Unitech to Develop Mumbai Slums Into Luxury Housing

[suma25]

Unitech to Develop Mumbai Slums Into Luxury Housing January 15, 2010, 12:59 AM EST MORE FROM BUSINESSWEEK By Sumit Sharma Jan. 13 (Bloomberg) -- Unitech Ltd., India’s second-biggest developer, expects its share of sales from redeveloping Mumbai slums into luxury apartments to triple in three years and boost profit, Managing Director Sanjay Chandra said. Unitech, based in New Delhi, is developing 100 acres (40 hectares) of land in north Mumbai’s Santacruz area, near the city’s airport, by knocking down shacks typically built with tin, asbestos and plastic sheets, and building apartments in towers serviced by high-speed elevators. Slum dwellers will be resettled in smaller apartments in separate buildings on part of the cleared land. The world’s second-fastest pace of economic growth is boosting incomes for India’s urban population and spurring demand for houses that cost at least 2.5 million rupees ($54,818) in a Mumbai suburb. About 8 million people live in slums in India’s financial capital and surrounding areas, more than the population of Switzerland. “Mumbai is a lucrative market and prices tend to go up firmly and demand is usually strong,” said Jigar Shah, head of research at Kim Eng Securities India Pvt. in Mumbai. The measures to develop slum areas and build affordable homes “will help lift return on equity and profit.” Mumbai properties may account for 40 percent of revenue in three years, up from the current 12 percent, Chandra said in an interview in Mumbai. Moving People The government’s plan to redevelop larger shanty towns such as the 535-acre Dharavi slum near the new Bandra-Kurla business district has been delayed because of political indecision and disagreements, said Jockin Arputham, founder and president of the National Slum Dwellers Federation. Set up in 1975, the federation, spread over 70 towns, has 15 million slum dwellers as members through their respective local associations. “It’s not easy to do redevelopment as moving people is a complex task,” said Anshuman Magazine, New Delhi-based managing director of CB Richard Ellis for South Asia. “Not everyone may want to be relocated for economic reasons, not to mention legal and other regulatory issues, and the state of the real estate market.” Shares of Unitech gained 0.2 percent to 88.7 rupees at the close of Mumbai trading. They more than doubled last year compared with an 81 percent increase in the benchmark index. Unitech, which posted a 51 percent drop in profit in the three months ended Sept. 30, is also building budget homes. It has cut the time to build low-cost housing by 40 percent as it tries to boost revenue in a nation facing a shortage of 24.7 million homes. ‘Assembly Line’ The company is trying to emulate the success developers including Cyrela Brazil Realty SA Empreendimentos e Participacoes have had in boosting profit from selling budget homes, Chandra said. Cyrela, Brazil’s biggest developer, tripled profit in the third quarter and plans to sell 19,000 homes this year, according to a company presentation. “We are looking at it as an assembly line kind of business model,” Chandra, 37, said. “If you make an affordable product, the margins will be lower, but the capital will churn much faster, so your return on equity will be much faster.” Success for Unitech will depend on government laws, Chandra said. The company, which began selling its Unihomes brand of budget housing in Bhopal, hasn’t built such properties in its biggest market near New Delhi because of rules restricting the number of residents in its housing complexes, he said. The Unihome brand sells property for about 2 million rupees, according to the company’s Web site.

[suma25]

This was the initial render of the proposal in 2008 the project was to be called santa city it was designed by som architects of dubai and was to be financed by lehmann brothers but after the financial crisis it got stalled . But its back on track.hopefully we will see something like the one in the renders

[King Tendulkar]

And what happens to the people are living in the sums? What happens to them as they have made homes there!

[suma25]

^^ from the article

Slum dwellers will be resettled in smaller apartments in separate buildings on part of the cleared land.

[ViruRulez]

I had seen a documentary on National Geographic about this. I think there are both positive and negative opinions about it. There are some well established business in those slums too and they cannot carry the business in their individual apartments if they are made into the santa city. Clothes and accessories business flourish in Mumbai's Dharavi slums which you are referring and even big fashion houses in Milan get clothes made from Dharavi as it is very cheap and of very good quality there. So, I am not sure if it would be a good idea as there are hundreds of crores attached to all these businesses every year. Even Mumbai's maximum recycling business is also done in Dharavi and recycling of commodities is also essential for the nature. There are many classes of slum dwellers in Dharavi too. There are crorepatis and multi-millionaires in Dharavi too and there are people who are settled for 30-40 years. Those people will face bigger problem as they and their businesses are well settled and cannot continue with those businesses in the small apartments that would be provided to them. On the other hand, the extremely poor section of Dharavi will benefit from it.

[jusarrived]

I had seen a documentary on National Geographic about this. I think there are both positive and negative opinions about it. There are some well established business in those slums too and they cannot carry the business in their individual apartments if they are made into the santa city. Clothes and accessories business flourish in Mumbai's Dharavi slums which you are referring and even big fashion houses in Milan get clothes made from Dharavi as it is very cheap and of very good quality there. So, I am not sure if it would be a good idea as there are hundreds of crores attached to all these businesses every year. Even Mumbai's maximum recycling business is also done in Dharavi and recycling of commodities is also essential for the nature. There are many classes of slum dwellers in Dharavi too. There are crorepatis and multi-millionaires in Dharavi too and there are people who are settled for 30-40 years. Those people will face bigger problem as they and their businesses are well settled and cannot continue with those businesses in the small apartments that would be provided to them. On the other hand, the extremely poor section of Dharavi will benefit from it.

was about to post the same , saw that documentary ..but thing is , we cant afford have slums in our cities ...they will have to consider the above factors & work out a reasonable compensation though

[DomainK]

Slums pose a very big problem for Mumbai. Apart from the fact that people illegally occupy government land, they pose the following two very serious threats to the rest of the society: 1. They play a significant role in damaging the democratic system as parties use them as vote banks by backing their rights (that legally don't exist) and letting them stay on. It's been a long standing practice to let people create slums if they agree to vote for the ruling party. 2. Slum dwellers have smaller incomes and they quite frequently engage in petty crimes and many times participate in organized crimes. They don't pay taxes and don't have any identity or address and hence are very difficult to watch or monitor. It's very necessary for Mumbai to solve this problem.

[Nova]

Nice idea but it's going to be tough to do this. Unlike China where there is mass movement of people on the order of the commie govt. Democratic countries like India face a bigger challenge.

[suma25]

i think itsa very good idea if its done in a transparent and ethical manner.Yes it will be difficult. This slum redevleopment plan is for vakola slums near santacruz. it will be a township of sorts.There is another airport slum redevelopment taking place by hdil where they have started building a township for the people(about20,000 families) with schools,hospital and place of worship abt 5 kms away from where the slums are.If this slum redevelopment takes place successfully .Then most of the slum redevelopment such as these will get a boost

[Lurker]

“We are looking at it as an assembly line kind of business model' date='” Chandra, 37, said. [b']“If you make an affordable product, the margins will be lower, but the capital will churn much faster, so your return on equity will be much faster.” Success for Unitech will depend on government laws, Chandra said. The company, which began selling its Unihomes brand of budget housing in Bhopal, hasn’t built such properties in its biggest market near New Delhi because of rules restricting the number of residents in its housing complexes, he said. The Unihome brand sells property for about 2 million rupees, according to the company’s Web site.

Mumbai get ready to get f$cked even more on the traffic issues. It is interesting to see how the Developers mention building houses the same as manufacturing cars - assembly line technique. With building cars you have to only have to worry about building cars, with building houses you also have to worry about basic facilities - sanitation, roads, parking etc etc. Of course the budding Indian builders refuse to beleive in all this. Delhi example is an interesting one. From a city who probably had the best roads in India it is now a city where nobody can drive thanks to all the highrises and so many cars on the road. And which Indian metropolis town has properties selling for 2 million rupees these days? I would like to buy a few properties...

[suma25]

Mumbai get ready to get f even more on the traffic issues. .

mumbai is already ****ed on traffic issues.The only decent road is the link road and the highway and that also remain clogged during peak hours not the entire stretch but only some areas. well the bmc planned on introducing congestion taxes but the public's reply is give us good roads then think of congestion tax.In other words :finger:to bmc. By the yr end mumbai will have its own monorail and metro let see how much it reduces the traffic on the road.