At least six real estate developers from Bengaluru and Mumbai have increased their footprint in the two cities during the last ten years. Numerous companies, including the Delhi-based DLF, the Bengaluru-based Prestige Group, and Puravankara, have announced or entered the Mumbai real estate market. Realtors from Mumbai, including Lodha and Godrej, have also set foot in Bengaluru.  

However, why do developers wish to have a piece of the real estate markets in Bengaluru and Mumbai? Real estate experts say the main goal is to increase and establish their presence in more cities. 

According to experts, the growth pattern of listed real estate developers in these cities is more pronounced than that of unlisted or mid-sized realtors. 

Mumbai attracts developers due to its high sales velocity and better margins. 

Puravabkara Limited, a Bengaluru-based company, made market entries in Pune in 2017 and Mumbai in 2021. The company has been expanding quickly into Pune and Mumbai in recent years. The company also has a substantial portfolio in the Pune and Mumbai commercial markets. 

“There are several reasons why expanding into the Mumbai real estate market makes sense. The first is that the size of the real estate market in the Mumbai Metropolitan Region (MMR) is nearly the same as that of the entire South Indian real estate market, making it the largest in the nation. Rajat Rastogi, CEO of Puravankara Limited’s West and Commercial Assets, stated, “Secondly, MMR offers products across price segments that range from ultra-luxury to affordable housing thus enabling a wide product range.” 

Approximately 4.5 million square feet are currently under development in Puravankara, the residential real estate market in Mumbai and Pune. This includes several projects in both cities. “In Pune and Mumbai, we intend to launch six or seven projects in the upcoming year.” Our plans include creating a substantial commercial real estate portfolio for Pune and Mumbai. Therefore, We are deepening our presence in Mumbai and Pune in addition to having a footprint,” Rastogi stated. 

As of FY24, Prestige Group, another developer based in Bengaluru, has 37 active projects. The company’s investors’ presentation for FY24, of these projects, seven are in Mumbai, twenty are in Bengaluru, and the rest are in places like Hyderabad, Calicut, Bengaluru, Kochi, and Ooty. 

Thirteen of the thirty projects the company has in the works are in Bengaluru and three are in Mumbai. 

An anonymous developer from Mumbai informed HT Digital that despite having a solid portfolio in Mumbai, he began a project in Pune. “I will need to build 20 square feet in Pune to make the same amount of money as one square foot in Mumbai. Thus, it makes sense for firms with listings to join the Mumbai market. The demand for luxury housing puts you on different scales and price points, so mid- and small-sized developers should keep working in their home market of Mumbai, said the speaker. 

Mumbai realtor moves into Gurgaon; North Indian developer ventures into Mumbai 

Mumbai’s Andheri is expected to see the launch of a project by Delhi-based DLF this fiscal year. Together with Trident Group, DLF is developing the Slum Rehabilitation Authority project. 

Oberoi Realty declared in November 2023 that it would buy 14.81 acres of land in Gurgaon, Haryana’s Sector 58 for Rs 597 crore. Up to 2.6 million square feet of floor area are believed to be attainable with this land. 

The company plans to construct a luxurious residential group housing project on this land. 

Are developers from Mumbai moving to Bengaluru because of the lower land prices? 

Bengaluru is the first choice for Mumbai-based developers looking to expand across multiple cities or the nation. Bengaluru is the first choice for Mumbai-based developers looking to expand across several cities or the entire country. Speaking with HT Digital, industry insiders cited high end-user demand and land availability over investment options as key draw factors for this market. 

“There is a lot of demand in Bengaluru, the country’s largest commercial market. According to Shantanu Mazumder, executive director of Knight Frank India’s Bengaluru division, other developers’ attention started turning towards the city at that point and has since grown. 

Additionally, he clarified, that lower land prices in Bengaluru relative to Mumbai aid developers in maintaining profit margins because building costs are relatively constant across cities. 

Over the last ten years, several well-known Mumbai brands, including Tata Housing, Mahindra Lifespaces, and Godrej Properties, have successfully entered the garden city. 

For instance, Lodha recently launched two opulent residential projects in Bengaluru’s eastern and southern regions, making its first foray into the business. 

According to data accessible on the integrated real estate platform Square Yards, Godrej Properties has expanded its presence in Bengaluru with over 30 projects across various categories. 

On the other hand, Tata Housing has yet to finish any projects in the city. After moving to Bengaluru in 2015, Mahindra Lifespaces has started work on four residential developments. 

The final consumer drives the real estate market in Bengaluru.

Experts stated that attracting Bengaluru’s astute consumers necessitates fierce competition due to having a diverse range of seasoned home brands, including Sobha, Puravankara, provident Housing, RMZ, and Brigade, among many others.  

Bangalore is a sizable market. Within the Grade A space, there are a minimum of 17-18 established operators. Mazumder clarified that many developers who relocated to Bengaluru struggled with their first one or two projects since they needed to establish a track record of success to gain trust. 

He claimed the patrons here are seasoned because they have watched home players grow. Consequently, a novice player typically completes the life cycle of two to three projects before branching out.  

“Bengaluru is a very evident end-user-driven market; it is not a speculative market,” Mazumder declared. 

“Identifying, building, and leasing are the first steps in the commercial segment. Thus, the player must continue to invest in the project for four to five years before leasing. Consequently, most of them are eager to begin with residential properties before gradually expanding into the commercial market,” he continued.