Real Insights: Real Estate Overview East April-2015

Executive Summary

Andheri, a western suburb in , has metamorphosed over the last several years to become one of the most sought-after regions in the city. It has transformed into being one of the posh regions in the financial capital, largely in demand by Bollywood stars and TV personalities and other high net worth individuals. The suburb is essentially divided into East and West regions.

The following report tries to identify the various factors that led to the realty growth in Andheri East. Until recently, the eastern zone hadn’t seen much realty growth in comparison to its western counterpart. However, a slew of initiatives to boost infrastructure in the area has slowly started putting the area on equal footing with its western counterpart.

Further, the report identifies the present real estate market scenario in terms of housing sale and rent, the key real estate trends, the top builders and projects available, the civic issues, the opportunities available for area’s future growth, amongst others.

To summarize, Andheri East is currently on a realty growth track. The area does not offer affordable housing as such and is increasingly becoming popular among the higher income group for both purchase and rent. Considering the planned infrastructure initiatives and the increasing demand for housing, one can expect a considerable growth in the area’s real estate market in the near future.

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Index

Executive Summary ...... i Index ...... ii List of Maps ...... iii List of Figures ...... iii List of Tables ...... iii Introduction ...... 1 Connectivity and Infrastructure ...... 1 Major landmarks ...... 2 Civic issues ...... 2 Latest Updates ...... 2 Regulatory updates...... 2 Important deals ...... 2 Market Outlook ...... 2 Residential launches from 2013-2015...... 3 Major builders and projects ...... 3 BHK-wise and segmentation split from 2013-2015 ...... 4 Price trends ...... 4 Property prices ...... 4 Weighted Average Price (WAP) ...... 5 Resale trends from 2013-2015 ...... 5 Housing rentals from 2014-2015 ...... 7 Rental yield ...... 7 SWOT analysis ...... 8 Key points ...... Error! Bookmark not defined.

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List of Maps

Map 1: Andheri East: Location and Context ...... 1

List of Figures

Figure 1: Units launched in Andheri East, 2013 - 14 ...... 3 Figure 2: BHK wise unit availability...... 4 Figure 3: Classification of housing segments ...... 4 Figure 4: Average property prices in Andheri East, 2013 - 15 ...... 4 Figure 5: Weighted Average Price (WAP) in Andheri East & West, 2014 - 15 ...... 5 Figure 6: Type of residential units available for resale ...... 6 Figure 7: Configuration of units available for resale ...... 6 Figure 8: Average resale prices in Andheri East, 2014 - 15 ...... 6 Figure 9: Avg. rentals per sq. ft. in Andheri (E) and Andheri (W), 2014 ...... 7 Figure 10: Avg. rental yield in Andheri East since 2014 ...... 8

List of Tables

Table 1: Important infrastructure projects in Andheri East ...... 2 Table 2: Major developers and projects in Andheri East...... 3 Table 3: Characteristics of different BHK types for resale ...... 6 Table 4: Average rentals in Andheri East ...... 7 Table 5: Average rentals in Andheri West ...... 7

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Introduction

Map 1: Andheri East: Location and Context

(Source: Google maps)

Andheri, once a regular western suburb, is currently touted as one of the most sought-after region in Mumbai for rent and purchase of property. Similar to few other suburbs in the city, this region is also divided into western and eastern zones. Unlike its western counterpart which is essentially a posh residential area, Andheri East is mostly known for being an industrial and commercial hub. Moreover, there is high demand of property from the mid-segment category. Residential real estate in the area is cheaper than that in the upscale western neighbourhoods of and Andheri West. Nonetheless, Andheri East is gaining immense popularity in recent times, somewhat similar to its western counterpart.

Connectivity and Infrastructure

Andheri East is well connected to various parts of Mumbai via road and rail. Some of the important roads and highways that provide connectivity to the area include Airport Link Road, the newly-built Sahar Elevated Road and Link Road (JVLR). (WEH), which is part of NH-8 also passes through the area. is an important station on the western line of the . Andheri East has two metro stations in its proximity - one at WEH and the other in Azad Nagar. There is one more metro station planned at Santacruz Electronics Export Processing Zone (SEEPZ) SEZ. Both the domestic and the international terminals of the Mumbai International Airport are also in close proximity to the area.

Besides enjoying great connectivity to other areas in Mumbai, Andheri East is also close to several business and industrial parks. SEEPZ is just about 1.5 km away while Bandra Complex (BKC) is just about 7.5 km away.

The area has good social infrastructure with several educational, healthcare, business and commercial establishments. Since Andheri East was essentially developed as an industrial area unlike it western counterpart, it caters to different kind of audience than that of Andheri West. The amenities also differ accordingly. For example, Andheri West has more shopping malls and arcades while Andheri East has more street retail outlets.

Some of the important infrastructure in and around the area is as follows.

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Table 1: Important infrastructure projects in Andheri East

Current infrastructure Planned/Upcoming infrastructure WEH passes through Andheri (E). Sion- Brihanmumbai Municipal Coporation (BMC) is Expressway passes close to the area. Other planning to construct a flyover between Telli Galli important roads are JVLR, Sahar Elevated Road and NS Phadke Marg Junction, to reduce and Airport Link Road congestion. First line of passes through it. Planned metro station at SEEPZ. Nearest metro stations are Azad Nagar and WEH Lies on the western line of Mumbai suburban railway Mumbai International Airport is very close to the area. SEEPZ, housing the electronic hardware manufacturing companies and software companies is in the area. Also close to (BKC) (Source: Real Insights by CommonFloor.com)

Major landmarks

Mangala Hospital, Seven Hills Hospital, Big bazaar Express, Kalpataru Estate and SEEPZ SEZ

Civic issues

- The area is closer to slum pockets. Hence, some parts of the locality face some civic issues such as behavioural problems of slum dwellers, improper garbage disposal and garbage related diseases. - There are also reports of drainage and solid waste management related issues in the locality. - Lack of street lighting along footpaths is a concern in the locality. - Irregular water supply is also a major concern here. - The road and traffic conditions are bad in the area with roads filled with sand and dirt, primarily due to the metro rail work. Besides uneven roads and potholes, there are major bottlenecks on certain roads in the area, junction being a classic example. - There are several illegal encroachments on roads including Saki Naka, main road and Mahakali Caves Road. Latest Updates

Regulatory updates

- The new Mumbai Development Plan (DP) 2034 drafted by BMC has suggested granting an FSI of up to 8 in parts of Mumbai. According to the plan, highly crowded areas in suburbs such as Andheri and Bandra, where multiple modes of mass transport coverage, will also have an FSI of 8. (Feb., 2015)

Important deals

- Developer Omkar Realtors & Developers has tied up with Raheja Group to develop a luxury project in Mumbai. The residential plot is about 7.5 acre large, located on the Western Express Highway at Andheri, and is owned by Raheja Group as part of a slum-redevelopment scheme. (Sep., 2014)

Market Outlook

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Andheri East has grown to be one of the most sought-after real estate markets in Mumbai in recent years mainly due to its location and its growing infrastructure. With the business districts in the city slowly shifting base from towards the central and , the demand for housing in nearby suburbs began growing. This led to growth in infrastructure and eventually property prices in these suburbs. While areas such as Bandra, and Khar witnessed faster growth in real estate prices due to a focused development, Andheri East saw relatively slower growth, mainly due to the type of business establishments and the profile of people who settled down here. Initially, the locality saw relatively lesser demand and prices remaining lower in comparison to its expensive neighbourhood.

However, with the latest development in infrastructure and connectivity, Andheri East has started attracting people from all segments, leading to high growth in demand for property sales and rentals. Areas such as Chandivali, Marol, JB Nagar, Sakinaka and few other localities have grown well over time. Chandivali, in particular, is a good bet for investors and end users since it offers townships and has quality construction by reputed builders. It is also close to the Sakinaka metro station.

Residential launches from 2013-2015

Andheri East has witnessed an interesting trend in housing launches. While there has been a steady growth in demand for housing here, the number of units launched has reduced in the last two years. The following graph (Fig 1) shows the trend of residential unit launches since 2013.

Figure 1: Units launched in Andheri East, 2013 - 14

(Source: Real Insights by CommonFloor.com)

Figure 1 indicates that the number of units have decreased by almost 27 per cent from 2013 to 2014. The first quarter of 2015 has seen only about 100 units launched by Lodha Group, according to CommonFloor data. As observed, there is also a slight demand-supply mismatch in Andheri East as most of the units launched cater to the luxury and ultra-luxury segment whereas demand is higher for mid-segment properties. Also, the slump in the country’s economy and Mumbai’s real estate market over the last two years has led the developers to focus less on project launches and more on completion of their earlier- launched projects.

Major builders and projects

The following table gives some of the major builders and projects in Andheri East.

Table 2: Major developers and projects in Andheri East

Developers Projects Total BHK Project Expected Yr. of Units availability Status Completion Crescent Group Crescent Residency 80 1 and 2BHK Ongoing Aug 2016 Ashapura Options Pvt Ashapura Options 80 1 and 2BHK Ongoing Feb 2016 Ltd Palazzio Oberoi Realty Ltd Oberoi Prisma 96 4BHK Ongoing Dec 2016 Lodha Group Lodha Codename 100 2, 2.5 and Ongoing Mar 2018 Supernova 3BHK Kanakia Space Pvt Ltd Kanakia Rainforest 720 1, 2, 2.5 and Ongoing Jul 2018 3BHK

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(Source: Real Insights by CommonFloor.com) BHK-wise and segmentation split from 2013-2015

As expected, most of the residential projects available in the area are apartments. The following graphs show the available housing configurations (BHK-wise units) and housing segments (affordable, luxury, ultra-luxury).

Figure 2: BHK wise unit availability Figure 3: Classification of housing segments

(Source: Real Insights by CommonFloor.com) (Source: Real Insights by CommonFloor.com)

Figure 2 indicates that there is maximum availability of 2 BHK units, followed by 1BHK and 3BHK units. Interestingly, there are also a few 4BHK units available in the area. The approximate built-up area of a 1BHK unit is about 550-860 sq. ft. while that of a 2BHK unit is about 660 - 1,340 sq. ft. The built-up area of a 3BHK unit is about 1,245 – 2,000 sq. ft.

An interesting trend observed in Figure 3 is that, unlike earlier, luxury and ultra-luxury properties are gaining popularity in Andheri East. This is probably due to an increase in property prices in the area which is driven by limited land availability coupled with increasing demand and growing infrastructure. The Mumbai metro has also been one of the major drivers of escalating property prices in the locality.

Price trends Property prices

The following graph gives an idea of the property prices in Andheri East since 2013.

Figure 4: Average property prices in Andheri East, 2013 - 15

(Source: Real Insights by CommonFloor.com)

From figure 4, it may be seen that the property prices for 1BHK apartments have not appreciated much over the last two years. Year 2015 hasn’t yet witnessed any major launches in 1BHK apartments.

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However, 2 and 3BHK apartments have seen an appreciation in property values since 2013 with the 3BHK units witnessing the highest appreciation among all the configurations. This shows that there is a good demand for 2 and 3BHK apartments in the area.

Weighted Average Price (WAP)

The following graph (fig 5) shows the current weighted average price in Andheri East and West in the last one year (Q1-2014 to Q1-2015).

Figure 5: Weighted Average Price (WAP) in Andheri East & West, 2014 - 15

(Source: Real Insights by CommonFloor.com)

From figure 5, it may be seen that the weighted average price (WAP) in Andheri East is currently about Rs 14,900 per sq. ft. While the WAP witnessed an increase from Rs 13,500 to Rs 15,600 per sq. ft. during 2014, it suddenly dropped to Rs 14,900 per sq. ft., during the first quarter of 2015. The sudden spike in WAP during 2014 was due to the launch of several projects in the luxury and ultra-luxury segment. Overall, there has been a steady growth in property prices in the area over the last three years. Andheri East witnessed a price appreciation of about 10 per cent during 2014. With the recent infrastructure upgrade such as Mumbai metro, one may look at a healthy appreciation of about 50 per cent in the next 2- 3 years.

The WAP here is also lesser than that of Andheri West. In Andheri West, the current WAP is about Rs 19,000 per sq. ft.

Resale trends from 2013-2015

Andheri is an old suburb with some residential units even as old as 40-50 years. As such, it offers several residential units for resale apart from new projects. The following figures provide a few resale trends.

Figures 6 and 7 give an idea about the type of residential units available for resale.

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Figure 6: Type of residential units available for Figure 7: Configuration of units available for resale resale

(Source: Real Insights by CommonFloor.com) (Source: Real Insights by CommonFloor.com)

One may see from figure 6 that apart from multi-storeyed apartments, few houses and builder floor apartments are also available for resale. The most common units available for sales are 1 and 2BHK units followed by 3BHK units (from fig 7).

Table 3 gives the characteristics of different types of residential units available for resale.

Table 3: Characteristics of different BHK types for resale

BHK Avg. age of Max age of Avg built area Type Property Property (sq. ft) 1 14 43 530 2 10 33 990 3 12 50 1390 4 4 7 2200

(Source: Real Insights by CommonFloor.com)

As one may see from table 3, 4BHK units have been in vogue only within the last 10 years. Most of the apartments available for resale are old 1, 2 and 3BHK units, with some of them being even 40-50 years old.

The following figure gives the average resale prices in the area.

Figure 8: Average resale prices in Andheri East, 2014 - 15

(Source: Real Insights by CommonFloor.com)

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While the project launch prices give an idea about the project prices, the resale prices give an idea about the actual market prices in the area. As seen from figure 8, the resale price is about Rs 19,450 per sq. ft, which has been on a continuous rise over the last one and half year. This means that the average market price in the area is about Rs 19,450 per sq. ft.

Housing rentals from 2014-2015

Besides sale, Andheri East also attracts a significant population looking for rentals. This is usually the working population in SEEPZ or other nearby business districts. According to the latest draft of the Mumbai development plan 2034, approximately 80,000 people in Mumbai travel to SEEPZ for work every day. The following diagrams give the average rentals in the area.

Table 4: Average rentals in Andheri East Table 5: Average rentals in Andheri West

(Source: Real Insights by CommonFloor.com) (Source: Real Insights by CommonFloor.com)

Table 6: Avg. rentals per sqft in Andheri (E) and Andheri (W), 2014

Figure 9: Avg. rentals per sq. ft. in Andheri (E) and Andheri (W), 2014

(Source: Real Insights by CommonFloor.com)

From table 4, 5 and figure 9, it may be seen that the average rentals in the area are lower compared to those of Andheri West. The average rentals per sq. ft. is about Rs 38-42 while that of Andheri West is about Rs 45-50. The average rentals have grown steadily over the last year, primarily due to the increasing number of people wanting to settle down here. The Mumbai metro too has led to an increase in rental demand here.

Rental yield

The following graph (fig 9) gives the rental yield trend since 2014.

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Figure 10: Avg. rental yield in Andheri East since 2014

(Source: Real Insights by CommonFloor.com)

Figure 10 indicates the average rental yield in Andheri East which is in the range of 3.2-3.6 per cent in the last one year. Considering the best average rental yield in the country to be between 3-4 per cent, the rental yield in Andheri East can be considered a good one. SWOT analysis

The following table gives the SWOT analysis of Andheri East.

Strengths Weaknesses

- Has excellent connectivity with other suburbs - Closer to slum pockets. This affects the of Mumbai and other cities via road, rail, attractiveness of the area. metro and air - Battles civic issues such as bad roads, traffic - Is in proximity to SEEPZ and Bandra Kurla congestion, illegal encroachments, bad Complex (BKC) street lighting and improper garbage - Has a good physical and social infrastructure disposal - Property prices and rentals are lower - No longer in the affordable price range compared to more expensive areas such as Bandra and Andheri West Opportunities Threats

- With growth in infrastructure, there is further - Slow development of nearby slums may scope for realty growth affect the attractiveness of the area. - Growing demand for luxury housing from the - Limited land availability may hamper the neo rich potential for future development - With a proper development of nearby slums, more developers and buyers will be attracted to the area - If the proposed FSI of 8 is implemented, a significant number of developers will be attracted to the area

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Key points

The following key points are obtained from the report

- Key drivers of Andheri East’s realty growth are its excellent connectivity to other important areas and key business areas such as SEEPZ SEZ and BKC via road and rail networks. - Proximity to the international airport and fast growing infrastructure are also driving Andheri East’s realty. - The area faces certain civic issues such as proximity to slum pockets, heavy traffic, improper street lighting and illegal encroachments on certain roads. - Andheri East has witnessed a growth in demand. However, due to high prices and unavailability of land, the area has witnessed a demand-supply mismatch. This has led to decrease in residential unit launches in the last couple of years. - Most of the available residential units in the area are 1 and 2BHK apartments, followed by a small number of 3BHK apartments. Almost 42 per cent of the residential units are in the luxury segment (Rs 1.2 – 2 crore) and 33 per cent in mid-income segment (Rs 60 lakh – 1.2 crore). One may also find a few units in the ultra-luxury segment (Rs 2 crore and beyond). Hence, like most parts of Mumbai, this market too doesn’t have properties at affordable prices. - Weighted average property prices (WAP) of new projects in Andheri East is lower than that of Andheri West. The WAP in Andheri East is about Rs 14,900 per sq. ft. while that of Andheri West is about Rs 19,000 per sq. ft. - Andheri East is an old area and as such, it offers plenty of units for resale. Most of the units available for resale are 1, 2 and 3BHK units. Some of them are as old as 40-50 years. - Looking at the resale trends, people still have a preference for old properties with the average age of 10-15 years. - The market price, which may be identified by the resale price is about Rs 19,450 per sq. ft. - Rental in the area too is lower compared to that of Andheri West. While the average rental in Andheri East is about Rs 32-40 per sq. ft., the average rental in Andheri West is about 45-50 per sq. ft. - One may also see that the rental prices in the area are continuously growing owing to the influx of people working in the nearby business establishments. This indicates a healthy demand for rental housing in the area. - The area offers a good rental yield of about 3.2-3.6 per cent. Hence, it offers good investment opportunities for people who want to buy an apartment with the purpose of letting it out for rent.

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Authors

Karthik Kashyap Shankhadeep Chaudhuri Priyanka Kapoor Meha Singla Senior Research Associate Senior Research Associate Sr. Research Analyst Associate Director -Domain [email protected] shankhadeep.chaudhuri@commonfloor. [email protected] Research (Real Estate) Bangalore com om [email protected] Bangalore Bangalore Bangalore

Disclaimer: The document above is written by the Domain Research Team at commonfloor.com, ’s fastest growing real estate website known for its unbiased prognosis in Real Estate sector. The information provided in this report is based on CommonFloor data which is collected from various publicly known sources viz, websites, documents and maps. It should be considered as a guideline and not in absolute certainty. While care has been taken for groundwork, no responsibility is accepted for the accuracy of whole or any part. This information is confidential and the sole property of CommonFloor.com. It should not be reproduced in any form, in part or whole, without prior permission.

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