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Real estate services firm Cushman & Wakefield released this information in a recent research report.

It is estimated that over 500 prime apartments, with an average area of 2,000 sq.ft. or more, are under construction or will be launched shortly in South and Central Mumbai. This additional stock which is slated for release over the next 6-12 months, will help in stabilizing property prices. However, most of it will only be ready for occupation from 2008 onwards.

There is a marked shift in preference for new developments which reflects a lifestyle shift, as these projects offer wellequipped gyms, swimming pools, landscaped gardens, adequate parking facility, professional maintenance and larger areas, often with the flexibility to alter internal layouts.

Newer buildings also have improved standards of construction, state-of-the-art designs, earthquake resistant structures, high-speed elevators and better finish. This preference is strong despite the fact that the property taxes and maintenance costs are exponentially higher in these buildings and the efficiency is poor.

On the leasing front, good quality stock is limited. Rents in South and Central Mumbai have increased by approximately 25% to 30% over the last 12 to 18 months while the rise in the northern suburbs has been even higher. The return on investment (yields) has infact reduced owing to the appreciation in capital values which is to the tune of approximately 40-50% over the same period.

Leasing Transactions
In key leasing transactions, a 3-bedroom apartment in a prime complex in Malabar Hill measuring approximately 1,800 sq.ft. leased for an effective rent of Rs.250,000 per month. Effective rent includes a 10% interest value on the security deposit. In Khar, a 2-bedroom apartment measuring approximately 1,050 sq.ft. leased for an effective rent of Rs.60,000 per month. In Powai, a 3-bedroom apartment measuring approximately 1,800 sq.ft. leased for an effective rent of Rs.100,000 per month.

Investment / Sale

The attached chart shows capital values by locality. In key transactions, an apartment in Cuffe Parade measuring approximately 1,250 sq.ft. sold for Rs.2,60,00,000. In Napeansea Road, a beautiful apartment in a prime building with a sea-view measuring approximately 1,250 sq.ft. sold for Rs.4,00,00,000. In Prabhadevi, an apartment under-construction with all modern amenities measuring approximately 8,000 sq.ft. sold for Rs.20,00,00,000.

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About Cushman & Wakefield

Cushman & Wakefield is the world’s pre-eminent real estate services firm. Founded in 1917, the firm has 192 offices in 58 countries around the globe, and more than 11,000 talented professionals. The firm delivers integrated solutions by actively advising, implementing and managing on behalf of landlords, tenants, and investors through every stage of the real estate process.  These solutions include helping clients to buy, sell, finance, lease, and manage assets. Cushman & Wakefield also provides valuation advice, strategic planning and research, portfolio analysis, and site selection and space location assistance, among many other advisory services.