Urban renewal: Builders ride the redevelopment wave in major Indian cities

Space crunch, need for efficient land use prompt both firms and govt bodies to follow trend

India’s real estate sector is booming with new-age concepts, and redevelopment is gaining traction due to space scarcity and the need for efficient land use. These projects span governmental partnerships, societal initiatives, and developer-led efforts.

Mumbai is at the forefront, with dilapidated buildings being continuously modernised. Key micromarkets like Dadar, Prabhadevi, Bandra, Worli, Vile Parle, Juhu, Malabar Hill, and Mahalaxmi are witnessing this trend.
 

According to Anarock, in the Delhi-National Capital Region, ageing colonies and housing societies are being transformed. Surat is advancing with urbanisation and Smart City initiatives, while Bengaluru is upgrading old residential areas, driven by sector demand and the need for enhanced urban infrastructure. This trend is revitalising urban landscapes nationwide.
 

JLL reported that 15-25 per cent of property registrations in Mumbai come from redevelopment, with over 3,500 projects approved by May 2024. Tier-I developers are increasingly focusing on redeveloping prestigious areas. Developers like Prescon, Kinjal Group, Mahindra Lifespaces, Vascon Engineers, Rustomjee, Kolte-Patil, and Runwal are planning substantial investments to expand their portfolios.Mumbai-based Prescon plans to invest around Rs 250 crore in 2024-25 (FY25) towards new opportunities and funding existing redevelopments. In 2023-24 (FY24), the company invested nearly Rs 100 crore in ongoing slum rehabilitation projects, including a 250,000-square-foot, 23-floor rehab tower in Mahim.

 

“We are looking to acquire strategic plots and approvals in Mahim, Worli, Santacruz, and other markets in the western suburbs. These efforts are part of our long-term vision to establish Prescon Group as a leading brand for quality developments in the real estate sector. We are strategically focusing on mid-scale, amenitised developments in Central, South Mumbai, and the western suburbs,” said Vedanshu Kedia, director of Prescon Group.
 

Kinjal Group also plans to extend its portfolio with two redevelopment projects of an estimated total built-up area (BUA) of 200,000 square feet. It will also develop a residential project on about a 4-acre plot near Kalyan Shil Road, Maharashtra, which will have a BUA of 400,000 square feet.
 

“We are primarily focused on residential properties, commercial spaces, and mixed-use developments. Our approach includes transforming older buildings into modern, sustainable, and efficient real estate assets, with an emphasis on enhancing the living and working environments,” said Divyesh Doshi, director of Kinjal Group. In the listed space, Mahindra Lifespaces, Rustomjee Group (Keystone Realtors), and Pune-based Kolte-Patil are accelerating investments.Boman Irani, chairman and managing director (MD) of Rustomjee Group, said it acquired 15 projects between 2021-22 and FY24, with 12 focused on redevelopment.

“Redevelopment remains a key area for the group, which has established a presence in Mumbai’s western and eastern suburbs while exploring additional opportunities in the city. FY24 has been a positive year, and the group anticipates continued growth in FY25.”
 

For FY25, Rustomjee plans to invest Rs 400-500 crore in new projects, with seven to eight projects, including redevelopment, expected to launch. As of August 2024, five projects have already been launched.
 

Mahindra Lifespaces, the listed arm of Mahindra Group, is expanding its footprint in the space, with a robust pipeline of projects valued at Rs 3,300 crore in various stages of development across Mumbai. Since securing its first society redevelopment project in January 2023, the company has expanded its portfolio with two additional projects in Malad and Borivali West in FY24, boasting gross development value (GDV) of Rs 1,000 crore and Rs 1,800 crore, respectively.
 

“As we move into FY25, we plan to invest heavily in strategic redevelopment opportunities, continuing our growth trajectory and strengthening our presence in key urban markets,” said Vimalendra Singh, chief business officer — residential, Mahindra Lifespaces, which is valued at Rs 8,600 crore on the bourses. Kolte-Patil has 14 society redevelopment projects in Mumbai — two completed, five underway, and seven upcoming. The upcoming projects, signed in January in the western suburbs, cover 306,000 square feet of saleable area with a GDV potential of around Rs 545 crore.
 

“Moving forward, we are keen to strategically expand in high-potential micromarkets in line with our diversification goal of strengthening our Mumbai footprint,” said Atul Bohra, group chief executive officer, Kolte-Patil.
 

Sumit Kasat, business development head — redevelopment, Runwal, said, “We are planning to invest close to Rs 1,000 crore across six to eight projects in the next two years. Redevelopment is a complex process, and the most important factor driving this is trust and transparency. With our commitment to providing the best customer experience, we ensure that customer satisfaction is at the forefront of everything we do at Runwal.”
 

While the big names are expanding fast, smaller companies are not far behind in the race.
 

“To fuel these expansion plans, we have already invested Rs 50 crore in FY24 and plan to double that in FY25 with multiple redevelopment projects in Mumbai. This is a big step towards strengthening our presence in the redevelopment sector in Mumbai and contributing to the urban renewal of our cities,” said Siddharth Vasudevan, MD of Vascon Engineers, a listed firm valued at a little under Rs 1,600 crore.
 

Government bodies driving the redevelopment trend include the Ministry of Housing and Urban Affairs, city development authorities like the Mumbai Metropolitan Region Development Authority, Bangalore Development Authority, Delhi Development Authority, and state housing boards such as the Mumbai Housing and Area Development Board, Karnataka Housing Board, and Tamil Nadu Housing Board. Special purpose vehicles established by local governments manage major projects like Smart City and Metro Rail, ensuring efficient execution and streamlined project management.