by Mr. Ramesh
Nair, Jones Lang LaSalle India
With the development
potential of Mumbai's Western Suburbs almost fully exploited, we are witnessing
increased momentum in new developments in the Eastern Suburbs where land
parcels are still available and prices more affordable.
As a result, the 16.8
kilometre-long Eastern Freeway that connects P. D'Mello Road in South Mumbai to
the Eastern Express Highway at Ghatkopar has now sprung into sharp focus with
developers.
The implications in
terms of demand, supply & price are
considerable. We have seen a steady increase in inquiries for residential and
commercial spaces close to the Eastern Freeway's entrance and exit ramps, and
developers have begun marketing their projects with an emphasis on their
proximity to this key arterial route.
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| Ramesh Nair |
In Chembur, property
prices have risen by as much as 25 % over the last 2 years primarily because of this area's
advantageous juxtaposition to the Eastern Freeway.
Also, markets like
Kanjurmarg, Kurla, Powai & Ghatkopar saw residential property prices rise
by 32 %, 29 %, 27 % and 23 % respectively in 2012.
This year-on-year
increase in prices is also attributable to reasons like the increase in
superior quality projects with innovative concepts in these areas.
LBS Marg has seen the
arrival of luxury hotels such as Radisson Blue by Rajesh Builders and Novotel
by Nirmal Group.
In fact, the property
market in the CBD - currently on a decline - will also get a fillip because of
the drastically reduced inward-bound commuting time.
Improved road
connectivity between Thane-Navi Mumbai with the CBD will result in an increase
of residential project launches for the same reason.
The completion of the
Santacruz - Chembur Link Road will cause more traffic coming in from the North
side of the secondary business district of Bandra Kurla Complex.
This will trigger a
fresh spate of developments in the catchment areas surrounding the alternate
route to the Central Business District.
With the improved
connectivity of the Eastern suburbs, we will see these areas gradually
attracting the commercial space requirements previously aimed at other
micro-markets as long as the rates remain favourable.
Such a relocation
trend has already been witnessed in SBD North from other markets. This trend
will become even more visible once the current lease periods expire.
There will also be
further eastward movement of real estate development into locations such as
Sewree. However, it is the areas closest to the Eastern Freeway's entry &
exit ramps - specifically, Orange Gate, Anik Junction, Chembur-Mankhurd Link
Road and Panjarpol Link Road - which will emerge as the stronger locations.
Thanks for the new
impetus, the real estate markets in these areas, which see high residential
property absorption, will also see greater demand and consequently upward
pricing momentum.
Going forward, the
prices in the Eastern Suburbs are expected to rise at the rate of10% to 12 %
year-on-year over the next 2 years. A number of developers launching new
projects are using the development of the Eastern Freeway as a marketing tool
by highlighting the reduced commuting time to South Mumbai from peripheral
locations.
Over the mid-term,
properties in Wadala will also see a marked increase in value due to the
combined influence of the Eastern Freeway and the fact that the MMRDA is
fast-tracking this area's development as a Business District.
In the long term,
certain land parcels currently held by the Mumbai Port Trust could eventually
be released for development. If and when this happens, the presence of the
Eastern Freeway will ensure that these land parcels will attract considerable
premiums. There is also a possibility of many industrial units present in the
catchment areas of the Eastern Freeway moving out, further augmenting the
supply of prime property for commercial & residential development along the
Eastern Freeway.
Micro Market
Impact:...
** South Mumbai may
witness a small jump in absorption, considering the improved accessibility.
Close to 35,000 vehicles travel on the Eastern Freeway each day.
** Central Mumbai will witness some acceleration
in supply & absorption, and a moderate jump in rental / capital values.
** BKC will see moderate impact, which could
improve once the Santacruz-Chembur Link Road (SCLR) comes up.
** Andheri will show, if at all, a mild negative
impact because the Eastern Suburbs would now compete with it as an option for
real estate.
** The Western
Suburbs will largely remain unaffected by the Eastern Freeway, but the contrast
between Eastern Suburbs - where a number of infrastructure projects are being
undertaken - and the crowded Western Suburbs might become more pronounced,
resulting in price pressure in the Western Suburbs.
** The Eastern Suburbs will see the maximum
impact, with a sizeable increase in supply, absorption and rental/capital
values across all segments.
** The Thane-Navi
Mumbai market will experience positive movements, primarily in the residential
market, with a lag effect on the commercial market.
About the author..
Mr. Ramesh Nair is
COO – Operations at Jones Lang LaSalle
India
For Media Contact
Mr. Arun Chitnis
Head – Corporate
Communications & Media Relations
Jones Lang LaSalle
India,
Level 6, Amar Avinash
Corporate Plaza,
Bund Garden Road,
Pune - 411 001.
Tel: (020) 3093 0441
Fax: (020) 4019 6101
Mob: +91 96571 29999
Website:
www.joneslanglasalle.co.in
Blog: www.joneslanglasalleblog.com/realestatecompass
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