Luxury residential projects fall out of favour in Mumbai
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
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Consumer demand has shifted to midsized homes