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K Raheja Corp has recently entered into an agreement to jointly develop a prime 2.5-acre land parcel located in the prestigious Worli area of Mumbai. This partnership aims to transform the land into an upscale luxury residential project, projecting a substantial revenue potential exceeding INR 2,000 crore.
Under the terms of the agreement, the revenue-sharing arrangement has been finalised between K Raheja Corp's residential platform and the landowner. K Raheja Corp is set to receive 57% of the revenue, with the remaining 43% allocated to the landlord. The responsibilities of planning, design, approvals, execution, branding, and sales efforts lie squarely on the shoulders of K Raheja Corp, as outlined in the agreement. Moreover, there is a strict timeline for the completion of the project within five years.
The overall development is estimated to yield approximately 3 lakh sq ft of carpet area, marking a significant addition to Mumbai's real estate landscape. The formal registration of the joint development agreement occurred recently, underscoring the commitment of both parties to this venture.
Presently, the land parcel accommodates various establishments, including an office building occupying over 40,000 sq ft of leased space. Additionally, there are commercial outlets dispersed throughout the property, alongside some vacant areas. Notably, a portion of the land is freehold, while another segment is leasehold, necessitating approval from the Maharashtra Housing & Area Development Authority (MHADA) for development.
Over the last two years, the luxury housing market across India's top eight cities has witnessed a surge in demand and sales activity. A notable highlight is the exponential growth in the sales value of luxury homes priced at INR 50 crore and above, as revealed by a comprehensive analysis by JLL India. This upward trajectory saw the sales value soar to INR 4,319 crore in 2023, representing a 1.5 times increase compared to the previous year's value of INR 2,859 crore.
Along with the surge in sales value is an increase in transaction volume, with 45 luxury homes sold in 2023, up from 29 in the preceding year. The distribution of these transactions reveals that 58% comprised apartments, while the remaining 42% constituted bungalows. Mumbai, as the nation's financial capital, emerged as the epicentre of this booming luxury housing trend, particularly in affluent locales like South Mumbai and Worli-Prabhadevi.
Realty developers are capitalising on this trend by introducing innovative designs, world-class amenities, and bespoke services tailored to the discerning preferences of affluent homebuyers. This strategic approach aligns with the evolving tastes and expectations of the target demographic, ensuring that luxury properties remain highly sought-after assets in Mumbai's dynamic real estate market.
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