Developers eye mixed-use projects to generate cash flow

DB Realty recently announced it would develop its two acre parcel in Marine Lines as a mixed-use project rather than build just a hotel. So it’s combining a residential property, a mall, a hotel and an office tower in one single, large complex. The change of plan has been necessitated by the need to generate cash quickly; while hotels and commercial properties take time to deliver returns, it’s far quicker for a housing complex where the cash flows in almost immediately.

Indiabulls Asset Management CEO Ambar Maheswari is convinced that a mixed-use project works best when there’s a residential piece since that’s what generates the bulk of the cash flows. And as Anshuman Magazine, CMD, CB Richard Ellis, points out, it’s one way to mitigate risk since demand from the residential space feeds the retail and hotel segments.

The mixed-used formula certainly seems to be the only way out because with the hotel sector suffering high vacancy levels — supply of rooms has doubled in two years — capital is languishing.

Which is why Hubtown, which bought Hindoostan Mills in central Mumbai along with DLF in 2007 hoping to build a hotel, abandoned the idea altogether. Vimal Shah, MD, Hubtown, confirmed to FE, his team didn’t feel it would be a viable venture. Now, Oberoi Realty has roped in Ritz Carlton for the Worli complex in central Mumbai.

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MCHI-THANE has always been very clear that fine housing complexes and shopping malls cannot stand in isolation. A great City is the sum total of great buildings, great infrastructure and great people. MCHI has been committed to growth of the real estate sector and is credited with the harmonious growth and rise in quality and standards of construction in Thane City in the past decade.

Its aim as an Association of Developers has been to seek rational rules and regulations which are uniformly applied across the board as this will to a great extent result in speedy construction, cost reduction, fair pricing and a push for better quality standards at par with the developed world, with a high level of transparency.