Mumbai: The luxury property market may be waning in India’s financial capital, but there’s no dearth of takers for old, iconic bungalows in south Mumbai, typically priced between 200 and 400 crore.

At least ten such marque bungalows are up for sale, especially at posh neighbourhoods such as Nepean Sea and Carmichael Road, said real estate consultants.

They include the historic Laxmi Niwas bungalow, K.C. Thapar-owned Madhusudan House and United Spirits Ltd’s Niladri.

In Malabar Hill, where properties cost between 70,000 to 1.2 lakh per square foot, an 80-year-old bungalow, known as Himmat Niwas, is close to finding a buyer.

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The two-storey building has recently caught the fancy of a few business families and builders seeking a foothold in south Mumbai, said a person closely involved with the transaction.

“We have found some inroads into selling this property and have been in active discussions with 4-5 business persons. Transaction may happen in the next two-three months," the person said.

The bungalow is likely to be sold at 230 crore, lower than the initial asking price of 270 crore two years ago, this person said.

Under the new owner, the bungalow may be converted into a private home or a high-end residential tower, like many others in the neighbourhood.

Himmat Niwas is among the few old bungalows remaining in the island city as high-rises start to dominate its fast-changing skyline. Owners of several such valuable assets are now exiting, as they no longer find relevance for them or for need of funds.

Such bungalows have, however, attracted ultra-rich individuals, wanting to use them as their private residences, as well as builders, who see a huge opportunity in redevelopment in the island city, where finding vacant plots is a challenge.

Now, with the new Development Plan 2034 that seeks to increase Mumbai’s land development potential, such bungalows are likely to become lucrative projects for local builders, said real estate brokers.

Mumbai-based Naman Group, which recently bought a 25% stake in Kilachand House, plans to develop the open area of the complex, spread over two acres, into a luxury residential project, a company executive said on condition of anonymity.

Located at Nepean Sea Road, the bungalow is considered to be city’s last remaining palace. The Kilachand family currently has a 50% stake in the bungalow, with real estate company Orbit Corp. owning the remaining 25%.

“We will retain the bungalow but sooner or later, the open area behind the building will be developed," the executive said.

Ashish Shah, chief operating officer at Radius Developers Ltd said old bungalows offer a sweet spot for developing boutique luxury projects with fewer apartments in a prime location.

In April, the Mumbai-based developer bought Ram Mansion, a century-old bungalow at Nepean Sea Road for around 235 crore. Construction of a luxury housing project has already commenced at the site.

“We are constantly looking at such opportunities of relatively smaller plots where such bungalows are housed. It offers a unique project size which are not so big. All I have to do is sell 8-20 apartments and get out of it," Shah said.

Acquiring older bungalows is, however, not easy.

Family disputes, litigations as well as differences over prices have often slowed down the pace of transactions. Real estate advisors said owners of such bungalows have lately turned more realistic given the slowdown in the realty market.

Though transactions are mostly end-user driven and outright purchases, some builders are even signing joint development deals with the owners, they said.

“There is an inventory of bungalows that can be redeveloped. The gestation period of such transaction is about 12-18 months as it has to go through several approvals," said Gautam Saraf, managing director, Mumbai, at Cushman & Wakefield, a property consultancy.

So far, the real value of such properties is mostly driven by an end-use and consumption perspective rather than its development potential. “The new DP will give now more development potential to such properties," Saraf said.

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