Archive · 26 Aug 2026
AIFs Target Commercial Space in Mumbai Redevelopment Projects
Investment funds are looking to buy commercial spaces in buildings being rebuilt.
These projects often combine homes with offices or shops.
Mumbai has many old buildings that may be redeveloped.
About one-tenth of the expected redevelopment value could involve commercial properties.
Investors say these projects may earn more than residential projects.
Some commercial floors can receive approval and be handed over while construction continues elsewhere.
This can give investors money sooner.
The spaces are also cheaper to build because they are delivered without interior fit-outs.
Investors believe commercial properties can reduce the risks of relying only on housing.
Alternative investment funds are seeking commercial properties in mixed-use redevelopment projects across Mumbai and other cities.
Motilal Oswal and Nisus Finance are evaluating properties spanning about 100,000-200,000 square feet.
Mumbai’s residential redevelopment pipeline is estimated at Rs 1.5 lakh crore through 2031, with commercial space representing roughly Rs 15,000 crore.
Mixed-use projects reportedly offer about 30% internal rates of return, compared with 23-24% for residential properties.
Investors say commercial units can provide earlier payments, lower construction costs and portfolio diversification.
- Who
- Alternative investment funds, including Motilal Oswal and Nisus Finance, are exploring the opportunities.
- What
- The funds are considering investments in commercial portions of mixed-use redevelopment projects.
- When
- The opportunity is linked to a residential redevelopment pipeline extending through 2031; specific investment dates were not stated.
- Where
- Mumbai and other cities, including a project being evaluated on Mumbai’s Western Expressway.
- Why
- Investors are attracted by potentially higher returns, faster realisation, lower construction costs and portfolio diversification.
- Residential redevelopment pipeline
- Rs 1.5 lakh crore in Mumbai by 2031, according to Knight Frank.
- Estimated commercial opportunity
- About Rs 15,000 crore, based on industry estimates that commercial space accounts for 10% of the pipeline.
- Typical property size
- Approximately 100,000-200,000 square feet.
- Mixed-use project IRR
- About 30%.
- Residential project IRR
- About 23-24%.
- Investment approach
- Properties are generally built for sale rather than the build-to-lease model common in office hubs.
- Construction advantage
- Commercial units are delivered as bare shells without fit-outs, reducing construction costs.