Chembur: The Top Residential Investment Location in India


In 2012, a Knight Frank investment advisory report predicted that residential property prices in Chembur would appreciate by 125% until 2017. This prediction not only proved accurate, but shows no signs of abating in the coming years. One interesting new development is the entry of affordable housing projects in the area,that are available at low rates and are expected to yield high returns. What opportunities does this present for potential homeowners?

Recent changes in the regulations governing real estate have proven to be favourable for the average individual, as affordable housing was granted infrastructure status in 2017. This has marked the entry of large affordable housing players into Mumbai’s residential realty space. At the same time, lower interest rates coupled with the citizen-friendly Pradhan Mantri Awaas Yojana (PMAY) has increased the possibilities of homeownership to a greater number of individuals. This has meant that, despite the rapid increase in property prices in and around Chembur, the average family can still buy a home at an affordable rate and take advantage of property boom by selling or leasing the flat.

In 2015, JLL India demonstrated how demand, price point and growth prospects drive the property investment patterns in Mumbai. According to these indicators, JLL predicted, Wadala, Bandra and Chembur were singled out as some of the hottest destinations for real estate investment. Of these locations, Chembur in particular stands out for it close proximity to the airports, South Mumbai and the city’s western suburbs. Additionally, the Eastern Freeway offers fast and trouble-free travel to CST and Nariman Point on one side and Navi Mumbai, CBD Belapur on the other, while the Santacruz-Chembur Link Road (SCLR) connects to commuters to the employment hubs of BKC, Santacruz as well as the international airport. The Chembur-Wadala monorail offers a quick commute to eastern and south eastern suburbs of Mumbai, and the Versova-Ghatkopar metro-rail project has linked the western and central corridor. With reduced travel time to work hubs like Bandra-Kurla Complex, Andheri, Vashi, CST & Nariman Point makes Chembur the most well-connected suburb of Mumbai.

When not commuting into the city centre, Chembur can provide an oasis of calm to counterbalance the stress of modern life as open public spaces such as Gandhi Maidan, Annabhau Sathe Garden, Diamond Garden, Ambedkar Udyan and  Jawahar Grounds bring nature into residents’ everyday lives.

Many reputed real estate developers have recognised the potential of Chembur and are investing in the area at an unprecedented pace. Of these recent developments, Xrbia and Crystal developers project stands out for its commitment to affordable housing. Designed by renowned architect Hafeez contractor their new project Chembur Central promises to combine affordability with luxury. A 1BHK home will cost as low as 42 lacs and will cater to the millennials who crave affordability, convenience and efficiency. For all first-time home buyers, the future looks bright in Chembur.


Millennials want Compact, Convenient Homes

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What does the perfect home look like? While some of us may still fantasize about walk-in closets, expansive living rooms and ample storage, oversized houses are becoming less and less desirable. Well-designed compact spaces are becoming increasingly popular amongst the next generation of homeowners who crave flexibility, convenience and affordability in every aspect of their lives, from the music they listen to the homes they live in.

Millennials, who are entering the home-buying market in larger numbers, are driving down home size. A major driver of this new trend is that, with the advent of innovative technologies, we simply don’t need as much space. The general clutter that covered the walls of our parent’s homes, the shelves of CDs, DVDs, and books have become a thing of the past. We can now access all the same content online via services such as Saavn, Netflix, and Kindle.

Strengthening this shift towards smaller households has been changing living patterns. People are increasingly on the move, choosing to live alone and having their first child later in life, causing the average Indian family to become smaller. In 2001, for example, Indian families with nine members or above formed 11.3 per cent of the total households. But, in 2011, only 6.6 per cent of the households had nine members or more. This narrowing of the family form has already had significant effects on household sizes, with the size of the average house in Mumbai shrinking by 25% over the last five years alone.

The issue of cost is, of course, unavoidable. Millennials earn 20% less than Boomers at the same stage of life and typically have a significantly lower net worth. With house prices skyrocketing in rapidly urbanising centres – it would take 580 years for an individual earning an average Indian income to buy a flat in central Mumbai – the reality is that most of us can simply no longer afford a large home. Choosing to live in a compact home is fast becoming the only option available for first-time buyers craving the convenience of living in the centre of Mumbai.

What do these changing preferences mean for housing? In an era of unprecedented population growth and threats to our environment, the demand for compact housing from the millennial generation simply affirms our need to build smaller. Pioneering the trend in compact houses, Xrbia is able to satisfy this generation’s desire for affordability and convenience, as well as society’s need for greater energy and space efficiency. Xrbia has developed compact homes that are complemented by shared infrastructure, including commercial facilities, open green spaces, gyms and swimming pools to ensure that compact does not mean claustrophobic. Xrbia’s compact housing vision will inject some much needed affordability into India’s real estate market, allowing millennials to lose the connotation of “generation rent”.

Efficiency, convenience and affordability are what is wanted – and needed – for the twenty-first century. Like CDs, DVDs and Books, wasted space too should be confined to the dustbins of history.

‘Chembur Central’ clocks 20,000 registrations in 4 days

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Chembur Central is a 5000 house project situated in one of Mumbai’s most central locations. The project, which is sold exclusively via an ecommerce portal saw an unprecedented rush to their website crossing a threshold of 20,000 registrations many of whom were buyers attracted by prices as low as 42 lacs for a 1 bedroom apartment. Prospective buyers are required to register their interest via a booking portal and pay a registration fee of Rs.100 between April 11th  – 23rd to secure a booking.

Majority of the registrations came from residents of Maharashtra, followed by Delhi, Ahmedabad and Kolkata. Online registrations came from remote cities such as Shiliguri, Jammu , Durgapur amongst others.

Many housing companies are now willingly moving most of their transactions and booking processes to online platforms, in line with India’s increasing internet infrastructure and demonitisation. Consumers tend to prefer online platforms because they are more transparent.

A spokesman from Xrbia confirmed that before they are open for booking by the 24th of this month, it is very likely the registration count may be as high as 100,000.


To Achieve Large Rental Yields in Mumbai, Investors Need to Think Small

2 BHK UNIT - (6)Buying a home in Mumbai would be a dream come true for many of us. Property prices in the “city of dreams” are shockingly high, however, with house prices defying all logic of the supply-demand equilibrium. Realistic home-buyers opportunities for middle and even high-income families are increasingly few and far between in this city of 22 million residents.

At the same time, investors of semi-luxury and luxury apartments find their dormant investments have no takers, and the number of unsold units continues to rise. At what point does the unmet demand from middle-income families meet the value-for-money sought for by those looking for a lucrative investment?

Affordable housing is arguably one of the investors best options available in these uncertain times. Let’s look at these issues from an investor’s perspective. With limited income sources, ever-increasing expenses and high inflation, the middle-income family is financially squeezed, but this does not quell their desire to leave a legacy for the next generation. When considering a property purchase, five basic principles are sought after by this home-buying demographic: Safety, Security, Affordability, Return on Investment and Legacy.

Affordable housing fulfils middle-income families desire for a safe and lucrative investment. The ideal property needed to fulfil these dual objectives, however, must be in a desirable location, close to amenities and be within easy reach of the city-centre, to insure price appreciation and higher future rental yields in the future. Surely this list of requirements is beyond the reach of the average middle-income family?

Fortunately, Xrbia developers, India’s affordable housing leader is working to make this dream a reality. A compact home from Xrbia in a prime city location like Chembur will cost around 42 lacs and, assuming a rental income of 20,000, the rental yield will be 6%. Now this beats the standard rental yield in a city like Mumbai which is in the range of 2-3%. Add to this the capital appreciation and in 5 years, this represents a very lucrative investment.

Let’s dig a bit deeper in the above scenario. Let’s assume the middle-income family has savings of 20 lacs and takes a home loan at 8.6%, which means an EMI of around 18,000. Add to this another 7,000 per month for standard regular expenses such as maintenance and tax and any other expenses with regards to the flat. Now this adds up to 25,000 as cash outflow. Now let’s look at the income side. Reflecting the desirable location, proximity to amenities and connections to the city centre, we can assume a monthly rental income of 20,000 and an interest income of 4% on the refundable deposit of say 2,00,000, which is 8,000. This itself gives you a leverage of 3,000 (28,000 income and 25,000 expense). Now, if you assume standard appreciation of the property of 10% per year,  the return on investment is much beyond your imagination and far better than any other investment option. Indeed, it is a dream come true for any investor.

Crystal Group & Xrbia Developers Announce Mumbai City-Centre Housing Project ‘Chembur Central’

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Mumbai developer ‘Crystal Group’ along with affordable housing developer ‘Xrbia Developers’ announced the launch of their joint venture, city-centre project “Chembur Central” at a press conference held on 6th April 2017 at the Mumbai Press Club. The first phase of the project is planned to be 2000 houses at 700,000 sq.ft. out of an ultimate 6000 houses and 2.5 million sq.ft.

The press release issued stated that the project is developed by Aryamaan Developers Pvt. Ltd. and will be developed in a span of 40 months. The apartments are priced at 40 lacs for 1BHKs and 80 lacs for 2BHKs. The 1BHKs have a carpet area ranging from 180 to 230 sq.ft. and 2BHKs have 305 sq.ft. carpet area.

The site of Chembur Central is its main attraction. Located ten minutes from BKC, fifteen minutes from Navi Mumbai and twenty minutes from both CST and the International airport and fifteen minutes from popular shopping malls, Phoenix Market City Mall and R City Mall, makes the development ideal for those who require convenient central access. Since it will be situated just one minute from Metro 4, one of the 7 new metro stations that was announced by the Maharashtra government, the project location is going to be in demand in the upcoming years.

Chembur Central is conceptualised and master planned by iconic architect Hafeez Contractor. It boasts of state-of-the-art amenities and will be home to a meandering swimming pool. Other major highlights are a multi-level Club house, squash court, 600 metre walking track, shopping, spa and amphitheatre among others.

The project is targeted to young professionals and millennials who value convenience and affordability. So to satisfy their needs and requirements, the project is creating compact homes designed exclusively for them, so that they have accessibility, affordability and convenience.

Crystal group have a reputation for delivering high quality projects within timelines and Xrbia Developers have always been able to satisfy society’s need for greater space efficiency. So with this strategic partnership, both real estate companies are hoping to pioneer the trend of compact housing in city-centres.

In the press release, Crystal group’s chairman, Mr Mukesh Doshi stated that Chembur Central is one of the few centre city projects that is at an ideal location for its connectivity to all the major infrastructural areas of Mumbai and they hope to make this prime property available to home seekers. Known for their timely deliveries and quality, they will stand for it in whatever they do. And Xrbia Developers’ chairman, Mr Rahul Nahar stated that they are extremely pleased to bring in compact housing to Mumbai and are confident that it will be a turning point in the real estate sector.

Chembur Central’s launch is on 11th April 2017. It is one of the very first centrally located project that offers luxury and affordability both at the same time.

Financial Incentives Enhances Demand for Affordable Housing in Mumbai

Mumbai being India’s most expensive real estate market, has long encountered a dearth of affordable homes. Market trends including population growth, urbanization and the reluctance of real estate developers to cater to this target sector have been the long-term drivers of this trend. Now, with incentives from both the public and private sector increasing the affordability of homeownership, demand from this sector of the market is set to increase by a further 25% coming exclusively from Mumbai Metro Region.

A significant driver of this increased demand is the government’s Pradhan Mantri Awas Yojana (PMAY) scheme, which provides a credit linked subsidy of Rs. 2.43 lacs to home buyers purchasing residences below 60 sq. meters. This scheme has significantly reduced the costs of buying a house and expanded the possibilities of homeownership to a greater number of individuals and families.

The impact of this policy is set to be compounded by the recent slashing of interest rates by banks. Many PSU and Private sector banks have reduced benchmark lending rates from 9.1% to 8.6% in response to the recent cash inflow from demonetization. In conjunction with favorable demographics and rising disposable incomes, a rise in affordable housing demand is predicted to rise steeply.

The tenacious challenge now is to create enough stock to supply this increased demand in affordable housing. As India’s current affordable housing leader, Xrbia has long recognized the potential demand in this sector. Since then, they have heightened their focus on affordable housing sector. Having already sold 6,776 houses in the last 3 months, they are now marching up the scale of their operations with a focus on the Mumbai region. In the next quarter, 3 new projects are set to be launched in Ghatkopar, Kandivli and Thane, the latter of which will be an extensive project covering 60 acres of land.

For a market segment that has been neglected for a very long time, this comes as a welcome news. The Pradhan Mantri Awas Yojana (PMAY) scheme represents a tangible commitment from the government to its mission in achieving “Housing for All by 2020”, and is also sending positive signals to the real estate market that the demand for affordable housing is simply too great to ignore.

Demand has gone through the roof!

Pradhan Mantri Awas Yojana creates unusual demand in the affordable housing segment

  • The subsidy of INR 2.20 lacs for a house costing 7 lacs is equivalent to 25% discount .
  • Home loans have seen a sharp surge, as benchmark lending rates have come down significantly.
  • Xrbia’s innovative” No-income-document-financing-scheme” has received an overwhelming response.

If there is one thing that every single Mumbaikar will agree on, is the housing crisis in Mumbai. There are too few homes, usually costing a lot, often in the wrong places, and often of poor quality. The crisis damages lives, blights employment prospects, reduces mobility and reduces productivity.

The Pradhan MantriAwas Yojana, which offers a subsidy of 2.2 lacs per house, and meant to boost the affordable housing sector has its own budgetary limitations. The INR 5,400 crore allocated in the budget of 2016-17 already appears to be falling short with more than 1.6 lakh houses so far being offered under the scheme. The demand for subsidy in affordable housing, is far greater than the budget allotted.

The INR 2.2 lakh given as subsidy for a typical 250 sq ft house , is equivalent to a 20% discount on the sale price of 7 lacs. This scheme is enabling such products to sell like hot cakes.

This staggering response to the subsidy is leading to inventory shortage. The shortage is further caused as the space has only three organized players namely Xrbia Developers, Tata Value Housing and VBHC that operate on scale. Xrbia Developers, one of the leading player in the affordable housing segment has registered a jump to monthly sales of 2000 units from a normal average of 500 units per month.

The pressure on inventory is further triggered with housing loans becoming cheaper. This is seen as the best time to apply for loans, as half a dozen PSU and Private sector banks have reduced benchmark lending rates after demonetization. Xrbia Developers have further benefitted by an innovative financing scheme that was introduced last month. The ‘No income proof scheme’ is largely appealingto people belonging to informal sector.

The squeeze in inventory, can also be credited to the surge in manufacturing and IT sector in cities like Mumbai and Pune. The highest demand is in areas which are on the suburban transport networks sometimes as far as Dhanu in the west, Shahapur in the Central and Karjat in the Eastern zones of Mumbai. The migrants pouring into the city has put pressure on house prices and also accelerated demand in development of right infrastructure. There are additional pressures on the reasonable costs of housing, transportation services, health provision, schools and social security benefits. Thus making the case for affordable housing that is self-sufficient.

The gap between the demand for new homes and the supply coming onto the market, which we’ve dubbed “the new housing crisis,” has caused prices to soar and priced out many first-time homebuyers.

Technology: The Driving Force In Housing Innovation

“You can have any colour you want, so long as it’s black”. Henry Ford’s playful remark regarding the single colour offered to customers of the T Ford in 1909 was not a question of personal taste, but necessity. The T Ford was the world’s first car to be manufactured on a moving assembly line, leading to an eightfold increase in productivity and ensuring a new T-Ford came of the line every 15 minutes. This revolution in production is now heralded as the innovation which opened up car ownership to the masses – an assembly line worker suddenly could buy a Model T with four months’ pay – however, there was one catch. The paint couldn’t dry fast enough. Only fast-dry black paint could keep up with full-speed assembly, and thus the iconic black T-Ford was born.

The car industry has always pioneered the use of emerging technologies. From standardised parts which have made cars easier to fix, to energy efficient designs which are reducing their harmful impact on the environment, technological innovation in the car industry is relentless. While the pace of change in the automobile industry has meant cars are unrecognisable from their predecessors in the early 20th century, innovations in housing have typically progressed at a frustratingly glacial pace. The housing sector needs to take lessons from the car industry if the the global housing crisis is to be stopped in its tracks.

Fortunately, there are signs that the housing sector is now catching up. Starting with construction technology, the benefits of standardisation and pre-assembly methods are reflecting the efficiency revolution produced by Ford’s flow production line. At Xrbia, steel-framing dry technology is being employed to build three times faster. 90 per cent of the buildings are built offsite, and then simply assembled onsite, guaranteeing quality and reducing waste. Multiple-level buildings can now be built within 90 days and use approximately 20 per cent less material and space than traditional construction techniques. With rapid urbanisation placing ever greater strain on space in city centres, construction techniques which save time and space will become increasingly important in the coming years.

In the same way that the automobile industry has made great strides to reduce the amount of energy needed to power the vehicles it creates, the housing sector must also ask how much energy is needed to power a house.

Sustainability concerns should not halt with construction, and a holistic approach to house design that takes into account how housing projects interact with the wider environment in which they are situated must become an integral part of the design process. Xrbia’s renewable energy system reflects our commitment to building sustainable and functionable communities, not just answering the need to build more homes.

Combining the latest technological advances across electricity, water and waste management, Xrbia has generated a renewable energy system which ensures that the energy that powers each township is generated and managed using sustainable resources. In doing so, Xrbia will expand access to clean water and sanitation to those in need of decent affordable accommodation. This holistic approach is the key to creating houses that are sustainable in the long-term.

Finally, while we are being told that self-driving cars will soon be commonplace across our roads, the internet of things revolution is already here in housing and promises to revolutionise the way we live, as well as travel. Indeed, this may be one area of technology in which the housing sector is leading the way. IoT technology refers to the increasing interconnectivity between our online and physical worlds – think apps that can turn on your heating remotely and fridges that know when you need to buy milk. While “smart” technology has conventionally been associated with expensive products for an exclusive customer base,

Xrbia is incorporating IoT technology into its developments to cut costs for residents. Each room at Xrbia will be fitted with a microbot, which transmits information about residents’ utility usage to an online platform. Guests are then able to check their utility usage and pay for maintenance bills via the Xrbia Smart City app. With IoT technology rapidly expanding in the realty market, Xrbia hopes to lead the industry into this new digital era.

They say that necessity is the mother of invention, and the demand for housing in the 21st century is unprecedented. If current trends in housing construction continue, one-third of urban humanity will occupy crowded, inadequate and unsafe housing by 2025. In the same way that technology has driven the challenges faced by the car industry, including those related to construction, costs, safety and the environment, Xrbia believes that technology will be the driver of change desperately needed in housing.

Indian expats look at London as a hot realty destination

Many Indian investors are exploring opportunities to invest in the United Kingdom, especially in London, primarily due to the devaluation of the Pound and the fall in property prices post Britain’s exit(BREXIT) from the European Union.

During a speech in December 2012, Theresa May (the present British Prime Minister) claimed that more than a third of all new housing demand in Britain was caused by immigration. “And there is evidence that without the demand caused by mass immigration, house prices could be 10% lower over a 20-year period.”

The housing crisis in London has emerged to a level that the 2011 census revealed that “the indigenous had become a minority in their own capital.” London (with just 12% of the national population) was associated with 40% of the inflows, 30% of the outflows, and absorbed 67% of the net balance of the overseas immigration.

Additional demand from migrants and foreign investors has put pressure on house prices and also accelerated the demand for development of the right infrastructure. Additional pressures exist on the costs of housing, transportation services, health provisions, schools and social security benefits to be reasonable. Thus the importance of affordable housing that is self-sufficient.

The only savior to London’s housing crisis can be new self-sufficient cities far from the existing cities, where the cost of the land is not a significant fraction of the total developmental costs itself. However, mostly, these lands should be accessible by major railways and highways. These international markets being easily accessible to major transportation networks are appealing to developers.

Usually in Mumbai, in the projects where the cost is viable, the land is far away from any source of infrastructure. This is seen across cities in India. This infrastructure deficit is a key challenge, as well as the costs of getting approvals. However in the case of London, the infrastructure is comparatively better and hence it offers a better opportunity for the emergence of the affordable housing segment.

Also, the affordable housing business has to be looked from a cash-flow perspective than as a land bank or an asset ownership business. This will impact how the business is valued, and in turn reflect in valuations across the industry. The risk factor is that the costs associated with the scalability of the business cannot be borne by many developers. Expanding the business geographically, understanding the country-specific situations, buying land and then creating a brand in different locations is very challenging, which is not a piece of cake for all developers.

The developer should have the required experience, the credentials as well as an attitude that affordable housing, apart from being a scalable business is also a social requirement. The developer has to ensure that his organization is extremely transparent, as the market rewards less complicated and highly transparent companies, with earnings and cash flows.

The city of London with a huge Indian population offers the required base to an Indian developer. HNIs perceive Indian developers with projects abroad to be sophisticated with global know-how, which helps the developer with the required brand credibility.

The expertise of Indian developers in the affordable housing segment, added to the fact that London is an international city, brings an added advantage to the table.

We must think bigger to solve housing poverty

The UK’s already started to think beyond constructing tower blocks to alleviate the urban housing crisis. Garden villages are to be built across England, offering 48,000 new homes.

These ready-made communities will have their own identities and facilities – from village greens and halls to pubs, bike trails and shops.

But there are already concerns over levels of affordable housing within these garden villages. In Cornwall those campaigning against an eco town at West Carclaze say they were originally promised 40% to 50% affordable housing, a figure that has since plummeted to less than a third.

These schemes are failing some before they’ve even been built.

But this doesn’t have to be the case. I firmly believe the UK is languishing from an old fashioned building philosophy and legacy processes that are keeping construction costs high. Naturally, these costs are passed on to homeowners and tenants.

I know from experience it’s possible to build a four-storey apartment block in 90 days – around three times faster than current industry timeframes – and deliver huge savings on materials and labour.

This can be done by using prefab modular components made of aluminium or steel as moulds for casting structural components of the building from Reinforced Cement Concrete.

Compared to conventional formwork practices in which timber is used to support until it attains the design strength, using aluminium/steel formwork results in achieving a superior casting quality in terms of strength and finishes in a dramatically shorter time.

This technique can be used to make beams, columns, walls, floors and ceilings. After the concrete within the forms attains the required strength, the series of panels are dismantled revealing a highly uniform, monolithic concrete structure with accurate tolerances and plumb levels.

No further plastering is required on these surfaces due to them being highly finished with metal panels in Light Gauge Steel, which provides excellent sound, thermal and fire insulation.

It results in building, construction and eco-friendly housing solutions of requisite quality and price, within the shortest of time periods known in the industry.

Structures built using this process can be erected either by prefabrication of the component units at a factory with the final assembly done on site, or prefabricated from material inputs at site with subsequent assembly by men on the ground with minimal skills.

In either case, this method of construction and erection, when compared to conventional hollow concrete blocks, or bricks and mortar, results in a significant decrease in the overall time taken for construction, and so a reduction overall labour costs

Though the time advantage varies, in some cases, this method of construction has been completed within 30-40% of the time for an equivalent structure using conventional methods. This is largely due to the reduction in labour on tasks like plastering and curing.

The technique has been validated in customised construction projects. Worldwide, we’ve completed more than 2,000 residential units and I believe it’s possible to deliver affordable London homes for around £80,000. But it’s a construction technique that’s being massively under-utilised.

The UK’s ambition to build standalone villages and towns is a worthy one, but relying on archaic construction methods won’t offer affordability. There needs to be a sea change in the industry to deliver homes at the right price, and plenty of them.