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Marriott and the developer are getting around Mumbai’s zoning restrictions on building height by placing the new Ritz-Carlton into a shanty town location that’s being revamped with luxury homes.
“This will be India’s One Hyde Park; they will be the most-expensive apartments in the country,” Oberoi Realty’s billionaire Chairman Vikas Oberoi said in an interview in Mumbai, referring to the U.K.’s most-expensive housing complex in London. The penthouses in the condominium project will be the “most expensive in India,” he said.
Oberoi Realty, India’s second-biggest developer by market value, and Sahana Group, a Mumbai-based firm that specializes in redevelopment, is developing the site in South Mumbai’s Worli area, Oberoi said. The 238-room Ritz-Carlton, the hotel brand owned by the Marriott, will operate in one of the two towers in the project.
Constrained by a more than four-decade-old law limiting height in built-up areas of India’s financial capital, developers are constructing luxury towers in shanty towns and re-housing the slum-dwellers in new flats. Home prices in Mumbai, India’s most expensive real estate market, rose to a record last quarter, according to Liases Foras Real Estate Rating & Research Pvt.
When the Ritz-Carlton opens in Mumbai in 2017, it will be the second in the country after the one that opened in the south Indian city of Bengaluru last year, according to the hotel’s website.
Oberoi is trying to replicate similar projects in London where residential property prices are soaring. A penthouse in London’s One Hyde Park luxury apartment complex valued at as much as 175 million pounds ($298 million) was sold by Christian Candy’s CPC Group Ltd., CPC said last month. A sale at that price would value the property at more than 10,000 pounds per square foot, a U.K. record, Oliver Hooper, director of broker Huntly Hooper Ltd. said.
Prices in Mumbai increased 6.6 percent to 12,747.83 rupees ($212) a square foot in the three months to March 31, according to Liases Foras.
The second tower of about 67-stories will have luxury apartments starting at 7,500 square feet (697 square meters), and will cost a minimum of 380 million rupees, Oberoi said. Sales are expected to begin in September, he said.
Demand for such homes may be slow in Mumbai, Pankaj Kapoor, founder of Liases Foras, said in an interview yesterday. More than half of Mumbai’s over 18 million residents live in slums, according to Sahana Group Chairman Sudhakar Shetty. That’s higher than the population of Switzerland, according to data compiled by Bloomberg.
Demand for high-end housing priced above 50 million rupees remains low and inventory of unsold luxury housing stands at over 100 months, Kapoor said, adding that a “healthy market” normally maintains about eight months of inventory.
Under the partnership, Ritz-Carlton will also manage the apartments for homebuyers and offer them services including in- residence spa treatments, in-house dining and catering and concierge facilities, according to Oberoi Realty.
Newly elected Indian Prime Minister Narendra Modi has renewed optimism that he will help revive Asia’s third-largest economy and its real estate industry after his landslide victory in May, Oberoi said.
“We are lucky to have a prime minister like Mr. Modi, who has clarity on how he wants to take the country forward,” Oberoi said. “All we need in real estate is for him to simplify rules and allow us to work.”
Vikas Oberoi’s 75 percent stake in Oberoi Realty is worth more than $1 billion as of June 19, according to data compiled by Bloomberg.
–With assistance from Netty Ismail in Singapore.
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