Mumbai Real Estate is Pricier Than Manhattan's

Occasionally I amuse myself by perusing apartment listings online, fantasizing about the luxury pad I plan on purchasing as soon as I win the lottery. Though my only experience of the Upper East Side thus far consists of ambling along Fifth Avenue, it seems like the perfect place in which to live the well-manicured life that millions of dollars can buy. A recent Google search confirmed that one of Manhattan's most expensive apartments, the 1,269-square-meter penthouse of the Pierre Hotel, on which I've set my sights, is still available. It's been on the market since 2004; potential buyers apparently aren't finding it a steal at $70 million.

Perhaps the listing's agents, Brown Harris Stevens, should invest in a Mumbai office. After all, it's an Indian (steel magnate Lakshmi Mittal) who is in talks to purchase the world's most expensive house: a nearly $229 million mansion in London. And judging by the recent spate of high-profile, record-priced residential developments in Mumbai's toniest neighborhoods, there are plenty of others for whom the Pierre might make a cozy pied-à-terre.

Indeed, when it comes to real estate, Mumbai is India's Manhattan. Though thousands of kilometers apart, the two cities have similar characteristics: most important, both are financial and cultural centers built on islands, which means that they will one day run out of room. That point will likely come a lot sooner in Mumbai than in Manhattan, considering that it's already one of the most densely populated metropolises in the world. For its richest citizens, however, the space shortage is not much of a concern.

Just ask Mukesh Ambani. With an estimated net worth of $43 billion, the Reliance Industries chairman has embarked on construction of his own private Shangri-La in Mumbai, which, when completed, will be the world's most expensive private residence, rumored to cost nearly $2 billion. Ambani solved the issue of space by building up; his 27-floor steel-and-glass tower (with 60-story proportions), named Antilia, will have a movie theater, swimming pool, helipads, multilevel parking structure, hydroponic gardens, health club, snow room and more, all for a family of six. (To be fair, it will also serve various corporate functions.)

Ambani's favored 'hood, Cumballa Hill, has become Mumbai's Billionaire's Row, housing some of India's biggest names: industrialists Kumar Birla and Anil Agarwal, and media magnates the Sahu Jains, among others. Recently an unidentified buyer reportedly shelled out $100 million for a 1,000-square meter plot of land. Cumballa Hill is not the city's only posh address: neighboring Malabar Hill apartments can fetch up to $2,400 per square foot and apartments in the NCPA building at Nariman Point stretch to $1,400 per square foot. That's pretty steep considering the average price per square foot in Manhattan last quarter was $1,263—down two percent.

For all their fantastical prices, many of these properties aren't much to look at. Mumbai's stifling humidity, salty air, industrial grime and annual monsoon rains corrode and discolor even the most impressive structures. "Many of the crumbling, dilapidated buildings you see in South Mumbai are prime property," says Divia Thani Daswani, the features editor of Vogue India and a resident of one of the few pristine prominent South Bombay buildings, called the Monolith. "Tiny apartments here command the same—even higher—prices than white-glove buildings do on the Upper East Side, but you'd never guess it: the elevators are shabby, the plumbing and electrical systems are ancient; there are no amenities, no shiny lobbies, no gardens … It's absurd, really."

But at least they have water and power. Much of Mumbai's real-estate market suffers from inadequate traffic infrastructure, water resources and power supply, in addition to an all-prevailing absence of space. Privileged neighborhoods that have better access to infrastructure services—plus the political clout to keep out poverty and crime—find their prices drastically inflated, their residents blissfully insulated from the grim reality surrounding them.

In other cases, big-ticket buildings sprout right in the midst of slums. Even where intentions are good, the divide remains glaring; the developers of the Imperial Towers in Tardeo agreed to build low-cost housing as part of a slum-redevelopment plan centered on 60-story twin towers (still under construction, with flats that are expected to sell for up to $30 million). But the builders are now proposing an alternate access road so the Imperial's residents don't have to drive past any depressing structures or stray indigents, and in the meantime they are constructing a driving ramp that will connect at lobby level on the 11th floor.

For a foreigner, Mumbai's heady real-estate market might raise red flags about a potential bubble, and in recent years property values have, indeed, ceased skyrocketing. But as Mumbai's population continues to explode and its economy expands even further, prices will inevitably resume their climb. Despite all its issues, this city by the sea remains India's most desirable address. Its roads will become increasingly congested, the air more polluted and clean water ever scarcer. Yet the city's multimillionaires and billionaires will be sitting pretty, tucked securely in their castles in the clouds, a new generation of supermen headed further up, up and away.