Sumitomo Realty Bets on Mumbai, Expands Serviced Apartments

Sumitomo​‍​‌‍​‍‌​‍​‌‍​‍‌ Realty & Development of Japan, the third largest real estate developer in the country, is simplifying its expansion strategy in India by focusing only on Mumbai and by giving priority to the management and leasing of residential assets rather than to the sales of the assets.

The approach makes Sumitomo different from many other global peers that have entered India through partnerships or acquisitions of completed properties.

They are motivated by India’s $300 billion real estate market, rising rental yields, and significantly lower construction costs than global cities such as Tokyo, New York, and London.

Key Highlights

• Sumitomo Realty focuses India expansion exclusively on Mumbai
• Strategy prioritises leasing and managing apartments over selling
• Rising Mumbai rents support long-term, recurring income model

While companies like Mitsui Fudosan and U.S.-based Blackstone have spread their investments across multiple Indian cities, Sumitomo with a more focused, long-term bet on Mumbai is pursuing ground-up development.

“Mumbai, like Tokyo, has the energy and the quality of assets that make sense for long-term investment,” said Niinomi Masato, General Manager of Sumitomo’s India business. He also referred to Mumbai’s relatively lesser geographical risks, such as earthquakes, as a factor for the protection of asset values and cash flows.

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Sumitomo is deep into five projects in India, all of them in Mumbai, including four in the Bandra Kurla Complex near the international airport. These projects are scheduled to be completed within five years and are aimed at producing stable cash flows to back up future growth. The company has put in around one-fourth of its total $6.5 billion India commitment.

Sumitomo intends to keep the ownership of luxury units and make a recurring income out of renting and managing apartments instead of selling them. This is possible due to the surging demand for premium rentals in Mumbai's land-constrained ​‍​‌‍​‍‌​‍​‌‍​‍‌market.