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After the robust August property registration data, especially for Mumbai, confidence seems to have improved among listed real estate developers. With the festive season coming up, many of them have planned aggressive launches. However, some micro markets, especially in the key Mumbai Metropolitan Region, are grabbing increased attention of listed real estate developers.

For instance, better connectivity and improving social and physical infrastructure such as schools, hospitals and malls have led to the rising popularity of suburbs such as Bhandup and Mulund among developers, analysts said.

“Mulund-Bhandup has accounted for around 40% of new launches over the last decade and the trend is likely to continue with the entry of large Grade-A developers. Supply has largely been skewed towards large reputed builders and the demand has been largely driven by mid-premium segment ( 10-20 million ticket size and 2/3BHKs) and cater to around 45% of absorption in the micro market," Antique Stock Broking Ltd analysts said in a report.

Oberoi Realty Ltd, Macrotech Developers Ltd (Lodha) and Prestige Estates Projects Ltd are some of the listed firms that have exposure to this region. Among the three, Oberoi Realty entered this area with the launch of its luxury projects Eternia and Enigma in January 2015. Lodha has recently launched a project in Mulund East of around 0.60 million sq. ft in the mid-premium category. Bengaluru-based Prestige Estates will be making its debut in the Mumbai market with the launch of its Cosmos project in Q3FY22 with two towers in the first phase.

A gradual uptick
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A gradual uptick

“In our view, given right sizing and right pricing coupled with underlying stronger demand in residential real estate, Lodha and Prestige projects are expected to do better. Oberoi is expected to face incremental competition from these new offerings, which can further dent its sales velocity," added the Antique report.

Not just listed developers, many unlisted but large real estate firms too have projects in this area. These include the Kalpataru Group, Wadhwa Group and Runwal Group among others. Analysts say that while this market has its positives, cracking it in terms of higher sales would be challenging. Also, given the elevated supply, the improvement in absorptions would be gradual at best, they added.

“Mulund has dense and quality social infrastructure, besides the important factor of being located within Mumbai (road) toll points. In addition, pricing is what makes Mulund lucrative for customers and developers. Average residential price range on a per sq. ft basis in the Mulund-Bhandup area is around 20,000-23,000. Also, developers are giving 2-3% discount on ready projects and higher on under-construction projects," said Vivek Rathi, director research, Knight Frank India.

“This factor makes these areas a good alternative to Thane, where prices are higher or similar for select projects," he added.

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