Bandra, especially Bandra West, is a popular residential destination, as it holds a high lifestyle value, despite the fact that it faces a significant degree of traffic congestion. This area has always been a preferred spot for prime property seekers because of its elite profile and shopping, health care, education and recreation facilities. Developers there are offering products in redevelopment schemes.
Bandra East is also an upcoming residential destination, especially for investors, since there is considerable rental demand from people who have come from outside Mumbai and are working in the Bandra Kurla Complex (BKC). Both capital and rental values are going to increase in Bandra East, as Bandra West has reached saturation point.
With the city's Central Business District having, for all practical purposes, shifted from Nariman Point to BKC, Bandra has become the most sought destination for businessmen, the upper managerial cadre and expatriates. In the recent past, with many large corporate houses moving their headquarters to BKC, and many consulates, as well as India's largest diamond market also moving there, BKC has made Bandra the heart of Mumbai.
With these dynamics, people working in BKC are looking for homes that allow for no more than 30 minutes' travel to home. Bandra West has already seen the upswing in demand. With no land supply in Bandra West and limited residential supply, the prices have moved up considerably. The price appreciation that has surprised many experts is now making developers look at redevelopment of existing buildings.
Redevelopment activity in Bandra has picked up considerably in last two-three years. Though, with existing apartment owners' expectations being high, developers are cautious about taking on projects where the viability in terms of returns in question. We expect that wherever apartment owners are more realistic, redevelopment projects will further pick up and the skyline of Bandra will completely change in the next four-five years.
Being next to the country's most prominent CBD, Bandra's real estate potential remains very high. It is a matter of prestige for every reputed developer to have a signature product in this micro-market. Recently, Rahul Saraf of Forum, one of the reputed developers in Kolkata, took up a large project in Bandra East for development. This signifies the area is going to witness dramatic interest levels in the years to come.
Currently, residential prices in Bandra East quote at par with commercial properties there, and can go up 100-150 per cent from current levels. Supply is a big challenge in both Bandra West and East.
We believe with the upswing in the economy, demand will rise further in the coming months. Infrastructure in Lower Parel is collapsing, and many residential projects are yet to get occupied there; the situation there will only worsen in the coming years, driving corporate houses to re-locate to BKC. This will further fuel the demand in the residential pockets of Bandra West and East.
The writer is CEO, Residential Services, JLL India
