Redevelopment in a city like Mumbai constitutes 75 per cent of the total real estate supply, however, in the past few years, because of the slump in real estate market even redevelopment of slums and old buildings has been impacted adversely.
Pankaj Kapoor, MD, Liases Foras, a real estate research firm, says all markets in real estate are hit, but slowly they are moving now. “The market was hit, but now things have started moving slowly.
Negotiations are taking place but only in places, where the slum dwellers and even the landlords are being reasonable. Only if the demand from them to the builder is rational and in most cases they have become rational seeing the current market scenario negotiations are taking place,” he said.
In a city like Mumbai which is saturated in most places, redevelopment of old buildings and the slums are the only way to create more housing. According to Kapoor, in Mumbai district, 70-75 per cent of the total supply in real estate comes from redevelopment. It could be redevelopment of old buildings or that of slums.
Scarcity of open land is one of the reason in most cases, developers go to any extent to bag a project or get a redevelopment deal. Even the government is hiking the FSI when it comes to redevelopment of old buildings already slum redevelopment has an FSI up to 4 in most cases. All these factors contribute heavily to the demand of developers moving towards redevelopment. A developer said, “If not redevelopment, then where will we be able to find land to construct buildings in Mumbai. From top developers to the new ones every one eyes a slum or an old building and everyone is in redevelopment these days.”