Lower Parel likely to be over supply zone

Lower Parel has emerged as a major corporate destination in South Mumbai
after Nariman Point, particularly after seeing significant commercial development on defunct mill land. Many corporates have built corporate offices in the area while many more are in the pipeline. The area has also seen the development of many high-end residential projects, particularly in the last three to four years, targeting the elite South Mumbai buyers.

Going forward we believe that 1) Lower Parel is likely to see supply of over 10 msf in next 3-4 years thus making it an over supply zone 2) Prices in this zone is likely to correct taking into consideration above supply, supply of NTC mills, not yet factored in(3) Surroundings areas like Worli, Prabhadevi, Mahalaxmi etc will be buyers first choice taking into consideration better infrastructure facilities. We believe new launches from DLF, Lodha Raheja has to be at decent price (Rs 15,000-20,000 psf) to bring absorption in Lower Parel.

Big players like DLF and Lodha are expected to launch high-end projects in Lower Parel – in our opinion, to drive absorption levels, it is critical that these projects are rightly priced. We believe that prices at Lower Parel should be discounted to Worli, Mahalaxmi and Prabhadevi due to quality of infrastructure facilities and congestion levels. Lower Parel may also see higher absorption if lower unit size of 1000-1500sq ft is introduced as against the current average unit size of 2500 sq ft.