Inside Mumbai Real Estate: Key Takeaways from Sahil Vora’s Conversation with RealEstateWithMayank

Sahil Vora of SILA is a guest on Real Estate With Mayank who discloses what actually makes high-rise development, high-rise construction regulation a nightmare, and where he thinks the biggest opportunity lies in the Mumbai property market.

Cost and construction: 20-storey vs 80-storey

The difference between a super high-rise and a mid-rise is not only cosmetic, Vora points out, but represents a fundamental change in the cost structure.

• Steel usage: Steel is normally required to be approximately 4.5-5 kg/ sq. ft in a 20 storey structure whereas a 80 storey tower may need approximately 6-8 kg/ sq. ft, based on the structure and safety considerations. This in itself forms a big portion of the increase in the material cost per square foot.
• Concrete and structural design: A concrete coefficient and a general structural system of the building with 80 storeys becomes much more complicated, which means the extra costs of material, engineering, and implementation.
• Time and financing: High-rise construction is typically financed using construction finance or debt and the protracted nature of the construction of an 80 storey high-rise would result in increased interest outlay and increased burden of the financing over time. Time is an important cost driver, not a scheduling detail because project retums can be meaningfully hit by delays or market cycles.

All these elements combine to render super-tall towers structural safer and more iconic yet also expensive and more vulnerable to execution risk.

Regulatory challenges for 80-storey towers

In addition to engineering, Vora highlights that regulation can be considered a significant distinction between a project with 20 and 80 storeys.

• Fire and life safety norms: Tall structures have much more demanding fire-safety and evacuations regulations that include sophisticated systems, rescue zones, and multiple approvals.
• Civil aviation clearance: Due to their elevation, such towers must be cleared by the civil aviation authorities so as to avoid interference with the air routes or other safety standards.
• High-Rise Committee approvals: Very tail projects such as High-Rise Committee approvals in Mumbai have to pass through a separate High-Raise Committee, which further increases the technical inspection and possible project timelines uncertainty.

This regulatory stack makes both a complex and high-risk process of verticalisation to 80 storeys.

Investment insights: where Mumbai is headed

The discussion further takes an aerial view of the area in which Vora is most bullish in the changing landscape of Mumbai.

• Beyond the old luxury core: Premium real estate is no longer a preserve of the traditional addresses such as the Altamount Road, Carmichael Road, and Malabar Hill, New micro-markets are also becoming stiff competitors in the upper end.
• The “six-figure” PSF club: Vora is of the opinion that in the next 1-5 years, 10-15 micro-markets in Mumbai would be regularly priced over 100.000 per sq. ft. and above, which would be in line with the double-digit income and infrastructure improvements.
• Coastal Road as a value driver: Places within about a five minutes ride of an entry/ exit of the Coastal Road, including portions of Juhu, Versova, and other coastal or related areas, are likely to experience disproportionate appreciation with the reduction in commute time and the enhancement of connectivity.

To investors and homebuyers, the requirement is simple, follow infrastructure, and in particular the Coastal Road, and scrutinize the new micro-markets, which are a congruence of access, lifestyle and future supply limits.

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