Inside Mumbai Real Estate: Insights from Sahil Vora’s Conversation with RealEstateWithMayank
Inside Mumbai Real Estate: Key Takeaways from Sahil Vora’s Conversation with RealEstateWithMayank
Table of Contents
Sahil Vora of SILA unravels the truth behind high-rise construction costs, the regulatory red tape of 80-storey buildings, and which areas of the Mumbai building market offer him the best break even in a very candid interview with RealEstateWithMayank.
Cost and construction: 20-storey vs 80-storey
Vora points out that the medium-rise to super high-rise is not only cosmetic but it completely changes the cost structure.
- Steel usage: On average, a 20-storey building requires approximately 4.5-5kg of steel per sq. ft. and an 80 storey tower may require very close to 6-8kg per sq. ft. based on the construction design and safety consideration. This by itself has a high inflation effect on the material cost per square foot.
- Concrete and structural design: The coefficient of concrete and the general structural system of the 80-storey structure is much more complicated, which results in the increased materials, engineering, and construction expenses.
- Time and financing: The high-rise projects are typically funded through construction finance or debt, and since the 80-storey project takes longer to construct, interest and financing liability have to be paid over a longer period of time, and serve to increase the financial strain.
Regulatory challenges for 80-storey towers
Other than engineering, Vora highlights that regulation is one of the key distinguishing factors between a 20-storey and an 80-storey project.
- Fire and life safety norms: The higher the structure, the more stringent fire-safety and evacuation regulations that include sophisticated systems, shelters and approvals.
- Civil aviation clearance: They are very high in the air thus these towers need clearance by the civil aviation authorities so that they do not disrupt the air corridors and safety standards.
- High-Rise Committee approvals: In Mumbai, extremely tall projects undergo an additional level of technical scrutiny and possible uncertainty in timeline, by passing through a special High-Rise Committee.
Investment insights: where Mumbai is headed
The discussion also shifts away to where Vora is most entrepreneurial in the changing environment in Mumbai.
Beyond the old luxury core: Premium real estate is no longer about the traditional addresses such as Altamount Road, Carmichael Road and Malabar Hill. The new micro-markets are also becoming stiff competition in the high-end.
The “six-figure” PSF club: Vora is of the view that in the next few years, a total of 10-15 micro-markets in Mumbai would remain able to fetch prices of over ₹100,000 per sq. ft and this is due to the increase in income as well as the infrastructure support.
Coastal Road as a value driver: Areas in the neighborhood of approximately five minutes of a Coastal Road entry/exit like of Juhu, Versova and such like pockets of a coast or connectivity are likely to be over-appreciated as commute times reduce and connectivity increases.
To the investors and homebuyers, it is simple, follow the infrastructure, particularly the Coastal Road, and pay close attention to the emerging micro-markets that integrate access, lifestyle, and future supply constraints.
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