In what could become one of the most expensive and high-end commercial spaces in the country, Unitech Ltd, India’s second largest property developer, is developing a superluxury commercial property in the heart of Mumbai in the Bandra-Kurla Complex. The development cost of the project is around $1 billion (about Rs3,900 crore), a person familiar with the development said.
Unitech will build the complex on 80 acres of land in the Bandra-Kurla Complex in a joint venture with the land owner, this person, who did not wish to be identified, said. The value of the land is Rs4,000 crore. Unitech will pay around Rs2,000 crore for the land to the land owner, staggered over a few years, the person added. The joint venture with the land owner is on a revenue-sharing basis and the superluxury complex will be a commercial complex with retail space on the lower level, the person said. It will also have a hotel in it. The entire project is expected to be completed in five years.
The Bandra-Kurla Complex has emerged as an alternative central business district in Mumbai
Unitech has hired one of the world’s top international architects for the project. The complex will be designed by Skidmore, Owings & Merrill Llp., which designed Burj Dubai, which will be the world’s tallest building when it’s finished in 2009.
This will also be Unitech’s first commercial project in Mumbai, one of the fastest growing real estate markets in India after New Delhi and its suburbs. The company is already developing a 20-acre residential township in Virar (West) in Greater Mumbai.
Real estate developers have been rapidly expanding their footprint across India to mitigate the geographical risks associated with having operations in one location.
This has seen DLF Ltd, Parsvnath Developers Ltd and others expand their operations outside New Delhi to other mega cities such as Mumbai.
Unitech’s project will release a total of 9 million sq. ft. In the initial phase, around 2 million sq. ft of land will be developed. While Unitech has an existing partnership with international hotel chains such as Marriott International and Carlson Hotels, the company has not yet decided on its hotel partner for Mumbai, the person familiar with the development said.
The Bandra-Kurla Complex within which the property will come up is one of the most sought after real estate pockets in Mumbai. The complex is spread across 370ha and has offices, banks and other business establishments.
According to the Mumbai Metropolitan Region Development Authority, the Bandra-Kurla Complex is an alternative location (to traditional commercial districts such as Nariman Point) to absorb the growth of offices and commercial activity in Mumbai and is also a location where some of the existing commercial activities from South Mumbai can be relocated.
Land prices in the Bandra-Kurla area have spiralled since the early 1980s, when the complex was first developed. According to real estate consultant Cushman & Wakefield, the price of land in this area is currently around Rs26,000 per sq. ft, making it the third most expensive location in the Mumbai region after Nariman Point and Worli.