DLF re-enters Mumbai market with ₹800 crore premium housing project

Business Standard

7 days ago

Gurugram-based DLF, India's top listed real estate developer, has entered the Mumbai market with a premium residential development, investing Rs 800–900 crore in the first phase of the project, which is estimated to generate Rs 2,300 crore in revenue.
The first phase of the project, The Westpark, comprising four 37-storey residential towers and 416 residences, will be delivered in the next four years. It spans 5.18 acres and is part of a larger 10-acre master plan with eight distinctive towers.
The company has partnered with Trident Realty, another Gurugram-based developer with ongoing projects in Mumbai. The project falls under the Slum Rehabilitation Authority (SRA) scheme. However, DLF will oversee only the greenfield portion, while Trident will handle the SRA component. DLF holds a 51 per cent stake in the project; the remaining 49 per cent is held by Trident.
The development will offer a mix of 3- and 4-BHK residences ranging from 1,125 to 2,500 sq ft, along with a limited number of exclusive penthouses. Prices will range from Rs 37,000 to Rs 47,000 per sq ft — effectively Rs 4.5–8 crore per unit.
The second phase of the project is likely to be launched next year and is expected to generate revenues of Rs 2,300–2,500 crore.
Aakash Ohri, joint managing director and chief business officer, DLF Homes, said the company aims to diversify its portfolio and takes Mumbai 'very seriously'. 'Mumbai and Delhi are going to be two big markets (for us) because they're the ones who are going to give us our returns,' he added.
Ohri stated the company has already received 5–20 project proposals in Mumbai. 'We want to start and get this product off the ground first, show some strength and ability, and then get down to doing it (more projects in Mumbai),' he added.
The company is banking on its lifestyle-oriented developments and strong balance sheet. 'What we bring to the table is the lifestyle story. This is the difference between everybody else and DLF. DLF will not operate in any city, including Gurugram, if the margins are not conducive to DLF; we don't have to. Today, we are a debt-free company; we are cash-rich, we have got land banks to carry us for the next 25 years. Why do I need to get into any stress? I don't need to prove anything,' Ohri said.
DLF had earlier exited Mumbai in 2012 as part of its deleveraging strategy. It sold a prime 17-acre land parcel in Lower Parel to Lodha Developers for Rs 2,700 crore to reduce debt.
'That (Mumbai exit) was part of our development plan. Out of 22 cities, one didn't work out. Fine. At that point in time, Gurugram was also good and needed a lot of attention. Gurugram was where a lot of our future interests and the business were. (In that land deal) we got out at a good premium. It was not a loss,' Ohri said.
This time, the company is confident and has received a positive response from channel partners. 'It's just that there's never a right or wrong time. Even the markets are different and far more mature and conducive. You cannot not be in Mumbai, being a national player. Competition is always good,' Ohri added.
Mixed response from sector experts
Industry experts have expressed mixed sentiments. Gulam Zia, senior executive director at Knight Frank India, said DLF has entered the market at a time when signs of fatigue are visible and the cycle is nearing its peak.
'The next 2–3 years will be tough. You need to be invested in the property long enough to reap the benefits. Since it's a large property of more than 17 acres, they will be developing it over at least one or two market cycles. So, entry will be tough,' Zia added.
He also noted that buyers in Mumbai may not be enamoured by the luxury brand DLF has built in Gurugram.
However, a sector analyst, speaking on condition of anonymity, said the company may benefit from its brand, the project's location, and the vibrancy of Mumbai's real estate market. 'The company wants to have a footprint in a market like Mumbai and better realisations,' the analyst added.
Another industry expert, who did not wish to be named, noted that DLF may face challenges due to the hyperlocal nature of real estate and strong competition from well-established Mumbai-based developers.