Highest & Best Use Analysis for Andheri Micro Market

Highest & Best Use Analysis for Andheri Micro Market MBA REAL ESTATE MANAGEMENT SEMESTER I, 2018 By Ms. Shamal Pandey

Mr. Tejas Mohata

Mr. Karan Rego

Course Code: AUMREAL638 Real Estate Market Dynamics

Highest & Best Use Analysis for Andheri Micro Market

Abstract The report is on highest & best use study of a potential site in Andheri which is an important micro market of Mumbai. Market Delineation report contains overall micro market study from its Geographical presence like terrain, natural barriers & land cover.

Its Demographics such as population growth & its projections, households, lifestyle of consumers, age, income potential & its source, occupation mix, etc. Historic growth & Regional linkages like roads, airport, rail & metro connectivity. Market Delineation report also includes study of Andheri’s Economy & Urban Infrastructure development.

Its Traffic & transportation approach such as volume of traffic & level of street congestion around our site at different intervals, access of vehicles to location, availability of mass transits & major highways. Also study of Site characteristics that include site potential in terms of its size & shape, parking volume, type of zoning, visibility and access of vehicles & pedestrians to site. Basically Market Delineation report refers to overall development in Andheri and future growth potential majorly in terms of economy, regional linkages & infrastructure development.

Feasibility report focuses on highest and best use of a potential site in Andheri.

The site finalisation is done by analysing property productivity & market delineation through gravity models, etc. Demand-Supply & Competition analysis is done for different properties such as residential, commercial, retail & hospitality and forecasting highest and best use properties supported by financial feasibility study. The financial modelling include economic analysis & cost factors such as pricing, market rate contours for land as well as ready properties, rental values in catchment area, local taxes & operations & maintenance cost. Financial modelling also includes Cash flow analysis such as discounted cash flows, NPV- Net present value and IRR- Internal rate of return. Finally we have proposed a property on a potential site analysing its financial yield through higher NPV & IRR. Financial Feasibility is supported by risk, sensitivity and scenario analysis.

Keywords: Highest & Best Use, financial feasibility, cash flow analysis, NPV & IRR.

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Highest & Best Use Analysis for Andheri Micro Market

Certificate

It is certified that the work content in the report title

HIGHEST AND BEST USE ANALYSIS FOR ANDHERI MICRO MARKET

by MS. SHAMAL PANDEY MR. TEJAS MOHATA MR. KARAN REGO,

has been carried out under my guidance

PROF. SHEKHAR VISHNU NAGARGOJE (Course Coordinator) July 2018 to December 2018

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Highest & Best Use Analysis for Andheri Micro Market

Acknowledgement We sincerely acknowledge all the resources who helped us in completing the study for HIGHEST AND BEST USE ANALYSIS FOR ANDHERI MICRO MARKET. We are grateful to our parents for their support & for the inspiration to work hard.

We would like to thank our guide Prof. Shekhar Vishnu Nagargoje for his experienced guidance which was very helpful for our study.

We have been very fortunate to study in RICS School of Built Environment, Mumbai, which has given us worldwide knowledge, opened a world view & taught us more than just managerial skills & gave us an open platform for discussion rather than a conservative rigid institution of learning books.

We would like to thank all our professors from whom we have learnt dierent subjects throughout the program.

We would like to specially thank Mr. Ivan Rego and Ar. Supriya Rasal for guiding and helping us whenever needed for the study.

Finally, We are grateful to all our friends, colleagues and seniors who have been there for our help & support, for helping us to complete the report.

THANK YOU.

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Highest & Best Use Analysis for Andheri Micro Market

Table of Contents Abstract ................................................................................................................... 1 Certificate ................................................................................................................ 2 Acknowledgement................................................................................................... 3 Table of Figures ...................................................................................................... 8 List of Tables........................................................................................................... 9 List of Charts ......................................................................................................... 10 List of Abbreviations .............................................................................................. 11 Chapter 1: Introduction .......................................................................................... 13 1.1 Background ..................................................................................................... 13 1.2 Aim .................................................................................................................. 14 1.3 Objective ......................................................................................................... 14 1.4 Methodology ................................................................................................... 15 Primary Study .................................................................................................... 15 Secondary Study ............................................................................................... 15 1.5 Scope of the project ........................................................................................ 15 1.6 Limitations of the study ................................................................................... 15 Chapter 2: Market Delineation Report .................................................................. 16 2.1 Geography of the micro-market ...................................................................... 16 2.1.1 Terrain ...................................................................................................... 16 2.1.2 Natural Barriers......................................................................................... 17 2.1.3 Geographical extent of Assembly Constituencies in Mumbai City district . 18 2.1.4 Land Cover ............................................................................................... 19 2.2 Demographics ................................................................................................. 21 2.2.1 Population and Household base ............................................................... 21 2.2.2 Decadal Variation in Population ................................................................ 22 2.2.3 Slum Population ........................................................................................ 22 2.2.4 House Hold Base ...................................................................................... 23 2.2.5 Population Growth Potential ..................................................................... 24 2.2.6 Ward Density ............................................................................................ 25 2.2.7 Sex Ratio .................................................................................................. 25 2.2.8 Literacy Rate............................................................................................. 26

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Highest & Best Use Analysis for Andheri Micro Market

2.2.9 Work Participation Rate ............................................................................ 27 2.3 Historic Growth ............................................................................................... 29 Year: 2000 ......................................................................................................... 29 Year: 2005 ......................................................................................................... 29 Year: 2010 ......................................................................................................... 30 Year: 2018 ......................................................................................................... 30 2.4 Regional Linkage ............................................................................................ 31 2.4.1 Present Linkages ...................................................................................... 31 2.4.2 Future Linkages ........................................................................................ 32 2.5 Economy ......................................................................................................... 33 2.5.1 Economy of Andheri East ......................................................................... 33 2.5.2 Economy of Andheri West ........................................................................ 34 2.6 Site Selection .................................................................................................. 35 2.6.1 Site Justification ........................................................................................ 35 2.6.2 Site Attributes ........................................................................................... 35 2.7 Development Plan & Municipal/Urban Development Authorities..................... 36 2.7.1 Development Plan 2034 ........................................................................... 36 2.7.2 Development Authority for the site ............................................................ 38 2.8 Development Control Regulation .................................................................... 39 2.9 Infrastructure Development ............................................................................. 40 Physical Infrastructure ....................................................................................... 40 Social Infrastructure ........................................................................................... 41 Environmental Infrastructure .............................................................................. 42 Digital Infrastructure........................................................................................... 43 2.10 Urban Fabric ................................................................................................. 44 2.10.1 Andheri East ........................................................................................... 44 2.10.2 Andheri West .......................................................................................... 45 2.11 Traffic & Transportation................................................................................. 46 2.11.1 Aim ......................................................................................................... 46 2.11.2 Methodology ........................................................................................... 46 2.11.3 Manual Method ....................................................................................... 46 2.11.4 Automatic Method ................................................................................... 48

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Highest & Best Use Analysis for Andheri Micro Market

2.11.5 Conclusion .............................................................................................. 48 2.12 Future Growth potential of the area .............................................................. 49 2.12.1 Infrastructure, Upcoming Projects & Existing Natural Barriers ................ 49 2.12.2 Future growth around the site as per Development Plans ...................... 49 2.12.3 FSI Permissible ....................................................................................... 50 2.13 SWOT Analysis ............................................................................................. 51 2.13.1 Andheri East ........................................................................................... 51 2.13.2 Andheri West .......................................................................................... 52 2.14 Socio Economic classification (Income groups) ............................................ 53 2.15 Site Characteristics ....................................................................................... 55 2.15.1 Parking Spaces around the site .............................................................. 55 2.15.2 Visibility of site from street ...................................................................... 56 2.15.3 Historic growth of site ............................................................................. 56 Chapter 3: Feasibility Report ................................................................................ 57 3.1 Property Productivity Analysis ......................................................................... 57 3.1.1 Physical Attribute ...................................................................................... 57 3.1.2 Legal Attribute........................................................................................... 59 3.1.3 Location Attribute ...................................................................................... 59 3.2 Market Delineation .......................................................................................... 60 3.2.1 Time Travel Distance Method ................................................................... 60 3.2.2 Geographical Boundary ............................................................................ 61 3.3. Retail (Shopping Mall) .................................................................................... 62 3.3.1 Indian Retail Market Overview .................................................................. 62 3.3.2 Retail Development & Trends in Andheri Micro Market ............................ 63 3.3.3 Consumer Profile- Product Category Split ................................................ 64 3.3.4 Brand-wise split of occupied modern retail store space in malls .............. 64 3.3.5 Shop area-wise split of occupied modern retail store space in malls ....... 65 3.3.6 Growth Drivers ......................................................................................... 66 3.3.7 Retail Lease-Rent Price ........................................................................... 66 3.3.8 Retail Market Delineation ......................................................................... 67 3.3.9 Spending Pattern in the micro market ...................................................... 68 3.3.10 Demand Estimation ............................................................................... 71

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Highest & Best Use Analysis for Andheri Micro Market

3.3.11 Supply Analysis ..................................................................................... 73 3.3.12 Demand Supply Analysis ....................................................................... 73 3.4 Commercial (Grade A office space) ................................................................ 74 3.4.1 Commercial Development & Trends in Andheri Micro Market .................. 74 3.4.2 Commercial Demand Analysis .................................................................. 76 3.4.3 Commercial Supply Analysis .................................................................... 77 3.4.4 Commercial Demand Supply Analysis ...................................................... 78 3.5 Hospitality (Hotel Property) ............................................................................. 79 3.5.1 Hospitality Development & Trends in Andheri Micro Market ..................... 79 3.5.2 Hospitality Demand segmentation for Andheri .......................................... 80 3.5.3 Hospitality Demand Forecast .................................................................... 81 3.5.3 Hospitality Demand Forecast .................................................................... 82 3.5.4 Demand drivers for hospitality .................................................................. 83 3.5.5 Supply Analysis for Hospitality .................................................................. 84 3.5.6 Hospitality Demand Supply Analysis ........................................................ 87 Chapter 4: Financial Feasibility ............................................................................ 88 4.1 General Assumptions ...................................................................................... 88 4.2 Commercial- 100% ......................................................................................... 89 4.2.1 Assumptions ............................................................................................. 89 4.3 Retail- 100% ................................................................................................... 89 4.3.1 Assumptions ............................................................................................. 89 4.4 Hospitality- 100% ............................................................................................ 90 4.4.1 Assumptions ............................................................................................. 90 4.5 Mix Use Development ..................................................................................... 91 4.5.1 Dual productivity analysis ......................................................................... 91 4.5.2 Triple productivity analysis ........................................................................ 92 Chapter 5: Recommendations .............................................................................. 93 5.1 Best Case Scenario ........................................................................................ 93 5.2 Recommendations .......................................................................................... 94 Bibliography .......................................................................................................... 95

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Highest & Best Use Analysis for Andheri Micro Market

Table of Figures Figure 1: Location of Andheri Micro Market & Gilbert Hill ......................................... 13 Figure 2: Terrain of Andheri ..................................................................................... 16 Figure 3: Section of Andheri Terrain......................................................................... 17 Figure 4: Natural Barriers ......................................................................................... 17 Figure 5: Geographical extent of Andheri ................................................................. 18 Figure 6: K/E ward Land Use plan with Legend ....................................................... 19 Figure 7: K/W ward Land Use plan .......................................................................... 20 Figure 8: K/W ward Land Use plan .......................................................................... 20 Figure 9: Mumbai District Suburban Sections .......................................................... 21 Figure 10: Andheri in 2000 ....................................................................................... 29 Figure 11: Andheri in 2005 ....................................................................................... 29 Figure 12: Andheri in 2010 ....................................................................................... 30 Figure 13: Andheri in 2018 ....................................................................................... 30 Figure 14: Present Regional Linkages ..................................................................... 31 Figure 15: Proposed Regional Linkages .................................................................. 32 Figure 16: Economic Drivers in Andheri Micro Market ............................................. 33 Figure 17: Secondary Income sources for Andheri micro market ............................. 34 Figure 18: Site Location ........................................................................................... 35 Figure 19: Ward Map................................................................................................ 36 Figure 20: Development Plan 2034 .......................................................................... 37 Figure 21: MMRDA Development Plan .................................................................... 38 Figure 22: Infrastructural Developments in Andheri ................................................. 40 Figure 23: Physical Infrastructure in Andheri ............................................................ 41 Figure 24: Social Infrastructure in Andheri ............................................................... 42 Figure 25: Environmental Infrastructure of Andheri .................................................. 42 Figure 26: Digital Infrastructure of Andheri ............................................................... 43 Figure 27: Urban Fabric of Andheri East .................................................................. 44 Figure 28: Urban Fabric of Andheri West ................................................................. 45 Figure 29: Manual Method done with Traffic Survey app ......................................... 46 Figure 30: Automatic Method Traffic Analysis done at 4.30 & 7.30 pm .................... 48 Figure 31: Infrastructure, Upcoming Projects & Existing Natural Barriers around the site............................................................................................................................ 49 Figure 32: Future Growth around the site as per MMRDA DP,2034 ........................ 49 Figure 33: Future Growth around the site as per MCGM DP,2034 .......................... 50 Figure 34: Price couture of Andheri .......................................................................... 53 Figure 35: Income Group Distribution....................................................................... 54 Figure 36: Parking Spaces around site .................................................................... 55 Figure 37: Visibility of site from street....................................................................... 56 Figure 38: Historic Growth of site ............................................................................. 56 Figure 39: Area and Shape of the Plot selected ....................................................... 57

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Highest & Best Use Analysis for Andheri Micro Market

Figure 40: Section of Plot selected ........................................................................... 58 Figure 41: Access to site as per MMRDA DP, 2034 ................................................. 58 Figure 42: Civil Aviation Plan for Andheri with legend .............................................. 59 Figure 43: Time Travel Distance Method made on ArchGIS .................................... 60 Figure 44: Geographical Boundary of Andheri ......................................................... 61 Figure 45: Consumer Expenditure in India & Market Size ........................................ 62 Figure 46: Retail Developments in Andheri .............................................................. 63 Figure 47: Consumer Profile- Product Category Split............................................... 64 Figure 48: Growth Drivers ........................................................................................ 66 Figure 49: Retail Market Delineation- Time Travel Distance Method ....................... 67 Figure 50: Average Size of Malls ............................................................................. 71 Figure 51: Per Capita Mall Space ............................................................................ 72 Figure 52: Office Trends........................................................................................... 75 Figure 53: Commercial Developments around the site............................................. 76 Figure 54: Commercial Demand Heat Map .............................................................. 78 Figure 55: Commercial Supply Heat Map................................................................. 78 Figure 56: Development and trends of hospitality in Andheri ................................... 79 Figure 57: Hospitality Demand segmentation for Andheri ........................................ 80 Figure 58: Percentage of users in 5 star hotels around site ..................................... 81 Figure 59: Hotel Matrix Model for hotels around site ................................................ 82 Figure 60: Suitability of site for particular hotel site .................................................. 83

List of Tables Table 1: Ward Wise Population ................................................................................ 21 Table 2: Section Wise Population ............................................................................ 21 Table 3: Decadal Variation in Population ................................................................. 22 Table 4: Slum Population ......................................................................................... 22 Table 5: Population of Wards as per census 2011 ................................................... 23 Table 6: No. of households ...................................................................................... 23 Table 7: Project Population for K West Ward ........................................................... 24 Table 8: Project Population for K East Ward ............................................................ 24 Table 9: Sex Ratio of K/Ward ................................................................................... 25 Table 10: Sex Ratio of Andheri ................................................................................ 25 Table 11: Population and Sex Ratio in age group of 0 to 6 years ............................ 26 Table 12: Literacy Rate of K ward ............................................................................ 26 Table 13: Index of Relative Literacy of K Ward ........................................................ 26 Table 14: Work Participation Rate of K Ward ........................................................... 27 Table 15: RG Permissible ........................................................................................ 39 Table 16: Number of schools in K ward.................................................................... 41

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Highest & Best Use Analysis for Andheri Micro Market

Table 17: Number of Hospitals, Dispensaries, Maternity homes in K ward .............. 41 Table 18: Manual Survey done at 4.30 pm ............................................................... 47 Table 19: Manual Survey done at 7.30 pm ............................................................... 47 Table 20: FSI Calculations as per 1991 DCR & MMRDA DCR ................................ 50 Table 21: Income Group of Andheri ......................................................................... 54 Table 22: Prime Retail Rent Rates in Malls .............................................................. 66 Table 23: Population of Andheri ............................................................................... 72 Table 24: Current Malls in Andheri with its GLA ....................................................... 73 Table 25: Grade A rental in INR per sq. ft. per month .............................................. 74 Table 26: Commercial Grade A office space demand .............................................. 76 Table 27: Commercial Occupancy rates near the site .............................................. 77 Table 28: The Lalit.................................................................................................... 85 Table 29: JW Marriott ............................................................................................... 86 Table 30: The Leela ................................................................................................. 86 Table 31: The Hyatt .................................................................................................. 86 Table 32: ITC Maratha ............................................................................................. 87 Table 33: Assumed Cost of Construction ................................................................. 88 Table 34: Commercial- 100% ................................................................................... 89 Table 35: Retail- 100% ............................................................................................. 89 Table 36: Hospitaliy- 100% ...................................................................................... 90 Table 37: Commercial- 90% & Hospitality- 10% ....................................................... 91 Table 38: Retail- 90% & Hospitality- 10%................................................................. 91 Table 39: Commercial- 50% & Retail- 50% .............................................................. 91 Table 40: Commercial- 30% & Retail- 70% .............................................................. 92 Table 41: Commercial- 50% Hospitality- 20% Retail 30% ................................... 92 Table 42: Commercial- 30% Hospitality- 20% Retail 50% ................................... 92 Table 43: Commercial- 30% Hospitality- 20% Retail 50% with debt equity ......... 93 Table 44: Retail- 80% Hospitality- 20% with debt equity ........................................ 93

List of Charts Charts 1: K/E Land Use Distribution ......................................................................... 19 Charts 2: K/W Land Use Distribution ........................................................................ 20 Charts 3: Workers Distribution Males and Females of K West Ward, 2011 ............ 27 Charts 4: Workers Distribution Males and Females of K East Ward, 2011 .............. 28 Charts 5: Brand-wise split of occupied modern retail store space in malls ............... 64 Charts 6: Shop area-wise split of occupied modern retail store space in malls ........ 65 Charts 7: Commercial occupancy rate ..................................................................... 77 Charts 8: Occupancy rates of hotels around site ...................................................... 85

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Highest & Best Use Analysis for Andheri Micro Market

List of Abbreviations AAI- Airports Authority of India AMSL- Average Mean Sea Level BFSI- Banking, financial services and insurance BMC– Brihanmumbai Municipal Corporation CSIA- Chhatrapati Shivaji International Airport DCF- Discounted Cash Flow DCR- Development Control Regulation FSI- Floor Space Index GLA- Gross Leasable Area HIG- Low Income Group IOT- Internet of Things IPC- International Property Consultant IRR- Internal Rate of Return IT- Information Technology JVLR- Jogeshwari Vikhroli Link Road LIG- Low Income Group MCGM- Municipal Corporation of Greater Mumbai MHADA- Maharashtra Housing and Development Authority

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Highest & Best Use Analysis for Andheri Micro Market

MIAL- Mumbai International Airport MIDC- Maharashtra Industrial Development Corporation MIG- Middle Income Group MMRDA- Mumbai Metropolitan Region Development Authority MR &TP- Maharashtra Regional and Town Planning NOC- No Objection Certificate NPV- Net Present Value PCMS- Per Capita Mall Space RAI- Retail Association of India ROW- Right of Way SPA- Special Planning Authority SPEEZ- Santacruz Electronic Export Processing Zone SRA- Slum Rehabilitation Authority TDR- Transfer of Development of Rights WACC- Weighted Average Cost of Construction

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Highest & Best Use Analysis for Andheri Micro Market

Chapter 1: Introduction 1.1 Background Andheri is located in heart of Suburban Mumbai. Western railway line divides Andheri into east 24 sq. km. & west 23.5 sq. kms. Andheri falls under K ward(K-east and Kwest) which also includes parts of Vile Parle & Jogeshwari sharing ward as per BMC boundaries of Mumbai Suburban district.

Figure 1: Location of Andheri Micro Market & Gilbert Hill Source: https://portal.mcgm.gov.in/ Source:https://commons.wikimedia.org/wiki/File:Gilbert_Hill,_Andheri.jpg

Andheri got its name from a heritage site that is around 200 ft. tall & 65 million old monolith volcanic rock named Gilbert Hill. Earlier the sunlight failing on this hill would create darkness around the area and hence this area is got its name as Andheri meaning Andhar (darkness), according to (Shodh Ganga, 2018).

Traditionally Andheri is considered as a SBD (Secondary Business District) which created a hotspot for Grade A Commercial offices due to its connectivity to BKC (Commercial hub) & Industrial areas like SEEPZ, MIDC. Due to its recent metro connectivity Andheri has further surged more into commercial development which has given rise to residential development in Andheri East. Likewise Andheri West is known for its high end residential growth.

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Highest & Best Use Analysis for Andheri Micro Market

1.2 Aim ➢ To understand the Real Estate Market Dynamics of Andheri Micro Market and find out the Highest and Best Use potential for the selected property in the micro market.

1.3 Objective ➢ Analysing the micro market on various factors by conducting Market Research. ➢ By delineating the market with various delineation methods like radial method, time travel distance method or geographic boundary of the entire micro market. ➢ According to (Fanning, 2005) the six step Market Feasibility which includes: ▪

Property Productivity Analysis- define the product

▪

Market Delineation

▪

Demand Forecast Analysis

▪

Competitive supply Analysis

▪

Demand Supply Analysis

▪

Forecast subject capture

➢ According to (DUNN, 2010) to evaluate Highest And Best Use opinion by taking these four steps: ▪

Legally Permissible

▪

Physically Possible

▪

Financially Feasible

▪

Maximum Productivity

➢ By understanding the Financial Feasibility factors that affect a project according to (Björnsdóttir, 2010 ) which includes, ▪

NPV (Net Present Value)

▪

IRR (Internal Rate of Return)

▪

WACC (Weighted Average Cost of Construction)

▪

Payback Period

▪

DCF (Discounted Cash Flow)

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Highest & Best Use Analysis for Andheri Micro Market

1.4 Methodology Primary Study ➢ To conduct market research to find out the current condition of the micro market. ➢ Conduct site and micro market visits. ➢ Visit various authorities for data collection(BMC, MMRDA, CENSUS Office, Ward office, etc). ➢ Carry interviews with real estate agents, brokers, builders and developers to understand current market scenarios. ➢ Study live case studies to relate the findings with the project.

Secondary Study ➢ To study about the past and future condition of the micro market. ➢ Read and analysis research papers and journals. ➢ Census data recorded by the government. ➢ Study reports issued by International Property Consultant (IPC). ➢ Read newsletters, magazines, online articles, etc.

1.5 Scope of the project To study highest and best use for the selected site for four categories including: ➢ Residential ➢ Commercial (Office A Grade Spaces) ➢ Retail Shopping Mall ➢ Hospitality (minimum 3 star hotel)

1.6 Limitations of the study ➢ The study is limited only to geographical boundaries of the micro market. ➢ Site considered for the study is purely based on hypothesis. ➢ Any litigations on land is not considered. ➢ Accuracy of data and methods adopted for projections are based on past research, which may differ from current market dynamics.

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Highest & Best Use Analysis for Andheri Micro Market

Chapter 2: Market Delineation Report 2.1 Geography of the micro-market 2.1.1 Terrain Andheri micro market has a flat terrain. It is bounded by the Arabian Sea on the west side. It is located just above sea level having average elevation range of 10m (33ft) to 15m (49ft). The image given below shows the topography of Andheri micro market which indicates that the area falls in a flat terrain zone of a range 8 ft to maximum 100 fts in certain areas.

Figure 2: Terrain of Andheri Source: http://en-in.topographic-map.com

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Highest & Best Use Analysis for Andheri Micro Market

Figure 3: Section of Andheri Terrain Source: Google Earth Pro

2.1.2 Natural Barriers To the west of Andheri we have the Arabian Sea which restricts the growth to the western side of the micro market. To the east is the Mithi Nadi which passes through areas of Marol and Saki naka which at times makes it difficult for development permissions.

Figure 4: Natural Barriers Source: Base Map made on Wikimapia

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Highest & Best Use Analysis for Andheri Micro Market

2.1.3 Geographical extent of Assembly Constituencies in Mumbai City district

Figure 5: Geographical extent of Andheri Source: http://mcgm.gov.in

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Highest & Best Use Analysis for Andheri Micro Market

2.1.4 Land Cover

Figure 6: K/E ward Land Use plan with Legend Source: http://mcgm.gov.in, K/E – WARD EXISTING LAND USE 2012

K-east ward is surrounded by the western railways on the west, Mithi river to the east, Aarey Colony to the north and Airport (CSIA) to the south. According to existing land use plan of K-east ward we can clear see that it’s a residential developed zone with MIDC and SPEEZ zones and the airport to the south

Residential 0.57

Commercial

10.62

Office 6.03

0.49

Industrial Natural Area & Open Spaces 40.9

Educational Amenties Medical Amenities

15.37

Social Amenities Public Utilities and Facilities Transport and Communication Facilities

1.06 1.21 0.98

Urban Villages Primary Activity 2.99

5.8

3.42 8 2.57

Unclassified Vacant Land

Charts 1: K/E Land Use Distribution Source: http://mcgm.gov.in

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Highest & Best Use Analysis for Andheri Micro Market

K-west is surrounded by the western railways on the east, the Arabian Sea to west, Oshiwara bridge/nalla to the north and Milan subway to the south.

According to existing land use plan of

K-west

ward

majority

of

development is seen of residential zone. The ward also has high number of open space as compared to K-east ward.

Figure 7: K/W ward Land Use plan Source: http://mcgm.gov.in

Figure 8: K/W ward Land Use plan Residential 0.8

2.78

8.44

Commercial

2.76

Office Industrial 34.33

Natural Area & Open Spaces Educational Amenties

17.04

Medical Amenities Social Amenities Public Utilities and Facilities Transport and Communication Facilities

0.99 0.85 2.43

Urban Villages

3.08

1.28

0.61 23.33

1.28

Primary Activity Unclassified Vacant Land

Charts 2: K/W Land Use Distribution Source: http://mcgm.gov.in

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Highest & Best Use Analysis for Andheri Micro Market

2.2 Demographics 2.2.1 Population and Household base Ward Wise Population

Andheri comes in the “K” ward. It is divided into “K east” and “K west” ward. According to (Census of India, 2011) Population of “K” ward in 1961 is 3,02,908 and it has increased to 15,72,573 till 2011. For “K west” ward Population has increased from 3,96,438 to 7,48,688 during 1981 to 2011. For “K east” ward, population has increased from 5,29,244 to 8,23,885 during 1981 to 2011. It is shown in detail in the following table.

Table 1: Ward Wise Population

Year

Wards K

K/W

K/E

1961

3,02,908

-

-

1971

5,73,693

-

-

1981

9,25,682

3,96,438

5,29,244

1991

12,68,580

5,75,994

6,92,586

2001

15,10,682

7,00,680

8,10,002

2011

15,72,573

7,48,688

8,23,885

Source: Census of India, 2011

Section Wise Population

According to (Census of India, 2011), Population of Andheri is as follows: Table 2: Section Wise Population

Population

Figure 9: Mumbai District Suburban Sections

Andheri East (52)

3,93,391

Andheri West (55)

3,12,567

Source: Census of India, 2011

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Highest & Best Use Analysis for Andheri Micro Market

2.2.2 Decadal Variation in Population There has been seen an increase in decadal population in both the wards but the decadal % has decreased so a period of decades.

Table 3: Decadal Variation in Population

Year

K ward

K/E ward

K/W ward

Absolute

%

Absolute

%

Absolute

%

1961-71

2,70,785

89.4

-

-

-

-

1971-81

3,51,989

61.4

-

-

-

-

1981-91

3,42,898

37.0

1,63,342

30.9

1,79,556

45.3

1991-2001

2,42,102

19.1

1,17,416

17.0

1,24,686

21.6

2001-11

61891

4.1

13,883

1.7

48,008

6.9

Source: Census of India, 2011

2.2.3 Slum Population In K-east ward slum population is 49% and for K-west ward it is 14.5%. Out of 8,23,885 k east ward population, 4,03,716 is the total slum population. Out of 7,48,688 k west ward population, 11,08,762 is slum population, according to (Census of India, 2011).

Table 4: Slum Population

Name of Ward

Ward population 2011

Total slums population in the ward

% of slum population in the ward

K/E

8,23,885

4,03,716

49%

K/W

7,48,688

1,08,762

14.5%

Source: Census of India, 2011

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Highest & Best Use Analysis for Andheri Micro Market

2.2.4 House Hold Base According to the population present in K ward and number of households given below, Household Base = (Total Population /Total No. Of households) = 8,23,885+7,48,686)/(1,75859+1,49,161) =4.838 For calculating household base, we have used following information from (Census of India, 2011), Table 5: Population of Wards as per census 2011

Population of Wards as per census 2011 K East ward

8,23,885

K West ward

7,48,688

Source: Census of India, 2011

Table 6: No. of households

No. of households K East ward

1,75,859

K West ward

1,49,161

Source: Census of India, 2011

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Highest & Best Use Analysis for Andheri Micro Market

2.2.5 Population Growth Potential During 2001 to 2011 population growth is from 7.01 lakhs to 7.49 lakhs and is expected to grow to 7.82 lakhs in 2021 for K West Ward and similarly 8.34 lakhs for K East Ward. But we can see according to the projections, population will be decreasing till 2034 and same variation is there for K East ward as given in the following table (Draft DP Report, 2034). The reason for the decrease in population in 2034 is expected to be due to the over saturation of the market and better options in other markets of Navi Mumbai.

K West Ward Table 7: Project Population for K West Ward

Population Existing Population (In lakhs) 2001

7.01

2011

7.49 Projected Population (In lakhs)

2021

7.82

2031

7.39

2034

7.08

Source: Draft DP Report 2034

K East Ward Table 8: Project Population for K East Ward

Population Existing Population (In lakhs) 2001

8.10 `

2011

8.24 Projected Population (In lakhs)

2021

8.34

2031

7.69

2034

7.32

Source: Draft DP Report 2034

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Highest & Best Use Analysis for Andheri Micro Market

2.2.6 Ward Density According to (Census of India, 2011), density for K Ward is given as below Population of K-East Ward: 8,23,885 Population of K-East Ward: 7,48,688 Area of K/Ward: 47.50 sq.km Hence, Density of K/Ward = (8,23,885 + 7,48,688)/ 47.50 = 33107 p/sq.km 2.2.7 Sex Ratio According to (Census of India, 2011) K west ward has sex ratio of 847 in the year 2001 and it increased to 865 in 2011. There is also an increase in the sex ratio of K east ward from 837 to 870 from 2001 to 2011.

In Andheri East sex ratio was 912 in 2001 and in 2011 it was 924. Similarly Andheri West sex ratio has increased from 808 to 842 during the year 2001 to 2011.

This increase of sex ratio indicates increase of female population in the ward which is a good sign for the inclusive development of the country/ward.

Table 9: Sex Ratio of K/Ward

Sex Ratio of K/Ward Ward

2001

2011

K/W

847

865

K/E

837

870

Source: Census of India, 2011 Table 10: Sex Ratio of Andheri

Sex Ratio of Andheri Section

2001

2011

Andheri East (52)

912

924

Andheri West (55)

808

842

Source: Census of India, 2011

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Highest & Best Use Analysis for Andheri Micro Market

Table 11: Population and Sex Ratio in age group of 0 to 6 years

Section

Total Population in age group of 0 to 6 years

Sex Ratio

Person

Males

Females

Andheri East (52)

29,013

15,085

13,928

923

Andheri West (55)

36,502

18,921

17,581

929

Source: Census of India, 2011

2.2.8 Literacy Rate Literacy rate is the total number of educated people in given age group expressed in percentage. There is also a term called youth literacy rate which will be given in between 15 to 24 years age group according to (Census of India, 2011).

Table 12: Literacy Rate of K ward

Rank

Name of Ward

Percentage of Literates Person

Males

Females

3rd

K/E

91.6

94.7

88.1

10th

K/W

89.7

92.0

87.4

Source: Census of India, 2011 Table 13: Index of Relative Literacy of K Ward

Name of Ward

Index of Relative Literacy

Percentage change

2001

2011

K/E

743

805

8.3

K/W

764

817

6.9

Source: Census of India, 2011

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Highest & Best Use Analysis for Andheri Micro Market

2.2.9 Work Participation Rate Table 14: Work Participation Rate of K Ward

Name of Ward

Work Participation Rates (%) Males

Females

2001

2011

2001

2011

K/W

57.5

59.7

16.3

21.3

K/E

56.3

59.9

14.3

19.8

Source: Census of India, 2011

K West Ward

The table above shows that there is an increase in male as well as female work participation . The chart below shows the total number of main workers, non-workers and marginal workers for both males and females for 2011 of K West ward according to (Census of India, 2011).

Males

Females 19

40.3

2.3

57.1

78.7

2.6

Main Workers

Main Workers

Marginal Workers

Marginal Workers

Non Workers

Non Workers

Charts 3: Workers Distribution Males and Females of K West Ward, 2011 Source: Census of India, 2011

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Highest & Best Use Analysis for Andheri Micro Market

K East Ward

There is an increase in male and female work participation in the version decade. The chart below shows the total number of main workers, non-workers and marginal workers for both males and females for 2011 of K East ward according to (Census of India, 2011).

Females

Males

18

1.8

40.1

57.3

80.2

2.6 Main Workers

Main Workers

Marginal Workers

Marginal Workers

Non Workers

Non Workers

Charts 4: Workers Distribution Males and Females of K East Ward, 2011 Source: Census of India, 2011

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Highest & Best Use Analysis for Andheri Micro Market

2.3 Historic Growth Year: 2000 In the 2000s, Andheri west was a high end residential complex including luxurious projects in lokandwala area and around it. Andheri east was predominately an industrial area including SPEEZ and MIDC along with stable increase in commercial development.

Figure 10: Andheri in 2000 Source: Base Map made in Wikimapia

Year: 2005 In 2005, the market was going still without any major changes observed from the various decade. Due to the boom in IT sector many commercial developments established in the eastern part of Andheri adjacent to Andheri-Kurla road.

Figure 11: Andheri in 2005 Source: Base Map made in Wikimapia

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Highest & Best Use Analysis for Andheri Micro Market

Year: 2010 During 2010 major changes in Andheri micro market was observed due to the expansion of International Airport and development of Terminal 2 which who connect the western express highway with the new International Airport (CSIA).

Figure 12: Andheri in 2010 Source: Base Map made in Wikimapia

Year: 2018 At present majoring of growth is observed in the eastern part of the micro market due to presences of Metro line 1 connecting Versova to Ghatkopar, New International Airport(CSIA). Also as the market is well connected to other parts of the city along with less rent/sale for commercial and residential development, there is substantial growth in the eastern part of Andheri as compared to west.

Figure 13: Andheri in 2018 Source: Base Map made in Wikimapia

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Highest & Best Use Analysis for Andheri Micro Market

2.4 Regional Linkage 2.4.1 Present Linkages In fig. 13 given below, we can see the linkages present in the micro market.

Present Major Road Linkages

➢ Western Express Highway (WEH- NH 48) ➢ SV Road (Sardar Valla Bhai Patel Road) which connects all the railway stations in Mumbai ➢ Link Road ➢ JVLR (Jogeshwari Vikhroli Link Road) ➢ Andheri-Kurla Road ➢ Sahar Elevated road which connects the International airport to the Western Express Highway ➢ Mahakali caves road connecting JVLR to Andheri Kurla road Present Railways and Metro Linkages

➢ The western railway divides Andheri into Andheri East and Andheri West ➢ Metro line 1 passes East to West connecting Ghatkopar to Versova

Figure 14: Present Regional Linkages Source: Base Map made on Wikimapia

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Highest & Best Use Analysis for Andheri Micro Market

2.4.2 Future Linkages In fig. 14 given below we can see the upcoming linkages, which includes: ➢ Metro line 3 from Colaba to Bandra to SEEPZ ➢ Metro line 7 from Dahisar east to Andheri East ➢ Metro line 2 from Dahisar west to Mandale ➢ Metro line 2 is again divided in 2A and 2B. Metro line 2A will be connecting Dahisar East to DN Nagar and 2B will be connecting DN Nagar to Mandale.

Figure 15: Proposed Regional Linkages Source: Base Map made on Wikimapia

These future infrastructural developments will further improve the connectivity of Andheri micro market making is a prime place for investment now.

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Highest & Best Use Analysis for Andheri Micro Market

2.5 Economy

Figure 16: Economic Drivers in Andheri Micro Market Source: Base Map made on Wikimapia

2.5.1 Economy of Andheri East An important business district of Mumbai- Andheri East is a house of several MNC’s and other commercial establishments, in areas like Saki Naka, MIDC and SEEPZ due to its good connectivity with different parts of the city. Office rents in Andheri East are much cheaper than Nariman point and BKC. Major occupants in this area are located close to Andheri-Kurla road which is well connected to metro line 1.

Leasing activities increased on this market by 38% for Q2 2018 according to (Colliers International Research, 2018). Also latest trends in commercial like co working spaces has caught pace in this market. We Work has leased an entire building of 2 lakh sq. ft. office space in Raheja Platinum in Andheri East (Babar, 2018).

Andheri East also generates major of its economy of its industrial zones of MIDC and SPEEZ. Export of goods and services leads to employment generation. Investment from domestic and foreign sources has boosted the economy of the market.

International airport also plays an important role in generating economy to the market along with major 5 star hotels making business around the area.

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Highest & Best Use Analysis for Andheri Micro Market

2.5.2 Economy of Andheri West Andheri west has good social infrastructure development. There are luxury and ultraluxury apartments in many localities of the micro market. These localities includes JVPD, Lokhandwala Complex and Versova which has seen rampant redevelopment of housing societies.

Out of 23.5 sq. km. development in Andheri West, 8.25 sq. km. is purely residential development. This market has the highest number of buildings- 31,471, which in turn generates a huge amount of property tax as per times of India report (Bharucha, 2017).

Andheri west has witnessed high amount of growth in construction because of TDR (Transfer of Development of Rights) obtained through slum redevelopment. Andheri west alone generates about Rs 434 Cr. of revenue from property taxes for the fiscal year of 16-17. Totally K ward generates about Rs 861 Cr. from property tax, according to (Bharucha, 2017). Other sources of income for the micro market includes:

Figure 17: Secondary Income sources for Andheri micro market Source: Primary Survey

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Highest & Best Use Analysis for Andheri Micro Market

2.6 Site Selection 2.6.1 Site Justification ➢ Site is selected in the heart of the micro market which includes the International airport, metro line 1, 5 star hotel and many commercial grade A offices within 1.5 km radius from the site. ➢ Future growth will further boost the development in this area which includes metro line 3 (Colaba-Bandra-SPEEZ), many commercial and hospitality development and good connectivity to various parts of the city. ➢ This area will help us study all four sectors of feasibility as it’s the heart of the micro market 2.6.2 Site Attributes ➢ The selected site is 10 Acres (435600 sq. ft.) in area which is abutted by road on one side(east side) and has a new road developed which will connect the airport directly to Andheri-Kurla Road. ➢ The owner of the plot is AAI (Airport Authority of India) and it has appointed MMRDA as the SPA for future development of the site. ➢ Currently the site is under development for Oberoi flight canteen and has a cement mixture plant which supplies cement for construction of metro station.

Figure 18: Site Location Source: Google Earth Pro

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Highest & Best Use Analysis for Andheri Micro Market

2.7 Development Plan & Municipal/Urban Development Authorities Andheri falls in the western suburbs of Mumbai and is divided into two wards namely K-east and K-west. The selected site is present in K-east ward near to the airport.

Figure 19: Ward Map Source: https://portal.mcgm.gov.in

2.7.1 Development Plan 2034 According to Greater Mumbai Development Plan, 2034, the selected site falls under a SPA (Special Planning Authority). The SPA for CSIANA (Chhatrapati Shivaji International Airport Notified Area) is MMRDA (Mumbai Metropolitan Region Development Authority) and hence development by laws of MMRDA will be considered. Following are few other development authorities in Andheri: ➢ MCGM- Municipal Corporation of Greater Mumbai ➢ SRA- Slum Rehabilitation Authority ➢ MHADA- Maharashtra Housing and Development Authority ➢ MIDC- Maharashtra Industrial Development Corporation ➢ SEEPZ- Santacruz Electronic Export Processing Zone

➢ AAI- Airports Authority of India

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Highest & Best Use Analysis for Andheri Micro Market

Figure 20: Development Plan 2034 Source: https://portal.mcgm.gov.in

37

Highest & Best Use Analysis for Andheri Micro Market

2.7.2 Development Authority for the site The SPA for CSIANA in Andheri is MMRDA. According to (Mumbai(Chhatrapati Shivaji) International Airport Notified Area (CSIANA), 2009) “Government by its Notification dated 14th May 2009 has appointed Mumbai Metropolitan Region Development Authority (MMRDA) as a Special Planning Authority for Mumbai International Airport Notified Area (CSIANA)�.

As a SPA, MMRDA has prepared the Development Plan for the CSIANA as per the provisions of Maharashtra Regional and Town Planning Act, 1966 (MR&TP Act, 1966).

Figure 21: MMRDA Development Plan Source: https://mmrda.maharashtra.gov.in/mumbai-chhatrapati-shivaji-international-airport-notified-area-csiana-#

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Highest & Best Use Analysis for Andheri Micro Market

2.8 Development Control Regulation Following rules are obtained from MMRDA DCR. Residential use is not permitted in this zone.

Reg. 23- Recreational Amenities/ Open Spaces Table 15: RG Permissible

SR.NO

PLOT AREA

OPEN SPACE PROVISION

1

1001 to 2500sq.mt

10%

2

2501 to 10000sqmt

15%

3

Above 10,000 sq.mt

20%

Note: Deductible RG to be taken is 15% max Source: MMRDA DCR

Reg. 32- FSI Permissible

➢ Non - Aeronautical Zone: Global FSI 1 ➢ Aeronautical & Non - Aeronautical Zone 1(commercial): 4 Reg. 38(2)- Height of the Building

➢ Flat roof: 2.75mts minimum & 3.9mts maximum ➢ Assembly hall, residential hotels of 3 star, institution, departmental stores, etc: 3.6mts minimum & 4.2mts maximum ➢ Convention centre, auditorium, cinema theatre, exhibition hall, sports arena: 3.6mts minimum & 12.0mts maximum

➢ Cargo warehouses, sheds: 4.0mts minimum & maximum as required Reg. 38(9)- Basement

➢ Area of the basement may exceed twice the plinth area of the building ➢ In Mumbai 3 basements is allowed(up to 10m total depth) ➢ Height & slope of ramp o Slope of ramp: 1:10 for vehicles

o Clear height: 2.4mts required minimum

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Highest & Best Use Analysis for Andheri Micro Market

2.9 Infrastructure Development The figure below shows all the Infrastructural developments present in Andheri micro market on basis of physical, social, environment and digital infrastructure.

Figure 22: Infrastructural Developments in Andheri Source: Base Map made on Wikimapia

Physical Infrastructure Andheri has a good physical infrastructure comprising of railway station that connects western, central & harbour lines of Mumbai & Navi Mumbai respectively. Andheri metro line 1 (Versova to Ghatkopar), Chhatrapati Shivaji International Airport (CSIA), the major roads linkages including western express highway, SV road, Link road, Andheri-Kurla road, JVLR, etc. and sky walks along with flyover bridges are the present physical infrastructure observed in the micro market.

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Highest & Best Use Analysis for Andheri Micro Market

Figure 23: Physical Infrastructure in Andheri Source: FINANCIALEXPRESS.COM

Social Infrastructure Social Infrastructure in Andheri comprises of Hospitals, Andheri court, Sports complex Schools & Colleges. There are 41 Municipal schools in K ward along with 108 primary and secondary schools.

Table 16: Number of schools in K ward

Wards

Municipal Schools

Primary & Secondary schools

K- east

25

52

K- west

16

56

K- ward total

41

108

Source: Draft DP Report, 2034.

Table 17: Number of Hospitals, Dispensaries, Maternity homes in K ward

Wards

Hospitals

Dispensaries

Maternity homes

K- east

4

8

6

K- west

-

15

-

K- ward total

4

23

6

Source: Draft DP Report, 2034

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Highest & Best Use Analysis for Andheri Micro Market

.

Figure 24: Social Infrastructure in Andheri Source: MUMBAIMAG

Environmental Infrastructure Environmental Infrastructure includes Marol pipelines that provides water supply to nearby areas of Andheri & solid waste compost plant at Chakala.

Figure 25: Environmental Infrastructure of Andheri Source: MUMBAIMAG

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Highest & Best Use Analysis for Andheri Micro Market

Digital Infrastructure Digital infrastructures include telecom towers, security cameras & Wi-Fi at Andheri railway station.

Figure 26: Digital Infrastructure of Andheri Source: Mumbai Mirror Article

43

Highest & Best Use Analysis for Andheri Micro Market

2.10 Urban Fabric 2.10.1 Andheri East Andheri East has grown as a fast paced developing micro market due to its location, current infrastural developments and mainly due to good connectivity to major parts of the city. It includes a vide range of sectors including industries like SPEEZ and MIDC, commercial office complexes mainly on the Andheri-Kurla road, 5 star hotels near the airport with many 3 star hotels near by. Due to the growth of metro corridor 1 and the upcoming metro phases which passes through Andheri, it has become a good place to invest as it also has lower sale and rent rates for all sectors.

5

8

2

6 4

1

3 7

Figure 27: Urban Fabric of Andheri East Source: Base Map made on Wikimapia

1

2

3

4

5

6

7

8

Source: Google Images

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Highest & Best Use Analysis for Andheri Micro Market

2.10.2 Andheri West Andheri West is traditionally known for its high end residential developments with entertainment and recreational zones including malls, shopping streets, night liferestaurants & bars, film studios, gymkhana and a sports complex. It is also the house of many educational schools and colleges with high number of coaching classes observed near the railway station. It’s a destination home for many film stars and tv actors as the localities are close to Juhu and Goregaon film city. Development of metro line 1 and future phases has boosted the growth in the micro market. Majority of the crowd in this area are HIG crowd as their annual income is above 10 lacs a year, which makes it a high end market with luxurious residential development product mix.

1

6

5

2

Figure 28: Urban Fabric of Andheri West Source: Base Map made on Wikimapia

1

2

3

4

5

6

7

8

Source: Google Images

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Highest & Best Use Analysis for Andheri Micro Market

2.11 Traffic & Transportation 2.11.1 Aim To calculate volume of vehicles nearby to our site & to major connected roads.

2.11.2 Methodology According to (Ministry of Works and Transport, Gaborone, Botswana, 2004), there are two methods for Traffic Analysis i.e. Manual method & Automatic method. Manual method has further three ways for analysis i.e. first way is to analyse traffic volume in a day, second analysis is done for a week & third for a month. So we did traffic survey analysis for a day with the help of an application named “Traffic Survey�. This app counts the number of vehicles passing by our desired site road by just manual tapping of each number of vehicles passing by. This application also bifurcates the types of vehicles passing through the road such as cars, two-wheelers, heavy commercial vehicles, light commercial vehicles, etc.

Figure 29: Manual Method done with Traffic Survey app Source: Traffic Survey App

2.11.3 Manual Method We did Traffic survey with an interval of 5 min. on the road opposite to our site & also opposite to rear part of the CSIA Airport. We considered Monday as our survey day because majority of employees work on Monday, so traffic quantum will be more accurate on this day & the time factor we considered for the survey was afternoon

46

Highest & Best Use Analysis for Andheri Micro Market

04:30 pm & evening 07:30 pm, so as to analyse traffic volume at two different situations.

Result from Manual method

The Traffic volume at 04:30 pm was majority of autorickshaws followed by cars & two wheelers. Out of the total volume of cars, many of them were private taxis & cabs because there is international airport & metro station nearby. The traffic volume at 07:30 pm went at a peak level & the quantum of vehicles were doubled from 3 hrs prior volume of 04:30 pm.

Table 18: Manual Survey done at 4.30 pm

Traffic at 4.30 pm

Vehicles at 5 min. intervals

Pedestrians

Car

Bike

Auto

Bus

Truck

Site Road

57

61

68

6

11

Mostly Metro Pedestrians 12

Opp. Site Road

60

49

51

3

1

8

Opp. Road to Airport

24

22

26

7

3

3

Table 19: Manual Survey done at 7.30 pm

Traffic at 7.30 pm

Vehicles at 5 min. intervals

Pedestrians

Car

Bike

Auto

Bus

Truck

Site Road Opp. Site Road

89 73

92 59

103 63

11 8

8 4

Mostly Metro Pedestrians 18 13

Opp. Road to Airport

29

44

67

16

3

7

Source: Traffic Survey App

Pedestrians counting was also done by the Traffic Survey app. The survey results say a very less number of pedestrians passing through our site road in 5 min. interval survey. The reason behind this is because of no residential & retail activity nearby to airport. But this number of pedestrians gradually increases as we move towards evening because of employees reaching by walk towards Airport road metro station.

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Highest & Best Use Analysis for Andheri Micro Market

2.11.4 Automatic Method According to (Ministry of Works and Transport, Gaborone, Botswana, 2004), this method is basically done with traffic detectors & sensors to get the accurate traffic data. We related it to google maps. We considered the same day i.e. Monday for analysis of traffic on google maps.

Result from Automatic method

At 8 am the traffic volume was quite less but as we gradually move with time further by 12 pm & 4 pm, the traffic volume increases quantitatively. Now at 8 pm the traffic reaches at its peak level because of maximum offices leave after 6 pm.

Figure 30: Automatic Method Traffic Analysis done at 4.30 & 7.30 pm Source: Google Maps

2.11.5 Conclusion Both the methods has given similar result of traffic survey to accurately analyse the volume of vehicles passing through & around the site. It was noticed that peak traffic hours was during 7 to 9 pm as maximum office crowd left at 6 pm. Also airport traffic flow was more during this time period.

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Highest & Best Use Analysis for Andheri Micro Market

2.12 Future Growth potential of the area 2.12.1 Infrastructure, Upcoming Projects & Existing Natural Barriers

Figure 31: Infrastructure, Upcoming Projects & Existing Natural Barriers around the site Source: Base Map made in Wikimapia

2.12.2 Future growth around the site as per Development Plans

Figure 32: Future Growth around the site as per MMRDA DP,2034 Source: MMRDA DP, 2034

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Highest & Best Use Analysis for Andheri Micro Market

From the above Figure 32, we can tell that majority of commercial development is going to take place around the site which includes hotel, offices and retail spaces.

Figure 33: Future Growth around the site as per MCGM DP,2034 Source: https://portal.mcgm.gov.in/irj/portal/anonymous/qlddevplan

From the above Figure 33, as per MCGM DP, 2034 we can say that leaving the SPA area major of residential and commercial development is boosting due to growth direction and less rates as compared to Andheri west.

2.12.3 FSI Permissible As per 1991 DCR- Development Control Regulations and modifications of 2012 along with MMRDA DCR, following are the FSI calculations as per Reg. no. 32 and 33(5) Table 20: FSI Calculations as per 1991 DCR & MMRDA DCR

Particular Permissible FSI Area of the Plot R.G. Deduction (15%) Net Plot Area Net Built Up Area Fungible FSI Fungible FSI Area Total Buildable Area

Area (in sq. ft) 4 4,35,600 (10 acres) 65,340 3,70,260 14,81,040 0.15 2,22,156 17,03,196

Source: Mumbai DCR 1991 & MMRDA DCR Note: TDR is not applicable in MMRDA rules.

Maximum permissible height- 27 to 41 meters (permission from AAI and MIAL)

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Highest & Best Use Analysis for Andheri Micro Market

2.13 SWOT Analysis According to (Anon., 2015), report and primary survey done by the team following is the SWOT analysis for Andheri micro market.

2.13.1 Andheri East Strengths

Andheri east has an excellent connectivity through road, rail and metro. Versova to Ghatkopar is the current running metro line which connects both sides of the micro market. BKC and SEEPZ are easily accessible from this micro market. Better quality of social and physical infrastructure is present. In case of Andheri east, property price and rentals are much lower than the property prices in Andheri west which makes it a better place of investment.

Weakness

Slum is a very big part of Andheri East. It is present in various pockets and it is affecting the attractiveness of the micro market. Civic issues are occurring in the Andheri east due to bad street lighting, bad roads, traffic congestion as per.

Opportunities

With growth in the infrastructure there is also realty growth. There are so many slum pockets in Andheri east and development nearby these slum pockets will be a great attraction for the buyers and developers. Luxury and affordable housing demand is growing there due growth in infrastructure, better connectivity, low price rate, etc. which also shows the growth direction of the market.

Threats

Slum development is very slow in the Andheri east which disturbs the attractiveness very badly. There will be an effect on future growth development due to the limited availability of land.

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Highest & Best Use Analysis for Andheri Micro Market

2.13.2 Andheri West Strengths

There is high rental demand for sales. It is convenient to reach business places such as BKC and SEEPZ from Andheri west. There is good residential area due to good infrastructure. Lokhandwala complex can be a good example.

Opportunities

Mumbai metro is the good example for growth in infrastructure and it will be an opportunity for people in Andheri in many ways. In Andheri west there is a growth in luxury and ultraluxury projects and this is a great opportunity for builders and developers.

Weakness

Very high rents and high prices of the properties in Andheri west.

Threats

Limitation to available land in Andheri east. This is the threat to the development.

Demand for affordable housing is increasing and prices are increasing as demand is increasing

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Highest & Best Use Analysis for Andheri Micro Market

2.14 Socio Economic classification (Income groups) According to (Nagargoje, 2018) the socio economic classification of a micro market includes the following study factors: ➢ Location ➢ Condition and age of the building ➢ Population Density ➢ Land Value ➢ Sale and Rent Value ➢ Standard of living ➢ Type of vehicles owned ➢ Amenities and facilities

Figure 34: Price couture of Andheri Source: Magic bricks

53

Highest & Best Use Analysis for Andheri Micro Market

According to (KnightFrank, 2015), the income groups of Andheri-Borivali micro market are as follows: Table 21: Income Group of Andheri

Income Groups

27% 44%

16% 13%

Below 3 lakhs

3.01 lakhs to 5 lakhs

5.01 lakhs to 10 lakhs

Above 10 lakhs

Source: Knight Frank Research, Indicus Analytics

From the above data and primary study of the market based on various factors as per (Nagargoje, 2018), we can say that Andheri west have majority HIG & MIG residents were as Andheri East has major of LIG & MIG crowd due to presence of slums and industries as compared high end residential, retail and office development in west.

Figure 35: Income Group Distribution Source: Base Map made in Wikimapia

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Highest & Best Use Analysis for Andheri Micro Market

2.15 Site Characteristics 2.15.1 Parking Spaces around the site In the below Figure 36, we noticed that within 500 mt. of the site there is parking space available for buses, cars and two wheelers. As the site is close to CSIA, many taxi and auto stands were observed within 500 mts of radius from the site.

1,2

3

4

1

2

3

4

Figure 36: Parking Spaces around site Source: Photo Credit- Karan Rego

55

Highest & Best Use Analysis for Andheri Micro Market

2.15.2 Visibility of site from street The site is covered by AAI & MMRDA as there is development of Oberoi flight kitchen and 18.0 mt. wide road currently going on.

Figure 37: Visibility of site from street Source: Photo Credit- Karan Rego

2.15.3 Historic growth of site The selected site was a barren land in late 2000s, and as time passed many developments around it took place. Currently in 2018, the site in under construction for development of Oberoi flight kitchen and has a cement production plants used for construction of metro line 3.

Figure 38: Historic Growth of site Source: Google Earth Pro

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Highest & Best Use Analysis for Andheri Micro Market

Chapter 3: Feasibility Report 3.1 Property Productivity Analysis 3.1.1 Physical Attribute Physical characteristics of the site was distributed on the following basis which includes area and shape of the plot, soil and ground conditions, topography of the plot, and access to the site according to ( McGraw-Hill Dictionary of Architecture and Construction, 2003).

Area and Shape of the Plot

Area of the plot: 10 Acres approx. (435600 sq. ft.)

Shape of the Plot: Irregular Polygon

Figure 39: Area and Shape of the Plot selected Source: Made on Google Earth Pro

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Highest & Best Use Analysis for Andheri Micro Market

Soil Conditions and Topography of the Plot

Soil: Deep back and reddish soil (red mud) Topography of the site: Flat terrain, 1 m above road level

Figure 40: Section of Plot selected Source: Made on Google Earth Pro

Access to the site

According to MMRDA DP Plan, the selected site is covered with roads on 3 sides of the plot, which includes ➢ 33.5 mts Right of Way (ROW)International Airport road to the eastern side of the plot ➢ 18.00mts ROW- New proposed road on the northern side ➢ 12.50mts ROW- Present on the western side of the plot Figure 41: Access to site as per MMRDA DP, 2034 Source: MMRDA DP, 2034

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Highest & Best Use Analysis for Andheri Micro Market

3.1.2 Legal Attribute The selected site falls under Airport Authority of India (AAI), and hence has a high restriction factor. MIAL- Mumbai International Airport Ltd. And AAI approves a height of above 28 to 41 mts AMSL (Average Mean Sea Level) for which a NOC(No Objection Certificate) is required before development.

Figure 42: Civil Aviation Plan for Andheri with legend Source: CCZM_MUMBAI_NAVI_MUMBAI

3.1.3 Location Attribute Site is adjacent to Mumbai International Airport (CSIA). It is very close to existing metro line 1 Versova to Ghatkopar and upcoming metro line 3 connecting Colaba to Bandra to SPEEZ. Many 5 star hostel brands like ITC Maratha, JW Marriot, Hayat, Lella, Lalit, Ambassador etc. were observed across 1.5 Km. radius from the site.

Western Express Highway is about 15 to 20 mins max. drive from the selected site.

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Highest & Best Use Analysis for Andheri Micro Market

3.2 Market Delineation 3.2.1 Time Travel Distance Method In time travel distance method we consider the time taken to travel from the site by various road till the decided time taken for primary and secondary catchment area. For this study we were asked to take 30 mins and 45 mins respectively to find out the primary and secondary catchment areas. But it was noticed that within 30 mins from site we could exit the micro market. Hence entire micro market is consider for the study.

The below Figure 43, was generated from ArchGIS showing 15 mins and 30 mins primary and secondary catchment area which indicates that within 30 we exit the micro market.

Figure 43: Time Travel Distance Method made on ArchGIS Source: Made on ArchGIS

For the study of income group for retail demand estimation we considered 10 mins and 20 mins respectively for primary and secondary catchment areas.

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Highest & Best Use Analysis for Andheri Micro Market

3.2.2 Geographical Boundary Andheri is located K-east and K-west ward which is about 47.5 sq. km. in area. For the study the primary catchment area to be consider as per time distance method is 30 mins and 45 mins for secondary catchment area. But within 30 mins from the site we reach out of the micro market boundary, hence the entire micro market is consider for the study.

Figure 44: Geographical Boundary of Andheri Source: Base Map made on Wikimapia

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Highest & Best Use Analysis for Andheri Micro Market

3.3. Retail (Shopping Mall) 3.3.1 Indian Retail Market Overview According to (India Brand Equity Foundation, 2018) ➢ There is a boom in expenditure pattern of costumers due to rising income and demand for quality products. ➢ Total consumption expenditure is expected to reach 3,600 US$ billion by 2020 from 1,824 billion US$ in 2017. ➢ Retail market is projected to grow from US$ 795 billion in 2017 to US$ 1,200 billion in 2021F.

➢ The total market size of Indian retail industry reached an estimated US$ 795 billion in 2017. It is forecasted to increase to US$ 1,200 billion by 2021 and 1,750 billion by 2026 . ➢ India will become a favourable market for fashion retailers on the back of a large young adult consumer base, increasing disposable incomes and relaxed FDI norms.

Figure 45: Consumer Expenditure in India & Market Size Source: India Brand Equity Foundation- Retail Report 2018

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Highest & Best Use Analysis for Andheri Micro Market

3.3.2 Retail Development & Trends in Andheri Micro Market With a share of 24 per cent Andheri – Borivali zone is the largest market in the MMR. According to (KnightFrank, 2015) report Think India Think retail, 2015, following are the trends observed in Andheri micro market ➢ The zone has a retail density of 1000 sq. ft. to 1000 population including malls as well as shopping streets. ➢ 63 per cent increase in brick and mortar modern retail spending. ➢ As almost all product categories are present in Andheri there is a scope of new brands to experiment with new products and product mixes by taking value space in the market.

Figure 46: Retail Developments in Andheri Source: Base Map made on Wikimapia

As observed in the above illustration, majority of retail development in present in Andheri West which indeed creates demand in the eastern part of the micro market.

Also as observed in the demographic study above, there is an increase in population in residential sector of Andheri East, which will lead to need of retail development close to it.

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Highest & Best Use Analysis for Andheri Micro Market

3.3.3 Consumer Profile- Product Category Split According to (KnightFrank, 2015) report Think India Think retail, 2015, majority of product mix is found in this zone. Out of the 23 product categories, maximum consumption is found in entertainment zone mainly due to high use of multiplexes followed by F&B and Apparels respectively.

1. Department stores 2. Apparel 3. F&B 4. Entertainment- Highest 5. Home & Lifestyle 6. Hyper/supermarkets 7. Electronics 8. Watches & Jewellery 9. Personal Cares 10. Footwears 11. Sportswear- Lowest 12. Books, gift & Music 13. Accessories- Lowest Figure 47: Consumer Profile- Product Category Split Source: KNIGHT FRANK Research, Think India Think Retail 2015

3.3.4 Brand-wise split of occupied modern retail store space in malls

Andheri - Borivali

16

56

Island City Peripheral Western Suburbs

40 9

Central Suburbs

48

4

39 4

68

13

66 20% National

1 6

55

22

0% Foregin

25

53

29

Thane & Peripheral Central Suburbs Navi Mumbai

4

40% Regional

3 6 4

60% Local

12

80%

17 100%

Charts 5: Brand-wise split of occupied modern retail store space in malls Source: KNIGHT FRANK Research, THINK India Think Retail 2015

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Highest & Best Use Analysis for Andheri Micro Market

The graph above shows about the distribution of different brands among different micro markets. The brands are differentiated on the basis of foreign, national, regional and local levels. As the case study revolves around Andheri micro market it was observed that, 16% brands are Foreign brands, 56% national brands which is the highest percentages than any other brand, 4% and 25% are regional and local brands respectively according to (KnightFrank, 2015).

3.3.5 Shop area-wise split of occupied modern retail store space in malls The graph below shows the area wise split of shops in sq. ft. in different micro markets.

It was noticed that 58% of shops in Andheri-Borivali zone has carpet area in the range of 0-500 sq. ft. followed by 19% of shops having carpet area of 500-1000 sq. ft. according to (KnightFrank, 2015).

100% 90%

10 2

80%

15

13

11

11

10

4

7

5

7

10

14 18

31

34

14

8

70% 60%

7 3

25

19

25

50% 33

40% 30% 20%

58 42

39

58

43 25

10% 0% Navi Mumbai

0-500

Thane & Peripheral Central Suburbs 500-1000

Central Suburbs

1000-2000

Peripheral Western Suburbs

2000-3000

Island City

Andheri Borivali

Above 3000

Charts 6: Shop area-wise split of occupied modern retail store space in malls Source: KNIGHT FRANK Research, Think India Think Retail 2015

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Highest & Best Use Analysis for Andheri Micro Market

3.3.6 Growth Drivers According to (India Brand Equity Foundation, 2018) following are the major growth drivers for retail sector in India

Brand conscious

Change in consumer mindset

Increasing demographics

Demand for good quality product

Rise in income and purchasing power

Figure 48: Growth Drivers Source: KNIGHT FRANK Research, Think India Think Retail 2015

3.3.7 Retail Lease-Rent Price According to (Cushman & Wakefeild, 2018), Mumbai retail market and the primary survey done by the team following are the rent for retail shop in a mall per sq. ft.

Table 22: Prime Retail Rent Rates in Malls

Prime Retail Rent Rates in Malls Rent in INR Micro Market Q-O-Q in % per sq. ft.

Link Road (Andheri west) 410 2.5

Y-O-Y in % 2.5

Lower Parel

880

0.0

4.8

Malad

470

0.0

0.0

Goregaon

490

0.0

4.3

Kandivali

200

0.0

0.0

Kurla

180

0.0

-5.3

Ghatkopar

260

0.0

-13.3

Vashi

350

0.0

0.0

Thane

280

0.0

3.7

Source: Cushman & Wakefield, 2018 & Primary Survey

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Highest & Best Use Analysis for Andheri Micro Market

3.3.8 Retail Market Delineation For retail study the primary and secondary catchment area was made on ArchGIS and with Business Analyst plugin taking 10 mins and 20 mins as primary and secondary catchment area respectively. The report for the same details was generated by esri.

Figure 49: Retail Market Delineation- Time Travel Distance Method Source: Made on ArchGIS

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Highest & Best Use Analysis for Andheri Micro Market

3.3.9 Spending Pattern in the micro market

Source: Made on ArchGIS

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Highest & Best Use Analysis for Andheri Micro Market

Source: Made on ArchGIS

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Highest & Best Use Analysis for Andheri Micro Market

Source: Made on ArchGIS

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Highest & Best Use Analysis for Andheri Micro Market

3.3.10 Demand Estimation Demand for retail can be obtained by looking at the latest retail trends in the market and at the demand growth drives, as mentioned above in Figure 50.

The major demand driver for retail industry can be obtained by finding out the Market Potential Index, according to (Jones Lang Lasalle, 2014) which are mentioned as follows: ➢ Demographic Growth: Increase in population, increase in migrated population and age(young crowd) and education of the people using the mall. ➢ Income & Expenditure: The HIG households having earning equal or more than 5 lakhs per annum are considered as target group. ➢ Social & Cultural: Consumerism and Expose to media and advertisements increase the exposure of people, helping in consuming the facility.

According to (Jones Lang Lasalle, 2014) report, there has been seen an increase in sizes of malls in top 7 cities of India. The graph below indicates that the demand of retail space in India has increased and so as the sizes of the mall space. The average area for a Superior Grade malls in India is about 4,80,000 sq. ft. and for average grade and poor grade is 2,10,000 sq. ft. and 1,65,000 sq. ft respectively. This show that nowadays people consider malls as a one stop destination where all the basic needs of shopping, food and entertainment is found.

Figure 50: Average Size of Malls Source: Global Insight, Real Estate Intelligence Service 4Q13 (JLL)

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Highest & Best Use Analysis for Andheri Micro Market

According to (Census of India, 2011), total population of Andheri is 7,05,958 Table 23: Population of Andheri

Population Andheri East (52)

3,93,391

Andheri West (55)

3,12,567

Source: Census of India, 2011.

To find demand of retail we need to know the PCMS i.e. Per Capita Mall Space. The PCMS for India is generally considered as 1.2 sq. ft per person, but it can vary from 1 to 1.5 depending on the per capita income of that area. For this analysis we have considered, 1.5 sq. ft per person as PCMS, according to (Nagargoje, 2014) & (KnightFrank, 2015).

Figure 51: Per Capita Mall Space Source: Global Insight, Real Estate Intelligence Service 4Q13 (JLL)

Total Retail Demand ➢ = Population X Per Capita Mall Space ➢ = 705958 X 1.50 ➢ = 10,58,937 sq. ft.

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Highest & Best Use Analysis for Andheri Micro Market

3.3.11 Supply Analysis Following are the currents malls functional in the micro market with their Gross Leasable Area (GLA), according to (Ramesh, 2013) report of Mall Management in India.

Table 24: Current Malls in Andheri with its GLA

Current Malls in Andheri Micro market Name of the Mall

Gross Leasable Area (GLA)

Infinity Mall

2,11,000 sq. ft.

Citi Mall

1,25,000 sq. ft.

Fun Republic

1,25,000 sq. ft.

Crystal Point Mall

1,25,000 sq. ft.

Mega Mall

1,25,000 sq. ft.

G7 Mall

1,25,000 sq. ft.

Total Supply

8,36,000 sq. ft.

Note : Not all the above malls are not fully functional but are being used for certain purpose, Primary Study.

3.3.12 Demand Supply Analysis From the demand and supply analysis done above we can see that there is a gap of 2,22,937 sq. ft. of demand for retail space in the micro market. This is due to the vacancy rate of 14% in retail market according to (Cushman & Wakefeild, 2018) report.

Gap= Demand – Supply = 10,58,937 - 8,36,000 = 2,22,937 sq. ft.

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Highest & Best Use Analysis for Andheri Micro Market

3.4 Commercial (Grade A office space) 3.4.1 Commercial Development & Trends in Andheri Micro Market Commercial Developments In Andheri

According to Primary Survey, Andheri has approximately 168 commercial office buildings majorly in east & somewhat in west. Out of these office buildings majority are Grade A commercials.

As per (Colliers International Research, 2018), out of 120 million sq. ft. total commercial market stretch in Mumbai, currently there is 3.7 million sq. ft. gross absorption & around major 38% is absorbed in Andheri & 14% in BKC. The demanding Sector is Co-working spaces absorbing 20%,16% BFSI followed by IT sector.

As per (Colliers International Research, 2018), despite of having high demand for commercial offices in Andheri, it has seen rent correction of -2.3%. The reason for upsurge of high rentals in past 2 yrs. was the speculation caused due to new Mumbai metro connectivity form Versova to Ghatkopar. The commercial development is broadly seen in Andheri east than in west because Andheri east has better connectivity from mass transit hubs like CSIA, internal connectivity by metro rails & also road connectivity to BKC. Table 25: Grade A rental in INR per sq. ft. per month

Source: Colliers International Research, 2018

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Highest & Best Use Analysis for Andheri Micro Market

Commercial Trends In Andheri

As per (Colliers International Research, 2018), out of total commercial absorption of 3.7 million sq. ft. in Mumbai, 20% of absorption is acquired by flexible work spaces.

So the latest trend in commercials is undoubtedly the co-working office spaces. After Noida & Bangalore, Mumbai is addressing these flexible spaces and major offices are targeting in Andheri.

As per an article in economic times by (Babar, 2018) Raheja came up mega commercial property of 2.5 lakh sq. ft. leased out to We work. Currently Smart works has leased out 82,000 sq. ft. of flexible spaces on Andheri-Kurla road. It has 2000 seating capacity and the property is 40% pre-booked.

The other trends in commercial offices is Elevated parking spaces for regular employees as well as visiting clients. Also there is common demanding trend of customizable offices & spacious dining areas provided inside the carpet property.

Figure 52: Office Trends Source: sbdtrend

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Highest & Best Use Analysis for Andheri Micro Market

3.4.2 Commercial Demand Analysis

Figure 53: Commercial Developments around the site Source: Base Mao is made in Wikimapia Table 26: Commercial Grade A office space demand

Major Occupants

JP Morgan & Chase We Work Piramal Bharti Airtel Tablespace Red bull Mahanagar Gas ABP Majha Edelweiss D-Decor

Commercial Tower

L&T Business Park Raheja Platinum Light hall Light hall Logitech Park 215 Atrium Solitaire Park Boston House Kanakia Street Solitaire Park

Area Sq. ft.

3.5 Lack 2.5 Lack 1 Lack 1 Lack 1 Lack 60,000 50,000 45,000 40,000 30,000

Rental Values

Rs.

85-135 (Correction of -2.3%)

Avg. Sale Rate

Rs.

18,853 / sq. ft.

Source: Primary Survey

From Table 26, we can observe that major occupants in Andheri micro market is mainly BFSI (Banking, financial services and insurance) & IT (Information Technology) Companies followed with Co-working operators.

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Highest & Best Use Analysis for Andheri Micro Market

3.4.3 Commercial Supply Analysis As per primary survey data, the occupancy rates for major commercials in our primary catchment area are listed below: Table 27: Commercial Occupancy rates near the site

Sr. No 1 2 3 4 5 6 7 8 9 10 11 12

Commercial Buildings

Occupancy (%)

Starhub Fulcrum Leela Business Park Trade Star Leela Galaria Times Square Western House Prime Corporate Park The Qube Mittal Commercial The Orb Skyline Icon Average Occupancy Rate

84 88 79 73 77 89 79 76 89 88 72 82 81%

Source: Primary Survey

100.00 90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 1

2

3

4

5

6

7

8

AVERAGE OCCUPANCY

9

10

11

12

Average occupancy

Charts 7: Commercial occupancy rate Source: Primary Survey

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Highest & Best Use Analysis for Andheri Micro Market

As per secondary data taken from magic bricks, we can see that both demand and supply for commercial is quite high.

Figure 54: Commercial Demand Heat Map Source: Magic Bricks

Figure 55: Commercial Supply Heat Map Source: Magic Bricks

3.4.4 Commercial Demand Supply Analysis After comparing both primary and secondary data, we can say that there is a high demand of commercial grade A office spaces due to high occupancy rate which is a result of low rental rate and good connectivity by various modes of transport to various parts of the city.

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Highest & Best Use Analysis for Andheri Micro Market

3.5 Hospitality (Hotel Property) 3.5.1 Hospitality Development & Trends in Andheri Micro Market

Figure 56: Development and trends of hospitality in Andheri Source: Base Map made in Wikimapia

Development around the site

In the below Figure 56, we have marked major hospitality developments within 1.5 km. radius from the site. The red dots are the five star hotels nearby the site which includes Leela hotel, The Lalit hotel, ITC Maratha Hotel, The Hyatt, JW Marriott etc. Yellow dots are for the places of hotels away from the site. For the feasibility study we are going to consider only those hotels which are near our site.

Hospitality Trends

IOT: Internet of Things is changing the landscape of hospitality industry. Hotels are fulfilling demand of the customers like Wi-Fi, television but customers want more from the hotel connected devices and IOT get more important data to the hoteliers.

Home sharing still on rising: Big hotel chains Hyatt and Accor are coming up with a new thing called affordable hotel chains and they are starting to invest in home sharing companies.

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Highest & Best Use Analysis for Andheri Micro Market

Selling an experience: Customers always appreciate the unique experience in the room. Hence selling an experience rather than selling a room is the best. By telling unique characteristics about the rooms give customers best experience.

360-degree view of rooms: By using technology we can give 360-degree views to the customers so that they can select a perfect room according to their requirements. By using interactive technology like 360 we can give precious experience to the customers.

Mobile is the centre of attraction: hotels are into mobile technologies so that they can give better service to the customers. Keyless entries and entries through mobile application are the examples Bots are on rising: Bots are starting conversation with the customers or guests. They are responding to the questions as if controlled by real people. Google assistance can book hotel room for you. Bots technology is still developing.

3.5.2 Hospitality Demand segmentation for Andheri Most probable users in the area are 70% of business crowd, 11.6 % airline crew, 11.4 leisure, 7% Bollywood crowd which is show in Figure 57.

Figure 57: Hospitality Demand segmentation for Andheri Source: Primary Survey

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Highest & Best Use Analysis for Andheri Micro Market

In next 4 years there will be more demand of hotels in the hospitality industry in Andheri because of increase in efficient connectivity and increase of international & domestic air travellers (Kamat, Sep 12, 2012).

The percentage of the users for each five star hotel near our site is shown below

Figure 58: Percentage of users in 5 star hotels around site Source: Primary Survey

3.5.3 Hospitality Demand Forecast Major points according to primary survey are: ➢ There will be major connectivity because of the airport near the site and also upcoming underground metro (metro line 3). ➢ In the month of December there are increasing hotel bookings due to the wedding and festive season. ➢ Many people will be opting for metro line 3, this will result in low noise pollution and ease of traffic road traffic congestion. ➢ Most of the hotels near the site are business hotels where greater crowd is business crowd. ➢ Hotels in this areas are benefited mostly due to the presence of International Airport.

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Highest & Best Use Analysis for Andheri Micro Market

3.5.3 Hospitality Demand Forecast According to (Gramann, 15 April 2011), Hotel Metrix model shows suitability of project site for different types of hotels near our site are given below

Figure 59: Hotel Matrix Model for hotels around site Source: Short Feasibility Study for a Hotel Project in the Luxury Segment in Vienna, Austria

Figure 58, describes the purpose of travel. This model shows that what type of traveller and what amount of travellers are there in area near the site. We can see in the model that amount of business travellers are more and long stay guests, airline crew, individual tourists are less.

Figure 60, defines suitability of site for particular hotel site According to the primary survey as well as considering suitability of site there is more need of 5 star hotels near the site area because there is more demand of 5 star hotels. supply of 5 star hotels is not fulfilling the demand.

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Highest & Best Use Analysis for Andheri Micro Market

Figure 60: Suitability of site for particular hotel site Source: Short Feasibility Study for a Hotel Project in the Luxury Segment in Vienna, Austria

3.5.4 Demand drivers for hospitality

Globalization

Hotels will need to supply the service according to the globalization. For example customer in China will find for, plan and book a hotel in a different way from customers of Australia. Hotels will need to provide service consistently in the global environment while attending customers from different cultural background (Anon., 2015).

Meeting the demands of the customers

More demands of customers can lead to meeting their demand from hotels. This can be a key driver.

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Highest & Best Use Analysis for Andheri Micro Market

Key Revenue Drivers

Occupancy Rate gives the information about the demand for the hotel’s services It can be calculated as, total number of rooms sold / the total number of rooms available (Anon., 2015) Revenue Per Available Room (or Rev PAR)

It is used to measure company’s ability to generate greater revenue for each room It can be calculated as, hotel room revenue/the total available room nights (Anon., 2015) Average Daily Rate (or ADR)

ADR influences hotel’s revenue and profitability. It is the measure of average room price for which rooms of the hotels are sold.

It can be calculated as, hotel room revenue / the number of rooms sold (influences the hotel’s revenue and profitability) (Anon., 2015) 3.5.5 Supply Analysis for Hospitality Figure 56, all shows the major competitors around the site. Competition analysis with occupancy rate of hotels near the site are as follows: 1. ITC Maratha- 95-100% occupancy rate 2. The Hyatt- 85-90% occupancy rate 3. JW Marriott- 80-95% occupancy rate 4. The Lalit- 90-100% occupancy rate 5. The Leela- 80-90% occupancy rate Source: Primary Survey

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Highest & Best Use Analysis for Andheri Micro Market

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% LALIT

JW MARIOTT

HYATT

ITC MARATHA

AVERAGE OCCUPANCY

LEELA

Average occupancy

Charts 8: Occupancy rates of hotels around site Source: Primary Survey

As the major competitors are The Lalit, The Leela, The JW Marriott, ITC Maratha, The Hyatt, we have done the analysis of all five star hotels which are as follows: Table 28: The Lalit

Characteristics

The Lalit

No. of rooms

390

Lowest price of room

Rs 6500 + taxes

Highest price of room

Rs 2.5 lakhs + taxes

Highest occupancy rate month

December

Lowest occupancy rate month

June

Source: Primary Survey

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Highest & Best Use Analysis for Andheri Micro Market

Table 29: JW Marriott

Characteristics

The JW Marriott

No. of rooms

585

Lowest price of room

Rs 6000 + taxes

Highest price of room

Rs 2 lakhs + taxes

Highest occupancy rate month

December, November

Lowest occupancy rate month

June

Source: Primary Survey Table 30: The Leela

Characteristics

The Leela

No. of rooms

391

Lowest price of room

Rs 7500 + taxes

Highest price of room

Rs 1.5 Lakhs + taxes

Highest occupancy rate month

November, January

Lowest occupancy rate month

December, Monsoons

Source: Primary Survey Table 31: The Hyatt

Characteristics

The Hyatt

No. of rooms

600

Lowest price of room

Rs 6500 + taxes

Highest price of room

Rs 2 Lakhs + taxes

Highest occupancy rate month

November

Lowest occupancy rate month

June

Source: Primary Survey

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Highest & Best Use Analysis for Andheri Micro Market

Table 32: ITC Maratha

Characteristics

ITC Maratha

No. of rooms

380

Lowest price of room

Rs 10000 + taxes

Highest price of room

Rs 2 Lakhs + taxes

Highest occupancy rate month

November

Lowest occupancy rate month

June, Monsoon

Source: Primary Survey

3.5.6 Hospitality Demand Supply Analysis From the above data, we can say as there is increase in business and leisure crowd along with future demand drivers in hospitality and high occupancy rates in hotels around the site, there is a demand of high end hotel facility having a big brand name.

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Highest & Best Use Analysis for Andheri Micro Market

Chapter 4: Financial Feasibility Financial feasibility is done using various cash flow analysis including DCF, IRR, NPV, WACC according to (Björnsdóttir, 2010 ).

4.1 General Assumptions ➢ Land = 10 Acres = 4,35,600 sq. ft. ➢ FSI = 4 ➢ Note: Fungible (15%) and deduction of RG or Amenity space is not considered for this study ➢ Height available for Construction = 28 to 41 m ➢ Occupancy rate Escalation = 5% (Till 90% & then throughout stable).

➢ Lease rate Escalation = 10% ➢ Expected/Discounted Rate= 20% ➢ Target Period= 3 yrs. (residential) and 8 yrs.(commercial, hospitality, retail) ➢ Cost of Capital= 14% ➢ Total time considered for project= 15 yrs.(commercial, hospitality, retail) ➢ Loading= 50% .(commercial, hospitality, retail) Table 33: Assumed Cost of Construction

Assumed Cost of Construction Properties

Costs (INR / sq. ft.)

Commercial

3000

Hospitality

3500

Retail

3500

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Highest & Best Use Analysis for Andheri Micro Market

4.2 Commercial- 100% 4.2.1 Assumptions ➢ Commercial Lease Rate = 135 sq. ft. ➢ Lease rate Escalation = 10%.

➢ Occupancy rate Escalation = 5% (Till 90% & then throughout stable).

Table 34: Commercial- 100%

Commercial- 100% Scenarios (DebtEquity)

Project Cost In Cr.

0%

522.72

100%

Payback Period 9 yrs. 83 days

Benefit to Cost Ratio

NPV

IRR %

1.93

₹ -961,204,808.74

15

➢ Commercial saleable area= 871200 sq. ft.

4.3 Retail- 100% 4.3.1 Assumptions ➢ Avg. market rents = Rs. 284 /sq. ft. ➢ Note: Andheri East retail rate is take by averaging the rates of nearby micro markets ➢ Rent Escalation = 10% ➢ Occupancy rate Escalation = 5% ➢ Primary Catchment area population = Population X 4 times per month ➢ General Expenses= 5% Table 35: Retail- 100%

Retail 100% Scenarios (DebtEquity)

Project Cost In Cr.

0%

609.84

100%

Payback Period 8 yrs. 46 days

Benefit to Cost Ratio

NPV

IRR %

3.9

₹ 544,919,439.79

22

Retail saleable area= 871200 sq. ft.

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Highest & Best Use Analysis for Andheri Micro Market

4.4 Hospitality- 100% 4.4.1 Assumptions ➢ No. of rooms = 200 rooms (70% of total saleable area). ➢ Area of 1 room = 300 sq. ft. ➢ Restaurants = 10% of total saleable area. ➢ Banquet = 20% of total saleable area. ➢ Banquet revenue = 30% of total revenue ➢ Restaurant revenue = 30% of total revenue ➢ Occupancy rate Escalation = 5% ➢ Room rent Escalation = 10%.

Table 36: Hospitaliy- 100%

Hospitality- 100% Scenarios (DebtEquity)

Project Cost In Cr.

0%

609.84

100%

Payback Period 6 yrs. 145 days

Benefit to Cost Ratio

NPV

IRR %

7.7

₹ 4,190,292,123.25

34

Commercial saleable area= 871200 sq. ft.

Note: for 100% FSI we get 2033 rooms which is not feasible as per demand analysis.

So for 200 rooms we have to take 10% and not 100% of FSI, Hence 100% Hospitality is not feasible.

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Highest & Best Use Analysis for Andheri Micro Market

4.5 Mix Use Development 4.5.1 Dual productivity analysis Table 37: Commercial- 90% & Hospitality- 10%

Commercial- 90% Hospitality- 10% Scenarios (DebtEquity)

Project Cost In Cr.

0%

531.43

100%

Payback Period 8 yrs. 207 days

Benefit to Cost Ratio

NPV

IRR %

2.6

₹ -446,055,115.54

18

Commercial saleable area= 784080 sq. ft.

Hospitality saleable area= 87120 sq. ft.

Table 38: Retail- 90% & Hospitality- 10%

Retail- 90% Hospitality- 10% Scenarios (DebtEquity)

Project Cost In Cr.

0%

609.84

100%

Payback Period 7 yrs. 346 days

Benefit to Cost Ratio

NPV

IRR %

4.3

₹ 909,456,708.13

24

Retail saleable area= 784080 sq. ft.

Hospitality saleable area= 87120 sq. ft.

Table 39: Commercial- 50% & Retail- 50%

Commercial- 50% Retail- 50% Scenarios (DebtEquity)

Project Cost In Cr.

0%

566.28

100%

Payback Period 8 yrs. 214 days

Benefit to Cost Ratio

NPV

IRR %

3.0

₹ -208,142,684.47

19

Retail saleable area= 435600 sq. ft.

Commercial saleable area= 435600 sq. ft.

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Highest & Best Use Analysis for Andheri Micro Market

Table 40: Commercial- 30% & Retail- 70%

Commercial- 30% Retail- 70% Scenarios (DebtEquity)

Project Cost In Cr.

0%

583.70

100%

Payback Period

Benefit to Cost Ratio

NPV

IRR %

3.4

₹ 93,082,165.23

20

8 yrs. 139 days

Retail saleable area= 609840 sq. ft.

Commercial saleable area= 261360 sq. ft.

4.5.2 Triple productivity analysis Table 41: Commercial- 50% Hospitality- 20% Retail 30%

Commercial- 50% Hospitality- 20% Retail 30% Scenarios (DebtEquity)

Project Cost In Cr.

0%

566.28

100%

Payback Period

Benefit to Cost Ratio

NPV

IRR %

3.82

₹ 520,931,852.22

22

7 yrs. 351 days

Retail saleable area= 261360 sq. ft.

Commercial saleable area= 435600 sq. ft.

Hospitality saleable area= 174240 sq. ft.

Table 42: Commercial- 30% Hospitality- 20% Retail 50%

Commercial- 30% Hospitality- 20% Retail 50% Scenarios (DebtEquity)

Project Cost In Cr.

0%

583.70

100%

Payback Period 7 yrs. 301 days

Benefit to Cost Ratio

NPV

IRR %

4.2

₹ 822,156,701.92

23

Retail saleable area= 435600 sq. ft.

Commercial saleable area= 261360 sq. ft.

Hospitality saleable area= 174240 sq. ft.

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Highest & Best Use Analysis for Andheri Micro Market

Chapter 5: Recommendations 5.1 Best Case Scenario Demand supply analysis and primary study stated that, the saleable area from retail must be at least 4 lakhs sq. ft., 5 star hotels with at least facility of 400 rooms and commercial grade space of min. 2 lakhs sq. ft.

As per financial feasibility and demand supply analysis, below is

the best case

scenarios with debt equity calculations Table 43: Commercial- 30% Hospitality- 20% Retail 50% with debt equity

Commercial- 30% Hospitality- 20% Retail 50% Scenarios (DebtEquity)

Project Cost In Cr.

0%

100%

583.70

80%

20%

583.70

Payback Period

Benefit to Cost Ratio

NPV

IRR %

7 yrs. 301 days

4.2

₹ 822,156,701.92

23

9 yrs. 110 days

3.5

₹ -240,424,274.87

19

Retail saleable area= 435600 sq. ft.

Commercial saleable area= 261360 sq. ft.

Hospitality saleable area= 174240 sq. ft.

Table 44: Retail- 80% Hospitality- 20% with debt equity

Retail- 80% Hospitality- 20% Scenarios (DebtEquity)

Project Cost In Cr.

Payback Period

0%

100%

609.84

7 yrs. 238 days

80%

20%

609.84

8 yrs. 165 days

Benefit to Cost Ratio

NPV

IRR %

4.7

₹ 1,273,993,976.48

25

4.7

₹ 164,097,934.60

21

Retail saleable area= 696960 sq. ft.

Hospitality saleable area= 174240 sq. ft.

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Highest & Best Use Analysis for Andheri Micro Market

5.2 Recommendations ➢ Residential Development is not permitted as the proposed site falls under CSIA notified area as per MMRDA. ➢ 100% Retail is financially feasible and market analysis depicts demand for superior grade-A Retail malls, Table 35. ➢ 100% Hospitality is financially feasible but as per demand supply analysis average 400 rooms is required which covers only 20% of the total area, Table 36. ➢ 100% Commercial grade A development is the most feasible option in terms of market demand but not financially feasible, Table 34.

Hence as per market study, demand supply analysis and financial feasibility analysis the highest and best use option will be a mix used development including minimum of 4 lakhs. sq. ft of retail development with at least 400 room of hospitality 5 star project and min. of 2 lakh. Sq. ft of commercial grade A office space.

Option 1: Taking Commercial- 30%, Hospitality- 20%, Retail

50% we fulfil the

demand of the micro market and get an IRR of 23% at zero debt, Table 43.

Option 2: Taking Hospitality- 20%, Retail- 80% we fulfil the demand of the micro market and get an IRR of 25% at zero debt or 21% at 80% debt, Table 44.

We recommend option 1 as retail market is not well developed in Andheri East, but will grow as there is increase in demographics and development trends along with high demand for commercial space around the site.

The development can also be done in phase wise stages with hotel and commercial completed in Phase 1 and retail in phase 2.

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Highest & Best Use Analysis for Andheri Micro Market

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