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With not much undeveloped land left in Mumbai for fresh developments, the city’s real estate growth will largely be propelled by the success of its many slum redevelopment schemes, according to a recent study. Despite high entry barriers, 52% of the upcoming realty projects in Mumbai, spread over 8,600 acres, are slum redevelopment schemes, brokerage Anand Rathi Research said in a 4 October report. Another 18% will be factory and mill land projects, 4% will be redevelopment of old buildings, and 3%, urban slum renewal schemes. After a near two-year economic lull, slum schemes, considered the most profitable in the real estate business, have made a comeback with nearly 80 new projects sanctioned in Mumbai this year, said S.S. Zhende, chief executive, Slum Rehabilitation Authority (SRA), the nodal agency in Mumbai. This would not only rehabilitate families living in almost 300,000 hutments, but also open up substantial space for residential and commercial development. According to the Anand Rathi report, Mumbai, India’s densest city with 27,000 people per sq. km, would need an additional 324 million sq. ft of residential developments by 2021. But of the 468 sq. km in Mumbai, only 90 sq. km is actual developable land and the rest are non-revenue generating areas such as forest land, according to a survey by Pankaj Kapoor, chief executive of Mumbai-based real estate research firm Liases Foras and architect Hafeez Contractor. “Huge amount of space can be freed through slum redevelopment but that needs to be incentivised by giving developers more construction rights,” said Kapoor. Dedensification of the city would be possible only if the floor space index (FSI), or construction rights, is raised enough to lower Mumbai’s high land costs, he said. The state government has selectively increased FSI from 1.33 to 4, but land prices in Mumbai continue to break highs. Indiabulls Real Estate Ltd, for instance, bought an 8.3-acre defunct mill land in central Mumbai for Rs.1,505 crore in August. Land comes relatively cheap for slum redevelopment projects. If the land cost comprises 10-25% of a slum scheme, for a mill redevelopment project, it could be as high as 60-80% of the project cost. Mumbai’s slum redevelopment scheme also requires de-politicising, said Kapoor. The proposed redevelopment of Mumbai’s 535-acre Dharavi, India’s largest slum pocket, is stuck in political and financial uncertainties as the state government is still deciding on a formula to ensure smooth implementation of the project. Top developers such as Unitech Ltd, Housing Development and Infrastructure Ltd (HDIL) and Ackruti City Ltd are part of this slum redevelopment bonanza. Unitech, a Gurgaon-based developer, entered the Mumbai property market to tap this space and is developing the 140-acre Golibar Maidan project in Santacruz with a local partner. HDIL has undertaken one of the largest slum projects for Mumbai International Airport Pvt. Ltd, which includes almost 85,000 slum tenants across 270 acres. Almost 35% of Ackruti City’s project portfolio comes from slum redevelopment in Mumbai. It is redeveloping a giant 108-acre slum parcel in the heart of Mumbai, in Sion, which will be used for residential and commercial use. “Entire Mumbai needs to be rebuilt again and redeveloping slums is the major solution,” said Vimal Shah, managing director, Ackruti City. “But this is a particularly specialized area of development and not every developer has what it requires for such projects”. Mumbai’s growth, though, may be slowed by an impending correction, after property prices touched peak levels this year, the Anand Rathi report said. Analysts expect a correction of 10-15% in property costs in Mumbai this year and developers are waiting to see what happens.