Unitech to redevelop Mumbai slums

Unitech Ltd, India’s second-biggest developer, expects its share of sales from redeveloping Mumbai slums into luxury apartments to triple in three years and boost profit, Managing Director Sanjay Chandra said.

Unitech, based in New Delhi, is developing 100 acres (40 hectares) of land in north Mumbai’s Santacruz area, near the city’s airport, by knocking down shacks typically built with tin, asbestos and plastic sheets, and building apartments in towers serviced by high-speed elevators. Slum dwellers will be resettled in smaller apartments in separate buildings on part of the cleared land.

The world’s second-fastest pace of economic growth is boosting incomes for India’s urban population and spurring demand for houses that cost at least Rs 2.5 million ($54,600) in a Mumbai suburb. About 8 million people live in slums in India’s financial capital and surrounding areas, more than the population of Switzerland.

“Mumbai is a lucrative market and prices tend to go up firmly and demand is usually strong,” said Jigar Shah, head of research at Kim Eng Securities India Pvt in Mumbai. The measures to develop slum areas and build affordable homes “will help lift return on equity and profit.”

Mumbai properties may account for 40 per cent of revenue in three years, up from the current 12 per cent, Chandra said in an interview in Mumbai. The government’s plan to redevelop shanty towns such as the 535-acre Dharavi slum near the new Bandra-Kurla business district has been delayed because of political indecision and disagreements, said Jockin Arputham, founder and president of the National Slum Dwellers Federation.

Latin American model
“It’s not easy to do redevelopment as moving people is a complex task,” said Anshuman Magazine, New Delhi-based managing director of CB Richard Ellis for South Asia. “Not everyone may want to be relocated for economic reasons, not to mention legal and other regulatory issues, and the state of the real estate market.”

Shares of Unitech fell 2.2 per cent to Rs 88.5 in Mumbai trading yesterday.