Mumbai likely to get biggest pie of Rs 25,000 crore realty bailout package

MUMBAI: Mumbai Metropolitan Region (MMR) is the second largest market in terms of stuck housing projects, and experts believe the maximum resolution through the government’s Rs 25,000-crore lifeline can be achieved in this region.
Potential to attract price realisation and better demand pattern are expected to push revival of several unfinished residential projects in Mumbai Metropolitan Region (MMR), mostly located in central and western suburbs of the city, with the help of the stress fund, industry experts said.

“While NCR (National Capital Region) has 1.76 lakh housing units stuck and Mumbai region has 92,000 units delayed, the chances of seeing a resolution for more number of projects in MMR are higher than the national capital,” said Pankaj Kapoor, managing director at real estate analytics firm Liases Foras Research & Ratings. “Higher realisation potential makes the projects here more viable,” he said.


The government had on Wednesday announced a Rs 25,000-crore alternative investment fund (AIF) to bail out cash-strapped developers with unfinished residential projects, provided they meet certain criteria.

“The fund is for projects where cash flow is positive, and Mumbai is expected to have more of these,” said Satish Magar, president of Confederation of Real Estate Developers Association of India (Credai). “Project sizes here are smaller and the financial situation is also within better control.”

Given the weighted average price of around Rs 13,000 per sq ft in MMR against construction cost of over Rs 2,000 per sq ft, stuck projects in Mumbai market are comparatively more viable, provided the land cost has been taken care of by the existing developer, experts said.


Also, Mumbai being an expensive property market, most realty projects within the city and even in suburbs are smaller in size compared to most other markets, hence the funding required for Mumbai projects’ resolution or revival would be comparatively less, they said.

According to the fine print provided by the government while announcing the AIF, maximum finance for any single project from this fund is Rs 400 crore.