India's first supertall - A sign of economic progress

India’s first supertall: A sign of economic progress
Written by JLL Staff reporter

India’s first supertall: A sign of economic progress

As India’s economy goes from strength to strength, the developers of World One are constructing the country’s first supertall building and the world’s tallest residential tower in Mumbai.

Located on a 17-acre site, the 117-storey mixed use building will stand close to half a kilometer tall. The Council of Tall Buildings and Urban Habitat (CTBUH) defines ‘supertall’ as a building over 300 meters.

“Such towers, often deemed ‘trophy assets’, are contributors to the brand image of a city,” says Ashutosh Limaye, Head of Research and Real Estate Intelligence Service for JLL India.

And World One developer Lodha is hoping the new building will put Mumbai on the map. “World economies have been typically marked by iconic structures,” says Lodha says in the press statement. “With World One, Lodha will give Mumbai its well-deserved icon.”

A modern building for modern times

Historically, the construction of skyscrapers and iconic buildings has had strong associations with a nation’s economic and political progress. Having overtaken China as the world’s fastest-growing economy, India is currently seen as a bright spot in the global economy. In fact, the World Bank in January projected that India will grow by a robust 7.8 percent in 2016, and 7.9 percent in the next two years. The World Bank also predicted that India will be the fastest growing economy in the world over the next three years.

World One in the financial heart of Mumbai will house 300 homes, including 3 and 4 bedroom residences, villas with private pools and a number of luxurious duplexes. Its construction also comes at a time when the real estate market is recovering from a slowdown, according to Ashutosh.

2015 was a relatively weak year for the residential real estate market in India. Demand has since picked up in cities such as Mumbai. “The residential real estate sector is gradually getting back on track,” says Anuj Puri, Chairman and Country head, JLL India. “With the Reserve Bank of India (RBI) lowering interest rates for home buyers, developers offering easy payment plans and focusing on delivery of under-construction projects with fewer new launches in cities like Mumbai and sales picking up in Mumbai, Hyderabad and Bangalore, unsold inventories are gradually declining.”

The typical profile of the buyer of high rises in a city like Mumbai varies depending on the location of the high rise, says Limaye. Who inhabits them is a function of real estate costs, he adds. With apartment prices at World One starting at US$2 million, it’s only the crème de la crème in Mumbai that can aspire to build their homes in the skies.

Limaye points out that tall buildings in premium neighborhoods – like World One – are the preserve of High Net Worth Individuals whereas in the suburbs, high rise buildings are inhabited by high middle or even middle income groups.

A high rise city

Mumbai’s penchant for vertical growth stems from the island city being flanked by the sea on three sides and the resulting severe land constraints, says Limaye.

According to CBTUH, Mumbai tops the rankings among domestic cities with the highest number of completed buildings over 150 meters tall. Most of these buildings are for residential use. Globally it ranked 33 just after Sydney in Australia. It has more 150 meter-plus buildings than Beijing in China and Doha in Qatar.

Limaye is confident that having a supertall buildings such as World One in India will increase investor interest in such structures as an asset class within the country and boost vertical expansion – a trend that is slowly becoming visible across India.

It also sends a strong signal about how the country’s economy is gathering momentum while its cities become increasingly dynamic. JLL’s City Momentum Index (CMI), which tracks the speed of change of a city’s economy and commercial real estate market, shows India cities climbing the ranks with Hyderabad joining Bangalore in the top 20 Emerging World Cities.