Dubai: A developer in India is doing things the Dubai “way”.
Mumbai-based Omkar Realtors is opting for a 5 per cent down payment and the rest after handover for its Rs17 billion (Dh965.13 million) residential project in Mumbai.
“Post-handover payment schemes are relatively unheard of in India,” said Rahul Maroo, senior vice-president, “But with the passage of India’s Rera [Real Estate Regulation Act], there’s far more confidence in what developers can and cannot be doing.
“In one stroke, Rera has separated the men from the boys as far as development activity is concerned. Developers with iffy track-records have been washed out of the market. We believe in the Rera era, branded developments backed up by sufficient funds and capable of on-time delivery can offer post-handover payment schemes.”
Rera has put in place stiff penalties, including the threat of jail terms, for developers who play fast and loose with investor funds. It has also set guidelines on how investor funds can be utilised through the lifetime of a project.
In Dubai, all through the last 18 months, developers had been competing in offering extra-generous payback schemes, including periods of up to 10 years after handover. This was meant to offset the soft trading conditions that existed in the local realty market between mid-2014 to mid-2016. And the move paid off for Dubai’s developers with off-plan sales easily trumping ready property transactions through the last 12 months.
Interestingly, the Omkar project — located in the western suburb of Andheri — is one of the biggest residential project launches in India in recent quarters. The property market is still coming to terms with demonetisation and Rera. Domestic sales are yet to recover in full.
But Maroo has no such doubts over the new project. It has released Phase 1 featuring 1,200 apartment units. To date, it had expressions of interest totalling 1,500. The launch prices and the design details are to be revealed later this week. The project is located on the Western Express highway of Andheri-Jogeshwari east corridor.
Based on the interest generated, Omkar could be setting price levels of Rs8.7 million for a one-bed and Rs12 million for a two-bed. The units are between 355- to 710 square feet.
The Andheri project will eventually cover 65 acres, all of which Omkar has acquired. It was previously the site of a slum, and Omkar has made a commitment to rehouse the earlier inhabitants in a future phase, as per the laws. But that cluster will have “separate ingress and egress points”, said Maroo.
“We are looking at four or five additional phases and to be built over years. The first phase covering 6 acres should be ready by 2022 — we expect to generate Rs20 billion in sales from this one alone.”
On completion, it is in line to be the “largest boutique residential gated community in Mumbai”.
Omkar’s development focus is stuck on Mumbai
Omkar has delivered 15 projects in Mumbai and developing another six. The plan is to complete development of 20 million square feet by 2018 and with an additional pipeline of 40 million square feet.
Its flagship project remains the super-premium three-tower ‘Omkar 1973’ project in Worli, Two of the towers are of 81 storeys and third at 76.