actor Shahrukh Khan as his neighbor and the more he added that “I’ve achieved more than I could have ever dream of.”