Photo/Illutration Sumitomo Realty and Development Co. is undertaking redevelopment projects in central Mumbai. (Provided by Sumitomo Realty and Development Co.)

Japanese real estate companies are expanding their investments in India and could drastically change skylines there.

Sumitomo Realty and Development Co. will open a number of skyscrapers in the 2030s in Mumbai at a total cost of about 500 billion yen ($3.54 billion).

With little room for development in central Tokyo, the company plans to make India, with its continuing economic growth, a new base for operations.

In October, Sumitomo Realty and Development acquired an 80,000-square-meter plot of land in the Worli district of central Mumbai, equivalent to 1.7 Tokyo Domes, for about 80 billion yen.

It plans to build a high-rise there that will house offices, commercial facilities and a hotel. It is believed to be the largest development project in India undertaken by a Japanese company.

The company is also erecting two office buildings in other parts of Mumbai, and has invested about 200 billion yen for these plans.

“We want to bring together the urban center development know-how we have cultivated in Tokyo,” a company representative said.

The central area of Mumbai is lined with hotels, tower condominiums and buildings housing the offices of foreign companies. Infrastructure improvements, such as a bullet train station, are under way.

According to Sumitomo Realty and Development, office rent in Mumbai was 38,973 yen per “tsubo” (about 3.3 square meters) as of the end of December 2022. The rate was 41,384 yen per tsubo in Tokyo’s Marunouchi district.

High profitability can be expected in Mumbai, even with the risks of changing interest rates and foreign exchange fluctuations, the company said.

Mitsubishi Estate Co. has joined a development project in Chennai, southern India, headed by a Singaporean real estate giant. The plans are for two 11-story office buildings to be completed by 2025.

Mitsui Fudosan Co. developed a 12-story office building in Bengaluru (Bangalore), also in southern India.

The region is known as the “Silicon Valley of India,” where domestic and foreign companies have established research and development bases.

Startups are also located there, and growth is expected in the area, Mitsui Fudosan said.

(This article was written by Akifumi Nagahashi and Daisuke Hirabayashi.)

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