WHILE the Maharashtra government continues to dither on scrapping the antiquated Urban Land Ceiling Act, property prices in Mumbai continue to climb. The Central government has been urging the state government to scrap the law - most state governments in India have removed the regressive law from their statute books years ago - if it wants to get funding under the Jawaharlal Nehru National Urban Renewal Mission. However, several vested interests are opposed to the move, and the government has still not picked up the courage to discard it. Industry analysts predict that by scrapping the act, the government will ensure that hundreds of acres of valuable land will enter the market, easing the pressure on supplies, and possibly leading to lower prices. Mumbai, which is basically an island, has been facing an acute shortage of land for several years. The state government initiated two major moves that have ensured the availability of a lot of land for development in recent years. One was the move to develop the Bandra-Kurla complex (BKC) as an alternative to Nariman Point, the commercial hub of the city. For years the BKC development moved at a sluggish pace, but the last few years have seen it take off. Several international and domestic financial service sector players have relocated their offices to BKC, and property prices there have soared, almost matching Nariman Point. Interestingly, prices in Nariman Point have not collapsed, and even now office units are being sold at record prices. The other major development that has opened up a new region in the Mumbai metropolitan region is Navi Mumbai, the satellite city across the harbour. Again, the pace of development in Navi Mumbai has picked up pace now, and land is being auctioned at record prices in the counter-magnet to Mumbai.

The Maharashtra government is pushing for the construction of an international airport near Panvel, which would further trigger development activities in the twin city. Likewise, the development of sprawling special economic zones — including an ambitious one by Reliance Industries — will boost property prices in Navi Mumbai. The state government is now extending the Mumbai-Pune expressway - which currently starts only near Panvel - to Sion, the heart of the city. Parallel service roads, flyovers and foot overbridges for pedestrians are being planned, which would bring Mumbai closer to Navi Mumbai. There are plans to construct a parallel approach road to the satellite city — at present there is the Vashi bridge and the Mulund-Airoli bridge, besides the railway bridge across the creek — from Sewri to Nhava-Sheva. By the time the airport project takes off, all these projects would hopefully have been implemented. The other major development in Mumbai that has caught the fancy of developers and also end-users (including retail and corporate buyers and retail units) is the opening up of the city’s textile district. About 600 acres of prime property in central Mumbai, occupied by textile mills that have gone bankrupt, is likely to change the face of this once down-market part of the city. Already, office blocks, luxury hotels, shopping malls and residential towers have started coming up in the former mill lands. The next few years will see the construction of several high-rise buildings, from Mahalakshmi down to Mahim.

The state government is also pushing for the redevelopment of Asia’s largest slum, Dharavi, near Mahim. Several other infrastructure projects have also been taken up on hand by various government agencies, though most of these are moving at a snail’s pace. Once these are executed, property prices in their neighbourhood would shoot further. The Mumbai Metro, which envisages establishing mass rapid transit links between Versova and Ghatkopar, Bandra and Mankhurd, and other key points, will transform a vast swathe of the city’s suburban landscape. The West Island freeway, which has been caught up in controversies, is moving at a slow pace, but once it is ready, it will help ease congestion on many arterial blocks between the suburbs and the city. The freeway is ultimately expected to be linked to Nariman Point. Other major east-west roads — the Santa Cruz - Chembur link road, and the Jogeshwari-Vikhroli link road have also been dragging on for years. But once they become operational, property prices in several localities and suburbs are expected to surge. Mumbai, despite the over-congestion, continues to attract a lot of investments from international players in the financial, telecommunications, IT, retail and other sectors. Demand for properties across all segments - residential, commercial, retail - is likely to continue for a few years to meet the growing demand.