MUMBAI: One of the oldest real estate developers in Mumbai, S Raheja Realty has moved into Varanasi to develop 140 apartments totalling over two lakh sq ft.
Ram S. Raheja, Director, S Raheja Realty, said it was a joint development project and local response has been good , considering that it would be 14-storey complex and among the first high-rise buildings with basement parking in the city.
With over 3.5 lakh sq ft under development, Raheja feels that prospects today are brighter in tier 2 and tier 3 cities. The company is also looking to move into other cities such as Kolkata, Indore and Chennai. It has a presence in Pune.
Asked about Mumbai real estate, Raheja said it was saturated. The company preferred redevelopment work as returns were assured without the burden of paying for the land. The pricing of apartments could also be pre-determined. Moreover, the free sale component with the builder in prime locations such as Bandra and Khar, where the Rahejas prefer to work, can be easily disposed of.
There are about 19,000 dilapidated properties in the city occupied by over 20 lakh families, which qualify for redevelopment. In the late Seventies, the Government levied a cess on the buildings for repair and maintenance as landlords were unwilling or could not meet the expenses with rentals frozen by the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. Developers say there are many cases where the landlords could not be even traced.
Redevelopment is big business in Mumbai, where old societies seek re- construction of their homes free with the developer making good his margin and investment through a free sale component, which is the additional space he builds over and above the owners’ share.
Last year, the Rahejas launched a mid-income housing project in Palghar, a distant suburb, on a seven-acre plot. With over 90 per cent bookings, the company is looking to work on the second phase. This apart, the company has three redevelopment projects. The company is also working on a high-end luxury offering at Lonavala.