According to a recent note by brokerage firm Jefferies India, the ongoing implementation of major infrastructure projects in Mumbai is expected to bring significant benefits to key players in the real estate sector.
Companies such as Macrotech Developers, Godrej Properties, Oberoi Realty, Sunteck Realty, and Prestige Estate Projects are among those poised to capitalise on this infrastructure development. The expected impact includes positive changes in pricing dynamics, leading to a more balanced pricing structure, and creating an environment that attracts new economic activities.
Jefferies highlights that Lodha, with its extensive land-bank spanning over 4,000 acres in the extended eastern suburbs of Mumbai, particularly in Palava and Thane, is strategically positioned to leverage the improving infrastructure developments in the city.
Similarly, Oberoi Realty's planned expansion in Thane, featuring a township spanning over 15 million square feet, is expected to yield long-term advantages.
Other developers covered by Jefferies with exposure to Mumbai's real estate market include Godrej Properties, which has a significant portion of its FY23 residential pre-sales and a large land portfolio in the eastern suburbs. Prestige and Sunteck are also prominent developers with a notable presence in Mumbai.
In the realm of real estate investment trusts (REITs), Jefferies notes that Mindspace holds a substantial office portfolio in the Mumbai Metropolitan Region (MMR), accounting for 41 percent of its total office holdings. This positions Mindspace to benefit from the ongoing development and growth in the commercial real estate sector of the MMR.
The four major infrastructure projects valued at over $10 billion, namely the Mumbai Trans Harbour Link, Coastal Road, Mumbai Metro Line-3, and Navi Mumbai Airport, are nearing completion. It is anticipated that these projects will be fully operational between the fourth quarter of 2023 and the fourth quarter of 2024. The imminent completion of these projects signifies significant progress in improving transportation and connectivity in the Mumbai region, providing enhanced travel options and boosting economic development.
Furthermore, there are plans to complete approximately $60 billion worth of large-scale infrastructure projects within the next three to seven years, with a focus on enhancing connectivity within Mumbai. In addition to the aforementioned landmark projects, several other significant developments are underway in the city.
At present, around 113 km of metro rail projects are at various stages of execution, and an additional 158 km are planned, requiring an estimated investment of approximately $16 billion. Additionally, road connectivity projects within MMR valued at around $11 billion are either under execution or in the tendering stage.
Moreover, MMR will play a vital role in nationally significant projects, serving as the origin or endpoint for initiatives such as the new Delhi-Mumbai expressway and the first line of the High-speed rail (bullet train) connecting Ahmedabad with Mumbai. All these projects will further enhance connectivity, improve transportation efficiency, and foster economic growth in the region, solidifying Mumbai's position as a major economic hub in India.
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