The Hindu Business Line : `Mood upbeat in Mumbai's realty sector'

The Managing Director of Hiranandani Constructions, Mr Niranjan Hiranandani, says, the overall mood was negative on matters related to mill land sale and people were expecting negative orders, but the Supreme Court's verdict has completely changed the real estate market environment and feeling.

Mr Hiranandani expects a burst of activity in the real estate sector in the short term. He also says that the textile mill area is likely to see stability in prices now and a slight upward movement later. He also believes that since there are big players showing so much interest in Mumbai, it is unlikely that the prices would fall. Excerpts from CNBC-TV18's exclusive interview.

What kind of impact do you see on the real estate prices in Mumbai?

In the short run, there is going to be a burst of activity. So it is a very proactive start because we have had so many negative orders. The mill land case, the Transfer of Development Rights (TDR) case, the issues on environment, there have been so many negatives in the real estate sector in the last couple of months.

The real estate people were reeling under these orders. It is a very positive sign now.

What is the impact this case will have on other cases and which are the other cases that are likely to be impacted by this one?

The cases on TDR. Consumption of TDR in Mumbai has been impacted by many cases. Public Interest Litigations which are pending before the High Court actually arose from issues where people were legally using TDR.

But the PIL said that Mumbai is very congested and hence it should not be permitted. Those cases are pending and are likely to come up for decision in the next couple of months.

Do you think this will act as a precedent?

The overall mood was negative on these matters; people were expecting negative orders and this has completely changed the real estate market environment and feeling.

What does it really mean for the prices, because there was an expectation that if the Supreme Court order did not go in the favour of NTC, there could be restricted supply of land and that would impact cost?

I think the mid-market that is the Parel segment, the textile area will see stabilising of prices, because a large amount of material would come into the marketplace in the next 24 months. So one will see some sort of stabilising of the marketplace. But the demand for Mumbai has become so high. The interest in investment in the real estate sector in Mumbai, especially after Mr Bush's visit, will soon see a moving up of prices too. But in the short run, that will stabilise.

You said that it is going to open up a lot more land for development. How much land do you expect immediately to come out into the market, and within the next six to nine months how much of an addition could there be to it?

We would see about 100-150 acres to come into marketplace immediately, and probably followed by another 100-150 acres in the next 12 months.

So, it would be about 200-300 acres of land opening up in a period of time.

There is a tremendous demand for housing, so is there any kind of indicator to what segment of construction we could be looking at, multiplexes, malls, commercial space, housing?

It is a combination of all these. One is going to see malls, commercial, residential. I think it will be a mix in the Lower Parel segment.