Redevelopment is driving up residential rentals in Mumbai western suburbs

With hardly any land pockets available in the prime western suburbs in Mumbai, new residential apartments are being built mostly through redevelopment of older properties. This trend is being witnessed across large pockets in Borivali, Kandivali, Malad, Khar, Bandra and Santacruz. Since the developer has to provide the owners of the property under redevelopment, accommodation in another building, it is resulting in increased demand for rental properties, driving up rentals.


Says Anuj Puri, Chairman, ANAROCK Group, “In many of the western suburban localities like Bandra, Andheri, Malad, Goregaon, Ville Parle, Santa Cruz and Kalina there is absolutely no available land bank. Most of the housing societies are very old and in a dilapidated condition. Hence, redevelopment has become the norm where the appointed developers need not buy land but instead take charge and reconstruct the housing project, benefitting both the residents and themselves. Moreover, redevelopment helps the developer to build in a prime location.” Says a senior broker operating in Western suburbs, “A client has been looking for a 1 BHK flat in Jawahar Nagar (Goregaon West) and is willing to pay Rs.30-35,000 per month but no flats are available.” He also says that in prime locations like BKC, the rentals of a project like Kalpataru Sparkle have escalated from Rs 1.75 lakh per month (3 BHK) in 2021 to Rs. 2.2 lakh per month.


Most owners of properties undergoing redevelopment prefer to lease flats in adjacent buildings in order to maintain continuity in their lives. This creates a glut of supply in the micro-market. Usually a new building takes upto 3 years to get completed and the owners of the old property get annual rental upfront from the developer, till the new building is ready. The developer also offers a certain annual increase in the rental, till the old property is redeveloped and the new flat is handed back to the owner.

Says Shalin Raina, Managing Director, Residential Services, Cushman and Wakefield, “Redevelopment activity is keeping the rental markets high as there is a lot of demand from tenants whose homes are going for redevelopment and they are willing to shell out higher rents as they get financial support from the builder.”

“In areas like Borivali and Kandivali it is difficult to get good flats as the demand is high and supply is low,” says a seasoned broker operating in Kandivali East. “While last year the rents in Thakur Complex (Kandivali East) were at Rs 22000 per month for a 1 BHK, it has gone to Rs. 28000/29000 per month this year” he says.

Says Pramod Vyas, Governing body member, National Association of Realtors, India, “Redevelopment activity in the city has really picked up post COVID as the government has been giving approvals for the same at a fast pace. This has resulted in a lot of redevelopment activity not only in the Western suburbs but also in Navi Mumbai and Harbour line areas. Referring to a Lodha project in Wadala, he says that the rentals were Rs. 55000 per month (for a 2BHK) in 2020 and these have now gone to Rs. 1 lakh 10,000 per month and even at that price not too many options are available!”

Another reason for rental markets to remain firm is that post COVID, employees have been asked to report back to work. Most employees have returned from their native places and rental accommodation is again in demand.

Says Anuj Puri, “Rentals have been heading north ever since offices and schools resumed offline post the pandemic. If we are to consider the ANAROCK data, residential rentals in some of the key markets in MMR (let’s take prominent markets in Western Express Highway including Borivali, Kandivali, Malad, Goregaon, Andheri and Dahisar) have seen 16% to 28% increase between 2018 and 9M 2023.”