MUMBAI: It is common knowledge that developers call the shots and always have the upper hand, but now housing societies across the city, which are planning to redevelop their buildings, are turning the tables. With builders lining up to grab the redevelopment rights, these housing societies are raising the bar and squeezing out maximum benefits for their properties, sometimes leading to ‘unrealistic demands’.According to market sources, societies are demanding additional area, hardship compensation and displacement amounts that are 15% to 25% higher than what the market realistically supports today. In addition to the standard area alignment and relocation compensation, many are asking for additional benefits and significant payouts per member. In some cases, these expectations extend beyond feasibility – for example, societies are asking for substantial additional surface area, large relocation allowances and high-quality finishes, they said.
“There is a herd mentality: once a few societies in an area get a high bid, others assume this will be the new baseline. But each plot has its own FSI profile, zoning restrictions and financial viability. You cannot compare every property with the highest-value transaction in the belt,” said a real estate market watcher.Essentially, the sentiment that “developers are back in the market” after 2022 has led to inflated benchmarks in the Western Corridor. Between Bandra and Juhu, societies expect rents for alternative accommodation of Rs 225 per sq ft, while rates are around Rs 150 to Rs 175 per sq ft. Individual corpus funds ideally between Rs 3,000 and Rs 3,500 per square meter on carpet are sought at the rate of Rs 4,500 to Rs 5,000 per square meter.
“We have seen this trend quite prominently in the western belt – from Bandra to Borivli. The spike is particularly visible in micro markets like Khar, Santacruz, Andheri and Goregaon, where redevelopment activities have intensified in recent years. Even societies in Borivli and Kandivli, which traditionally saw more mid-range projects, are now citing unrealistic expectations on par with Vile Parle or Juhu,” real estate market sources said.
Sanjay Daga, CEO and MD of Anex Advisory, says: “Increasing aspirations and changing lifestyles have influenced the way societies approach negotiations. Many are seeking higher compensation, additional land area and improved amenities, driven primarily by the belief that the current booming market will support these expectations. At the same time, developers must follow strict feasibility parameters shaped by fluctuating land economics, construction costs and market absorption.”
He added that it is equally important for societies to assess a developer’s track record rather than relying solely on the highest bid, as an initially lucrative proposal could end up being more expensive if project delivery falls through. “Taking a balanced approach lies in recognizing that both parties have legitimate concerns. While societies want fair value for their homes, developers must ensure long-term viability and control on-time delivery. When expectations and feasibility are aligned, redevelopment becomes a collaborative opportunity rather than a bone of contention.”
Developer Ram Raheja said some societies exploring redevelopment sometimes have expectations that seem commercially unrealistic. “There are several tenders that we consciously move away from when the numbers no longer make economic sense,” he said, adding that this trend has emerged largely because certain developers are willing to offer terms that go beyond standard feasibility standards. “Such developers are often looking for a strategic entry into a micro market where they are not yet established, and the bid becomes a gateway for them to compete with seasoned players already active in that space,” he said.
“It is normal for members to want the best possible terms and to maximize the benefits of redevelopment – ​​no one can blame any society for that. However, it is equally important to approach such expectations carefully because redevelopment is a long-term commitment and the margin for error is very small,” Raheja said.
Experts say there are two main reasons: perception and partial information. First, many societies hear about record-breaking deals and assume the same numbers apply – without understanding the underlying economics. They focus on the headline figure rather than the cost structure, resale value or land use potential of the project. Social media, word of mouth between societies and anecdotal references to major projects have all contributed to this bubble of expectations.
“What most societies miss is that the land economy can change dramatically every few kilometers, and the viability of a redevelopment deal depends on FSI potential, construction costs, resale value and market absorption – not just the perceived brand value of a location,” they said.
There is also a new trend where societies expect 70-80% of FSI share for members, up from the previous 35-40%, assuming the developer can still make the numbers work. “When societies quote or demand unrealistic areas and payouts too high, credible developers take a step back, leaving room for smaller players with limited capital investments. These are often the ones who promise aggressively but lack the financial depth to deliver, leading to stalled projects and deferred assets,” said one market expert.
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