Japan’s Sumitomo Realty and Development is charting an unconventional expansion strategy in India by concentrating exclusively on Mumbai and prioritising the development and long-term management of residential assets rather than outright sales.

As global developers increase exposure to India’s USD 300 billion real estate market, drawn by rising rentals and comparatively lower construction costs, Sumitomo is opting for ground-up development in Mumbai’s most sought-after locations, betting on sustained rental growth driven by land scarcity and strong corporate demand, Reuters reported.

Players such as Japan’s Mitsui Fudosan, as well as U.S.-based Blackstone, have expanded across India by partnering with local developers or buying completed buildings, given slow land acquisition processes. Sumitomo, however, is concentrating on Mumbai and opting for ground-up construction.

“Just like Tokyo, Mumbai has assets and vitality that are worth focusing on,” Niinomi Masato, general manager of Sumitomo’s India business division, said in an interview.

Sumitomo has previously called Mumbai its “second growth engine” after Tokyo, where it manages 240 buildings. Mumbai has fewer geographical risks such as earthquakes, which can threaten assets and cash flow, Masato added.

Tomoki Iwata, managing director of Sumitomo’s Indian unit Goisu Realty, said the company was reviewing other cities but so far had found no suitable sites in Delhi, Bengaluru or Chennai.

Sumitomo sees a stronger supply of prime locations in those cities compared with Mumbai, where a land crunch creates scope for long-term rental growth.

Sumitomo is developing five projects in India – all in Mumbai, including four in the Bandra Kurla Complex near the international airport, home to many global companies.