Old money cashing out of SoBo
South Mumbai is witnessing a covert exodus.mumbai Updated: Oct 24, 2011 00:49 IST
South Mumbai is witnessing a covert exodus.
Residents and business houses, who have been in the area for more than 40 years are selling their properties to the nouveau riche — people with newly acquired money.
This group includes people who have made money in the last 10-15 years, such as high networth individuals (HNIs), private equity firms and real estate developers.
“New money is replacing the old in south Mumbai in most of the deals in the commercial and residential segments lately,” said Aniruddh Wahal, director, Occupational and Development markets.
In one of the major deals, Runwal Group, a real estate development firm from the eastern suburbs, bought the Kapadia family’s Nepean Sea Road bungalow, built in the late 1940s, for Rs350 crore.
Experts, however, say the trend has been noticed in smaller deals as well.
Recently, the owner of a two-bedroom, 1,200 sqft apartment at Warden Road, who inherited the flat from his parents, sold it for Rs5 crore to an Andheri resident who works at an international bank.
In another example, a four-bedroom apartment at Napean Sea Road was put up for sale recently.
“The owner expected around Rs75 crore, which is about Rs62,500 per sqft for the 12,000 sqft property. Three businessmen presently living in central or north Mumbai showed an interest in the property,” a broker from south Mumbai said, on condition of anonymity.
“Such buyers, especially in the residential segment, aspire to buy an apartment in south Mumbai because it makes a statement,” said Wahal.
Experts say those selling their flats, are investing in other properties in central, north and the outskirts of Mumbai. “In the newer areas you have amenities that are unimaginable in south Mumbai. So many people prefer to move,” said Sunil Bajaj, an independent real estate consultant.
“In the case of residential properties, sellers may not enjoy the same economic situation they used to when they bought the apartment. So they sell the property, buy another one in central or north Mumbai and still corner a decent amount,” said another real estate broker in South Mumbai, on condition of anonymity.
However, the new money entering south Mumbai is not just limited to residential property.
Hindustan Unilever has put its Churchgate property, which was its headquarters for 46 years, on the block and is expected to get around Rs500 crore. It has since then moved its offices to Andheri.
“There are some companies, especially ones formed in last 20 years, that are keen on buying the property,” said a person close to the devel-opment.
The US consulate, after putting both its properties in south Mumbai — Lincoln House in Breach Candy and Washington House at Altamount Road— on the block, shifted to Bandra-Kurla Complex.
The two properties, which could be sold for anywhere between Rs1,200 to Rs1,500 crore, according to industry estimates, have seen interest from HNIs, non-resident Indians and real estate developers—all of whom have made their money in the last fifteen years.
It is expected that within two weeks, the investment memorandum would be forwarded to all the potential buyers, and the deal is expected to go through within three months.
Industry experts say that even though there is pressure on prices to go down because of low volumes across the city, south Mumbai properties remain insulated.
Experts say that in south Mumbai, even if the owners sell the property at a discount, which normally does not happen, they end up getting considerable returns on the original investment.