Mumbai redevelopment comes with ‘plenty of risks’, but everybody is jumping on the bandwagon because it looks ‘very attractive’, with redevelopment opportunities worth nearly ₹1.30 lakh crore expected to emerge by 2030, said Boman Irani, CMD of Rustomjee Group also known as Keystone Realtors.
“There are plenty of risks when it comes to redevelopment, and people do not know what it is all about, but everybody is getting on this gravy train only because it looks very, very attractive,” he said, adding that redevelopment opportunities worth nearly ₹1.30 lakh crore are expected to emerge by 2030.
According to Irani, redevelopment has plenty of risks, but everybody is getting on this gravy train because it looks attractive.
“People don’t know what redevelopment is all about, but everybody is getting on this gravy train only because it looks very, very attractive. Redevelopment opportunities worth ₹130,000 crore by 2030. With a lot of redevelopments that we are taking nowadays, we are moving towards the larger ones because they allow us to be able to engage our ability and creativity to a much greater extent,” Irani said during its Q4FY26 earnings call on May 12.
However, Irani said when it comes to redevelopment-related risks in the context of Rustomjee Group, it is very limited.
“We have been doing redevelopment since 2000, and with a 25-year track record of placing more than 2,500 families in their new homes, I think we have established a proper Standard Operating Procedure (SOP) for the entire redevelopment process,” Irani said.
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According to Irani, the company’s market share in the Mumbai Metropolitan Region (MMR) has increased from 1 per cent to 2 per cent, and it is aiming for 5 per cent in the future.
“The scale multiplier will be achieved by the large cluster developments, newer types of developments that we do. Velocity will come from the added cities or towns that will increase our foothold or presence, and stability will come from the wide range of commercial portfolios we are now beginning to assess and start. The path to ₹10,000 crores begins, and the first step is this year will be a presale of ₹5,000 crores,” Irani said during the call.
Housing demand amid the US-Iran war
Responding to a question on residential housing demand amid the ongoing Middle East crisis, Irani said the real estate sector is cyclical. He pointed out that there has been no slowdown in the premium and luxury housing segments, while homebuyer interest and site visits continue to remain strong. However, he noted that purchasing decisions may now take slightly longer.
“I can only rely on what has happened so far. And going forward, we are all discovering. So our last quarter, like we mentioned, was ₹1,346 crores, the highest presales that we have done in a quarter. The last quarter is always the best, and then the first quarter always peters off, and it generally becomes a lot slower,” he said.
However, Irani said there is currently a greater need to push housing sales in the ₹1 crore to ₹3 crore segment. “Having said that, we have not seen any slowdown in the premium and luxury. We are also seeing a good enough interest from homebuyers who visit the site. Obviously, the buying decisions could take a little longer,” Irani said.
Also Read: Top 6 locations in Mumbai’s real estate market that are witnessing redevelopment activity
Construction costs increased by 8% to 13% for certain items
Against the backdrop of the US-Iran war, Irani said construction costs are rising due to disruptions in material supplies and dependence on internationally sourced inputs.
“If the dollar continues to spike, then that will be a further increase in the cost. Fortunately, for us at Rustomjee, our strategy of selling about 35% of the stock in the first year and then about 40% of the stock as the project continues, allows a good amount of shock absorption with regards to the increase in costs.”
According to Irani, the cost increase in the region is about 8% to 13%. “I do not mean overall 8% to 13%, but in certain items, which leads to an overall cost increase of about 5%. We are well insulated because, as you can see from our unsold already launched stock, we will continue to keep selling, and this will allow us to absorb whatever increase in costs takes place,” Irani said.
