Redevelopment To Drive Mumbai’s Housing Growth, Transform Its Skyline Over The Next Two Decades 

Mumbai’s real estate landscape has always been defined by its soaring demand. Over the years, as the city saturated, the scope for fresh development significantly reduced. Today, redevelopment has emerged as the main driver of new housing supply in Mumbai, especially since available greenfield land is nearly used up. This trend will likely shape the city's real estate market for the next two decades. It will change the skyline as old buildings go for redevelopment.

Why Redevelopment Is The Only Way Forward 

Mumbai’s housing market depends a lot on redevelopment, which makes it different from many other cities. 

Says Saurabh Garg, Co-founder & CBO, NoBroker: “There are nearly 10,000 old buildings that need renewal. Given the scarcity of vacant land, developers from all grades are aggressively pursuing redevelopment opportunities to secure a foothold in Mumbai’s high-demand market.”

Government policies and legal provisions have further facilitated this trend. The Maharashtra Apartment Ownership Act (MAOA) allows for redevelopment if at least 51 per cent of a society’s members approve the proposal. This has enabled numerous old society buildings to initiate redevelopment agreements with real estate firms, paving the way for modern, well-planned housing clusters that cater to contemporary urban living standards.

Major Developers Enter The Redevelopment Market

Seeing the opportunity, well-known real estate developers have started large-scale redevelopment projects: 

• Adani Group is leading two significant initiatives: the 142-acre Motilal Nagar redevelopment in Goregaon (West), which involves around 3,700 residents under the construction and development (C&D) model, and the Dharavi slum redevelopment, the largest in the country, through its special purpose vehicle (SPV), Navbharat Mega Developers. This project covers over 600 acres. 

• Rustomjee Group has announced three major redevelopment projects in Mumbai, worth more than Rs 7,700 crore. 

• Kolte-Patil has signed redevelopment agreements in Mulund (West) and Vashi, offering 730,000 sq ft of saleable area and a revenue potential of Rs 1,200 crore. 

• Arkade Developers has revealed eight redevelopment projects across the suburbs, valued at over Rs 5,000 crore. 

• Oberoi Realty announced in July 2024 that it obtained a redevelopment project at Carter Road, Bandra (West), featuring a 2,576 sq. m. land parcel. 

• Puravankara announced in September 2024 that it secured redevelopment rights for Miami Apartments at Breach Candy in South Mumbai. 

These projects highlight the growing interest among real estate players in redevelopment-focused growth in Mumbai.

How Redevelopment Benefits Homeowners and Developers

Redeveloping old buildings gives residents access to modern amenities, improved safety, and better infrastructure. Residents must receive nearby alternate housing or rent compensation, with builders paying a year's rent upfront. Since the July 2018 amendment (Chapter 6A), societies of buildings over 30 years old in poor condition can officially propose redevelopment through their registered association.

“The developer pays for construction and renovation in exchange for the right to build and sell more flats or commercial units on the redeveloped property,” says Garg.

Here’s how it works: 

Owner Benefits (Generally Free): 

• Owners usually receive a new flat at no cost, often with additional space (around 10-20 per cent more area). 

• They get temporary accommodation or rent during the construction phase. 

• New amenities like elevators, parking, and gyms are often included as additional benefits. 

Top-Up Payments (in Some Cases):

• If owners want a significantly larger apartment or luxury upgrades, they may need to pay for the extra area or any custom features. 

• If a project faces unexpected costs or if the society negotiates poorly, developers might try to pass on some costs. However, this is less likely if the agreements are well structured. 

What If Owners Refuse to Leave? 

• Negotiation & Mediation: Developers and societies usually try to woo holdouts with negotiations and better compensation offers. 

• Legal Action: If most of the society approves redevelopment (Maharashtra law requires 75 per cent consent), the developer can evict the remaining non-complying members.

• Housing Authority Involvement: MHADA and the cooperative registrar might also step in to assist in the final resolutions.

Redevelopment ideally should be completed within two years, and three years in special circumstances. “Any delays are compensated in additional rent, which the residents receive from the developer. The appeal of redevelopment for developers lies in the prime locations in well-established neighborhoods, strong demand and quicker sales in comparison to the outskirts of the city,” says Garg.

Role Of RERA In Redevelopment

If the redevelopment involves sale of flats to outsiders (not just existing society members), the project becomes a “real estate project” under the MahaRERA (Maharashtra RERA) Act. 

• The builder must register the project with RERA before advertising or selling.

• The builder must comply with timelines, quality standards, and disclosure norms.

• Buyers (including society members getting new flats + new purchasers) can hold the builder accountable for delays or defects under RERA.

• If the project has a commercial component for sale:
  Even in redevelopment, if the builder sells shops/offices to the public, RERA registration is needed.

• If all flats are allotted only to existing members and no new saleable units are created for the open market, it typically stays outside the RERA purview. However, even in such cases, society members can include RERA-like clauses in their redevelopment agreement to enforce timelines and penalties.

Self-Redevelopment: An Undiscovered Option

Self-redevelopment policy within Maharashtra offers more indepth choices other than the usual dealings with builders. Society members are capable of mobilising their own redevelopments through the hiring of professionals, i.e., architects, construction workers, and project leaders. Such an approach diminishes the reliance on external developers and empowers members to manage the structure's timing, use, and quality.

The Effect Of Redevelopment On The Real Estate Market In Mumbai

Mumbai’s property registration metrics along with real estate trends display a correlation with the popularity of redevelopment. The city has approximately 10,000-12,000 property registrations a month, and estimations show that almost 10 per cent of transactions fall under the re-development agreement category.

This trend is likely to grow as more housing societies and individual buildings choose redevelopment to meet modern living standards. 

“As Mumbai transforms, redevelopment is going to be what keeps its real estate market ticking. Developers are spending big on large projects, and homeowners are reaping the rewards. The city’s silhouette will look vastly different in the next several decades,” says Garg.

Areas Suitable For Redevelopment

Infrastructure projects likely to define Mumbai’s redevelopment today and in future include:

The partial opening of the Coastal Road and Metro-3, which will bring a great deal of relief to commuting in the city. This growing degree of connectivity has reignited a certain level of interest in rejuvenation of older buildings, particularly in South and Central Mumbai. These areas now hold greater promise for both residential and commercial projects.

Thanks to the Coastal Road and Metro-3, places, such as Nariman Point, Cuffe Parade, Churchgate and Worli, as well as the suburbs of Bandra, Andheri, Malad, and Borivali, stand to benefit from increased connectivity and considerable redevelopment. The most ambitious project, which is expected to last 17 years, is in Dharavi, covering 600 acres adjacent to the BKC, with slum rehabilitation scheduled for the first seven years. Reserved for rehabilitation is 125 acres of land reclaimed from the Deonar dumping ground. These changes are aimed at transforming the city’s skyline and boosting the economy of Mumbai.