Mumbai's Skyline Continues to Soar Amid Rising Pressure on Housing Market

Mumbai's Skyline Transformed: Foreign Investment Fueled by Growing Demand for Luxury Real Estate

Mumbai, a bustling island city, is witnessing a surge in demand for luxury real estate, driven by foreign investment and the aspirations of its residents. The 41-story Altimus tower in the Worli neighborhood, a former fishing village turned elite residential address, is home to prestigious financial institutions such as Barclays, BlackRock, KKR, Morgan Stanley, and UBS Group.

The city's low-income neighborhoods, however, are on the cusp of transformation. Taxi driver Ramu Virmale, a resident of a low-income pocket in Worli, is attempting to negotiate a real estate deal that will enable his community to upgrade to modest but modern new apartments. This story is being repeated across Mumbai, where almost a quarter of the 21 million residents live in sprawling slums.

As foreign banks and asset managers scramble to find room to expand, the fate of billions of dollars in real estate deals hangs in the balance. The hopes and ambitions of cleaners, drivers, laborers, and other service industry workers are tied to the success of these deals. "Rich or poor, we should all live with each other," Virmale says. "We too want clean, good-quality, sea-facing flats. That cannot only be for the rich."

Demand for Mumbai property is expected to rise exponentially, predicts Niranjan Hiranandani, billionaire owner of the Hiranandani Group. However, this growth comes with a challenge: rehoming 5 million people.

Real Estate Prices and Amenities

Prices for some apartments in Worli are now on par with parts of New York, with developers incorporating amenities such as infinity pools, pickleball courts, and other luxury features to attract analysts and traders. Skilled workers prefer not to travel far in a city notorious for its traffic jams and crowded public trains and buses. Companies want large, new offices that can accommodate their growing ranks in one location. "If you want to get the best talent, you can't put them in a shabby office," says Anshuman Magazine, chairman and CEO of CBRE Group Inc. in India, Southeast Asia, Africa, and the Middle East.

| City | Office Rents Growth (Last Year) | | --- | --- | | Mumbai | 23% | | Manhattan | 3% |

Office Space and Skyscrapers

Mumbai's main business hub, the Bandra Kurla Complex, is full, with tenants including Apple Inc., Carlyle Group, and Qatar's sovereign wealth fund. Analysts estimate the city will add 350 skyscrapers in the coming years. Citigroup Inc., HSBC Holdings Plc, and other foreign companies are hunting for hundreds of thousands of square feet of office space. Some businesses face waits of three to five years for new properties.

Investment and Development

Chiang Ling Ng, co-head of real estate investment management at Hines, says the American investment firm has "never been this busy" in India. It's helping build a property in BKC and developing 300 luxury lake-facing residences in Powai, alongside Japan's Sumitomo Corp. "It is the young population, the English-speaking environment," Ng says. "All these things contribute to corporations' interests to have staff in India."

Redevelopment and Rehabilitation

In Dharavi, a massive redevelopment led by billionaire Gautam Adani's real estate company is underway. The project will build apartments for residents, public infrastructure, commercial offices, and residential towers for sale on the market. Some residents have independently sold small plots to other local developers. Apartments built in the area are selling for over $160,000 on the open market.

However, not everyone is willing to move out. Shaikh Ashab Ali, a 29-year-old tour guide, lives with his parents and extended family in a two-story building on 250 square feet of land. His forebears first moved into the area in the 1800s. The family has refused to move out, citing concerns about finding alternative accommodation and preserving their current living space.

Developer's Perspective

Prestige Group's Irfan Razack says the company is working with its land partner, DB Realty, to build an apartment complex for 4,041 families who lived on the land before. The complex will have Waldorf Astoria-branded luxury apartments next door. Razack says, "We are going to change the landscape of the city."