Lux­ury res­i­den­tial projects fall out of favour in Mum­bai

HT Estates - - FRONT PAGE - Bidya Sa­pam bidya.s@htlive.com

Why and how did this con­cept hap­pen? Cre­ators of co-work­ing space have us be­lieve that for a long time small and medium scale com­pa­nies (SMEs) have strug­gled ex­ist­ing with the con­ven­tional of­fice for­mat. “It’s a cor­rec­tion over all the mis­takes made by the providers of con­ven­tional of­fice spa­ces as well as busi­ness cen­tres.” Ac­cord­ing to Amit Ra­mani, Founder, Aw­fis, a co-work­ing space spread across nine cities- “It’s a huge re­fine­ment over the busi­ness cen­tre model which could not de­liver on its prom­ises of be­ing ei­ther rea­son­able or flex­i­ble work space. A busi­ness cen­tre was char­ac­terised by min­i­mum 12 month lock-in pe­riod, an en­try fee, an exit fee, and ad­di­tional charges for tea/cof­fee and con­fer­ence rooms with the ba­sic struc­ture de­signed to be opaque cab­ins rather than in­ter­ac­tive work spa­ces. Now ev­ery­thing wrong with con­ven­tional of­fice real es­tate in In­dia is sorted with co-work­ing spa­ces. Co-work­ing spa­ces al­lows you to use a space from as low as one hour to five years. The low­est en­try point is one hour. Also the charges are as low as Rs 5,000 for a flexi seat per month and you can even use a four seater cabin for a day at Rs 450 with bev­er­ages and wi fi in­cluded. The third fac­tor is they are ac­ces­si­ble. Co work­ing spa­ces are present in vir­tu­ally ev­ery pop­u­lar mi­cro­mar­ket in a city – so if I stay in Vas­ant Kunj, I want my of­fice to be in Vas­ant Kunj. Hence we make sure our of­fices are ac­ces­si­ble and we are present in ma­jor mi­cro­mar­kets such as Mayur Vi­har, Vas­ant Kunj, Gu­ru­gram etc.”

The co-work­ing spa­ces typ­i­cally of­fer four for­mats of work­ing space. First is the flexi seat which is not ded­i­cated work sta­tion but has locker space avail­able for a month at Rs 5,000. Sec­ond is the fixed seat which comes at Rs 7,000-12,000/month. Third is the Cabin seat with a two seater, four seater, six seater avail­able for any­thing be­tween Rs 8,000- 20,000/ month and fi­nally the Be­spoke spa­ces which are the un­der­utilised spa­ces in ho­tels and malls con­verted to shared workspaces ex­am­ple Aw­fis has some workspace at Taj Dec­can and malls in Mum­bai, Pune. How­ever the pri- ces vary across cowork­ing space providers. At GoWork, where a stan­dard sin­gle cu­bi­cle with a couch at a space of 120 sq ft comes at Rs 12,000 per seat for a pro­fes­sional, there is also a pack­age of Rs 16,000 where one can get un­lim­ited beer* (*3 beers a day). For C-level em­ploy­ees, there are pre­mium pack­ages are avail­able at Rs 30,000- 45,000 per seat. An­other co-work­ing space called Co-Of­fiz which has of­fice cen­tres at Preet Vi­har, Ne­taji Sub­hash Palce and Janak Puri has very com­pet­i­tive charges. Ac­cord­ing to Prachi Agrawal Co-Founder- “Our plan starts at Rs 400/day pass. We also of­fer free trial for our clients. We charge Rs 7,500 per seat for pri­vate cab­ins and Rs 5,500 for open seats.”

Who are the big­gest tak­ers of co-work­ing spa­ces? The big­gest con­sumers are SMEs or small and medium en­ter­prises. Be­sides, start ups, free­lancers and en­trepreneurs are also tar­get au­di­ence. Re­cently Priti Paul, Di­rec­tor Apee­jay Sur­ren­dra Group launched a co-work­ing space called ABC at Cy­ber­hub, Gu­ru­gram (af­ter Kolkata and Hy­der­abad) with spe­cial priv­i­leges tai­lor made for women en­trepreneurs and those that women- led and women owned start-ups. Says Paul, “I feel that women can thrive only in uniquely po­si­tioned work spa­ces. My co-work­ing space is for WWW or “won­der women at work” who have to jug­gle it all. My aim has been to cre­ate a woman and fam­ily-friendly col­lab­o­ra­tive co-work­ing of­fice space and the ‘ABC for Women at Work’ scheme cre­ates the con­di­tions for life-work-health bal­ance with men­tor­ing ses­sions, Yoga, well­ness, self- de­fence work­shops, be­sides get­ting books, gro­cery and healthy food de­liv­ered to their ABC workspace at dis­counted rates. These are a few of life en­hanc­ing ser­vices.”

An im­por­tant fea­ture of co-work­ing spa­ces is in­ter­ac­tiv­ity that is at­tained through in­clu­sive de­sign, and en­gag­ing ac­tiv­i­ties. A wine tast­ing ses­sion on the week­end, a culi­nary week with MasterChef com­pe­ti­tions, to a morn­ing fit­ness party are all ways to build bonds within the co-work­ing com­mu­nity. MUM­BAI: Real es­tate de­vel­op­ers in Mum­bai have shifted fo­cus from sell­ing ul­tra-lux­ury projects to ei­ther com­plet­ing them or build­ing mid- in­come or smaller homes. The change in strat­egy comes fol­low­ing sub­dued de­mand for lux­ury homes in the coun­try’s fi­nan­cial hub amid an over­sup­ply. Launches of homes cost­ing more than ₹ 10 crore have fallen in the past two years in the key ar­eas of cen­tral and south Mum­bai.

Launches in the uber-lux­ury seg­ment fell 1% to 194 units in the first half of this year, ac­cord­ing to prop­erty con­sul­tant JLL In­dia. In com­par­i­son, to­tal launches in the Mum­bai realty mar­ket jumped 44% dur­ing the pe­riod.

In the first half of 2016, 280 lux­ury realty projects were launched in south Mum­bai.

Mum­bai-based Omkar Real­tors and De­vel­op­ers Ltd, which is build­ing its largest lux­ury project ‘1973’ for the past five years, has halted sales to cus­tomers. Lo­cated in the posh Worli neigh­bour­hood of south Mum­bai, the project com­prises three tow­ers with more than 300 apart­ments, of which nearly 100 are yet to be sold.

Omkar has closed book­ings for ‘1973’ for the last four to five months and will re­sume sales only by the end of this year when two tow­ers are near com­ple­tion, said Bab­u­lal Varma, man­ag­ing di­rec­tor.

“Peo­ple are moreen­thu­si­as­tic to buy com­pleted projects now. We took a call to com­plete the project first and then open up for sale again when the mar­ket is bet­ter. We hope to fetch a good rate by then,” Varma said.

He said Omkar’s will fo­cus on build­ing smaller apart­ments. The com­pany is sell­ing homes for around ₹1 crore each at its newly launched 65 acre mixe­dused de­vel­op­ment Omkar In­ter­na­tional District (OID) at And- heri.

Ac­cord­ing to real es­tate bro­kers and con­sul­tants, sales of large-sized lux­ury homes cost­ing above ₹10 crore have been ex­tremely slow in the last three years. While con­sumer de­mand has in­creas­ingly shifted to mid­sized and com­pact homes, the im­po­si­tion of a 12% good and ser­vices tax (GST) has also damp­ened lux­ury home­buy­ers. This has also made con­sumers pre­fer com­pleted apart­ments where GST is not levied.

“Lux­ury homes are a lesser pri­or­ity at the mo­ment. The fo­cus for most­builders right now is to build smaller homes and make it af­ford­able for home­buy­ers. Sizes have come down to the tune of 25-30% in the last five years,” said Sa­man­tak Das, chief econ­o­mist and head of re­search at JLL In­dia.

HBSReal­torsLt­d­has­de­ferred plans to sell two of its on­go­ing sea-fac­ing lux­ury projects in south Mum­bai. Two years ago, the com­pany an­nounced grand plans to build ul­tra-lux­ury projects aroundMarineLines, Worli and Haji Ali area with each apart­ment cost­ing above ₹14.5 crore.

San­deep Shah, man­ag­ing di­rec­tor of HBS Real­tors, said the com­pany aims to raise funds to com­plete the projects in­stead of ac­tively sell­ing the apart­ments.

“Peo­ple want to come in when they see much lesser risk of de­liv­ery es­pe­cially for high-end homes. Plus buy­ing com­pleted homes end up sav­ing a lot of money in terms of tax­a­tion due to the cur­rent norms of GST,” Shah said.

Some builders have blamed an over­sup­ply of pre­mium homes par­tic­u­larly in prime lo­ca­tions like Worli and Lower Parel. The last four-to-five years have seen launches of sev­eral ul­tra- projects around these ar­eas. For in­stance, Worli cur­rently houses some of the largest ul­tra-lux­ury projects in Mum­bai such as Oberoi Realty’s 360 West, K Ra­heja Corp.’s Vi­varea and Arte­sia and Ahuja Tow­ers among oth­ers.

In Lower Parel, real es­tate firms such as Lodha Group and In­di­a­b­ulls Real Es­tate are build­ing lux­ury res­i­den­tial projects.

“De­mand for lux­ury homes is still there but at the right lo­ca­tion. Worli and other cen­tral lo­ca­tions of Mum­bai have be­come very crowded. The prob­lem is far more in­tense where there is over­sup­ply,” said Ka­mal Khetan, chair­man, Sun­teck Realty Ltd. The com­pany, which built uber lux­ury homes like Sig­na­ture Is­land and Sig­nia Isles at Ban­dra Kurla Com­plex, is cur­rently fo­cussed on launch­ing mid-sized and af­ford­able homes in the city. “In the next six months, more of our launches will come in the mid-in­come group and as­pi­ra­tional lux­ury seg­ments,” he said.

SALES OF LARGE­SIZED LUX­URY HOMES COST­ING ABOVE ₹10 CRORE HAVE BEEN SLOW IN THE LAST THREE YEARS

MINT/FILE

Wel­come to the world of col­lab­o­ra­tive work­ing where your next­door neigh­bour is a col­league from an­other start­up

GETTY IM­AGES

Con­sumer de­mand has shifted to mid­sized homes

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