DELHI NCR RESIDENTIAL REAL ESTATE OVERVIEW MAY 2015
1
TABLE OF CONTENTS
1. EXECUTIVE SUMMARY 3
2. CITY FACT FILE 5
3. MAJOR INFRASTRUCTURE DEVLEOPMENTS 8
4. REAL ESTATE OVERVIEW 10
5. FACTORS IMPACTING REAL ESTATE 14
6. NEW DELHI 15
7. GURGAON 20
8. PERIPHERAL LOCATIONS OF GURGAON 24
9. NOIDA 28
10. GREATER NOIDA 31
11. GHAZIABAD 33
12. LOCATION ATTRACTIVENESS INDEX 35
13. APPENDIX - I (Major Policy-based Developments) 38
2 EXECUTIVE SUMMARY
The ‘Delhi-NCR Residential Real Estate Overview – May, 2015’ provides a comprehensive insight into the key trends that have emerged in the residential markets of Delhi-NCR and some of the upcoming peripheral locations. The report is an outcome of a rigorous survey conducted by ICICI Home Finance Company across the different regions of Delhi-NCR. Some of the key findings are as follows:
The Delhi-NCR real estate market witnessed a slowdown during 2013, and this trend continued in 2014. Residential markets across the Delhi-NCR region witnessed subdued levels of activity in CY2014 both in terms of new launches and sales volume. On the demand side, this slowdown largely owes to a mix of factors such as unfavourable macroeconomic scenario and weak investor sentiment. Also, an impending interest rate cut kept the buyer preference to remain focused on secondary and emerging markets of Delhi- NCR. On the supply side, pressures of a substantial amount of unsold inventory and liquidity constraints due to slow absorption made the developers to focus on project execution and keep a check on new launches.
There has been an increased interest in cost effective micro–markets such as Greater Noida which accounted for a majority of the total sales volume in CY2014 in the Delhi-NCR region. Capital values across majority of the micro-markets of NCR witnessed a stagnation due to subdued demand levels. Also, supply pressures are expected to remain high as a lot of projects are yet to be delivered.
New launches primarily took place in the mid-segment, in the micro-markets of Noida, Noida Extension and affordable housing projects in Gurgaon. The mid and affordable housing segments are expected to witness capital appreciation in the short term.
The Delhi-NCR region has been witnessing a host of infrastructural developments which are expected to create a positive impact on the overall real estate market scenario. The marquee projects such as DMIC (Delhi Mumbai Industrial Corridor), KMP Expressway (Kundli-Manesar-Palwal Expressway) and the FNG Corridor (Faridabad-Noida-Ghaziabad Corridor) are expected to give a boost to the economy in congruence with the other infrastructural development projects such as the mass transit systems and smart cities project.
The Gurgaon real estate market has been traditionally heavily investor driven. Residential prices in the Gurgaon real estate market are expected to be stagnant in the short run owing to the slow pace of inventory absorption. Buyers are maintaining a cautious stance with respect to the high prices and are increasingly shifting their focus towards the secondary markets that have witnessed minor price corrections. However, prices in the long run are expected to trend up owing to the increasing cost of construction coupled with the imminent infrastructure developments in the city.
During the survey, it was observed that the Noida market has been going through a wait-and-watch phase, leading to a subdued sentiment because of the deliveries not happening as per schedule. But the deliveries are expected to start in another year’s time which should have a significant positive impact on the sentiment of the market as the occupancy rates start to rise. However, Noida remained a priority destination for mid-segment and affordable housing segments and is predominantly end-user driven.
Greater Noida market also witnessed significant real estate activity in 2014 in terms of both new launches and absorption, with a large number of units concentrated in Noida Extension and Yamuna Expressway. Due to the comparative affordability and planned development of these areas, developers continued to prefer launching projects in these locations.
Ghaziabad has also emerged as an important micro-market catering primarily to the mid-segment and affordable housing investors. This micro-market primarily includes local investors and end-users who are looking for upgrading their current accommodation or investment.
Certain peripheral locations of Gurgaon such as Sohna, Dharuhera, Neemrana and Bhiwadi have witnessed healthy demand from both end users and investors.
Sohna, an emerging city adjoining Gurgaon, is being developed as per the ‘Sohna Master Plan-2031’ with an area of 6,110 hectares earmarked for future development and more than 28% of the land area set aside for residential development. The region is set to benefit from its proximity and good connectivity with the prime locations of Gurgaon. Residential real estate is still in a very nascent stage in the region, however in the near future, this location is expected to cater to the spill-over demand from Gurgaon in addition to the 3
EXECUTIVE SUMMARY
local demand. The region should also benefit from the existing and planned industrial developments such as IMT Sohna and Ascendas IT SEZ.
Dharuhera has emerged as an affordable real estate destination in NCR over the past few years. Residential demand has predominantly been from local end-users or investors from neighboring regions of NCR, seeking affordable options. The area benefits from its strategic location on NH-8, industrial development and good connectivity with Gurgaon. Residential units available in this belt are priced in the average range of INR 2,500 - 3,500 / sq. ft.
Neemrana is one of the fastest growing industrial centres in north India. It is strategically located on NH-8 and in proximity to the other industrial sub-markets of Bhiwadi, Bawal, Khushkhera and Tapukhera. Situated in Rajasthan and as a part of Delhi-NCR, this sub-market has attracted heavy industrial investments from Japanese manufacturing firms. With 70% of the 1,200-acre Japanese Zone being operational, the investment in manufacturing facilities by firms such as Daikin, Mitsui Chemicals, Nissan, Nippon and NYK Logistics will enhance the development of this area.
Bhiwadi is an industrial town and a part of Delhi-NCR. RIICO (Rajasthan State Industrial Development and Investment Corporation) has been instrumental in the industrialization of Bhiwadi since 1975. The region is also a part of the prestigious DMIC project. Market demand is largely driven by local and neighboring regions of Delhi-NCR such as Manesar and Rajasthan, as residential units in this belt are still in the affordable range.
India Gate, Delhi
4
CITY FACT FILE
Delhi City
Delhi, the national capital of India, is situated in the northern part of the country with Uttar Pradesh bordering it in the east and Haryana in the north, west and south. The city is spread over an area of 1,483 square kilometers and lies 216 meters above the sea level. Two prominent features of Delhi’s geography are the Yamuna flood plains and the Delhi ridge. The low lying Yamuna flood plains provide fertile alluvial soil, which is suitable for agriculture but the plains are prone to floods. However, the Delhi ridge forms a dominating feature in the region. It starts from the Aravali Range in the south and encircles the west, northwest and northeast parts of the city. The Hindon river separates Delhi from Ghaziabad.
The name Delhi originates from the Persian word ‘Dahleez’ (threshold of frontier) or from the name of the Mauryan king, Raja Dhillu. Some historical literature also refers to the original name as ‘Dhillika’. The satellite towns like Faridabad, Gurgaon and Noida, collectively known as the National Capital Region (NCR), surround Delhi. NCR was developed as the city needed room to expand and bear the burden of the increasing growth and development in the region.
The city boasts of its historical importance from the fact that it has been home to the Mughal Empire. Delhi is the political center of India.
Census 2011 Key Highlights
Description 2011 2001 Actual Population 16,753,235 13,850,507 Male 8,976,410 7,607,234 Female 7,776,825 6,243,273 Population Growth 20.96% 46.31% Sex Ratio (females per 1000 males) 866 821 Area sq. km. 1,483 1,483 Density per sq. km. 11,297 9,340 Literacy Rate 86.34% 81.67% Male Literacy Rate 91.03% 87.33% Female Literacy Rate 80.93% 75.24% Total Literates 12,763,352 9,664,764 Male Literates 7,210,050 5,700,847 Female Literates 5,553,302 3,963,917
Source: Census 2011
5
CITY FACT FILE
Gurgaon City
Overview: Gurgaon, located to the south of New Delhi, is the industrial and financial centre of Haryana. This satellite city was recognized as a potential investment destination, especially after the liberalisation of the Indian economy in the 1990s, owing to its proximity to New Delhi and the smart policy initiatives of the Haryana government. Today, modern shopping malls and skyscrapers are dotted along its landscape after a major realty boom post the late 1990s.
Geographical Stretch: The Gurgaon district comprises of five blocks: Badshahpur, Pataudi, Sohna, Gurgaon and Farrukhnagar. It is bounded by the district of Jhajjar and Delhi on its north, Faridabad district on the east, on the west lies the Rewari district and the state of Rajasthan and the district of Mewat in the south. It is located at the northern edge of the Aravali mountain ranges.
Etymology: The origin of the city’s name ‘Gurgaon’ runs deep in Hindu mythology. Gurgaon is considered as the ancestral village of Guru Dronacharya (or Drona), the martial arts teacher of the Pandavas and the Kauravas in the epic Mahabharata.
In the Sanskrit language, ‘Guru’ means teacher, which refers to Dronacharya and ‘Gram’ or ‘Gaon’ refers to village. According to Hindu mythology, the village was gifted by King Dhritarashtra of Hastinapur to Dronacharya and therefore was known as Guru-Gram. Over the years, the colloquial term ‘Gaon’ was substituted for ‘Gram’ and the name Gurgaon emerged.
History: East India Company took control of Gurgaon city through a treaty signed by Surji Arjungaon in the year 1803. Later on, the British integrated Gurgaon into the Punjab province, where it remained as the district and tehsil headquarters. Following India’s independence, Gurgaon was a part of Punjab until Haryana was formed as a separate state in 1966.
In the initial years, Gurgaon remained a small farming village until the setting up of Maruti in 1983, an automotive company, which accelerated Gurgaon’s growth story. Adding to this, Delhi started witnessing a large influx of labourers from the neighboring regions of Rajasthan, Orissa and Bihar. In the early 1990’s, as Delhi became crowded, the need for a satellite city became apparent. Hence, Gurgaon emerged as the next ideal choice owing to its vast undeveloped agricultural land and its close proximity to Delhi. Moreover, over time, the government’s tax reforms, close proximity to the Delhi International Airport and the Delhi-Gurgaon expressway attracted huge investments in the real estate market of Gurgaon.
Census 2011 Key Highlights Description 2011 2001 Actual Population 1,514,085 870,539 Male 817,274 470,504 Female 696,811 400,035 Population Growth 73.93% 44.15% Area Sq. Km 1,215 1,215 Density/km2 1,241 717 Proportion to Haryana Population 5.97% 4.12% Sex Ratio (females Per 1000 males) 853 850 Child Sex Ratio (0-6 Age) 826 806 Average Literacy 84.4% 78.5% Male Literacy 90.3% 88% Female Literacy 77.6% 67.5% Literates 1,111,042 343,135 Male Literates 639,969 226,165 Female Literates 471,073 569,300 Source: Census 2011
6
CITY FACT FILE
Noida:
Overview: New Okhla Industrial Development Authority (NOIDA) constituted under the UP Industrial Area Development Act, 1976 is a planned, integrated, modern industrial city, well connected with Delhi through a network of national highways, roads and the DND flyover. NOIDA, spread over an area of 20,316 hectares, is one of the largest planned industrial townships in Asia.
Location: The township is located in the state of Uttar Pradesh. It is located 14 km away from Connaught Place. Travel time to Noida has been further reduced by the half km long eight-lane NOIDA toll bridge across Yamuna connecting Maharani Bagh in Delhi to Noida. Noida is bound by the NH 24 by-pass in the North, beyond which the Ghaziabad Development Authority starts, in the East by River Hindon beyond which the Greater Noida region starts, in the West by River Yamuna after which are the states of Delhi and Haryana and in the South, is the meeting point of the rivers Yamuna and Hindon.
Industrial Area: In the year 2010, NOIDA earmarked roughly 710,000 sq. m. land for different industries. There are roughly 6,014 manufacturing units operating out of this area. With an investment of INR 127.1 billion, these industries provide employment to about 95,000 people.
The Noida Software Technology Park ranks second in the country in terms of export turnover. Noida Export Processing Zone (NEPZ), a 100% export oriented unit and the only land locked export processing zone in the country, houses industries like textiles, electronics, engineering, computer software etc.
Roads: The roads connecting NOIDA such as NH-2, Link Road, Kondli Road, Noida-Greater Noida Expressway, Noida- Agra-Mathura Expressway and the DND flyover - provide easy access in and out of Noida. In the different sectors of NOIDA, the authority is maintaining 400 km long internal roads and 125 km long boundary roads, for the easy movement of the intra city road traffic.
Planning: About 35.66% of Noida’s area is being earmarked for residential development. In the decade ahead, Noida plans to acquire and develop 3,400 hectares of land, out of which 430 acres have been earmarked for residential, 620 hectares for commercial, 650 hectares for industrial and 200 hectares for institutional purposes. Another 300 hectares of land has been assigned for development of recreational purposes, which would include entertainment parks and cultural activities. 125 hectares of land would be utilized for road transport facilities.
Jantar Mantar, Delhi 7
MAJOR INFRASTRUCTURE DEVLEOPMENTS
The major infrastructural developments taking place in the Delhi-NCR region are discussed as below:
Delhi Mumbai Industrial Corridor (DMIC): Delhi-Mumbai Industrial Corridor (DMIC) is an ambitious infrastructure project in India that is expected to provide a major impetus to the planned urbanization of India with manufacturing being the key driver. The project has been conceptualized in collaboration with the Government of Japan. It is spread across a length of 1,483 km and is expected to cost approximately INR 6 lac crores with technical and financial aids from Japan. It would pass through six States - U.P, Delhi, Haryana, Rajasthan, Gujarat and Maharashtra, with end terminals at Dadri in the NCR and Jawaharlal Nehru Port near Mumbai.
This project is expected to be a major source of employment generation and would enhance the infrastructural capabilities and connectivity through rail, road, port, and air. Smart cities such as Shendra in Maharashtra, Manesar in Haryana, Khushkera in Rajasthan and Dholera in Gujarat are planned under this project. The Dedicated Freight Corridor (DFC), a 1,483 km-long railway network, will be the backbone of the project that is expected to cut the logistical costs of manufactured goods to make them more cost-effective.
Source: DMIDC official website, media sources Source: Economic Times
Faridabad-Noida-Ghaziabad corridor
According to the initial plan, the corridor is supposed to be 56kms long and connect NH-24 (near Ghaziabad) and NH-2 (which connects Delhi to Agra) with 19.9 km falling in the Noida-Greater Noida region, 8 km in Ghaziabad, while the remaining 28.1 km is in the Faridabad region. This road begins at Chijarsi village near the NH 24 and passes through the sectors 142, 143B, 167 and ends at the Sadullapur village near sector 168.
As per certain reports, the Noida authority has been also working on two bridges to be built across the Yamuna river, which is expected to improve the connectivity between Noida and Faridabad. The first bridge would connect Faridabad-Noida-Ghaziabad (FNG) expressway with Haryana in Faridabad and would be constructed in Noida’s Sector-150. The other bridge is proposed to link Noida’s Sector-168 with Faridabad’s Badoli village.
Kundli-Manesar-Palwal Expressway
Kundli-Manesar-Palwal Expressway is popularly known as the Western Peripheral expressway. It shall run between Kundli and Palwal in Haryana. It measures 135.6 km in length, crosses four national highways namely NH-1 near Kundli, NH-2 near Palwal, NH-8 near Manesar and NH-10 near Bahadurgarh and the State Highway 13 (Gurgaon to Alwar). A flyover is being constructed at the junction point between the national highway and the expressway. Moreover, underpasses and crossing passages are being constructed for vehicles and pedestrians at places where the expressway connects to villages and towns. Many major and minor bridges are proposed to be constructed at different locations across the expressway.
8
MAJOR INFRASTRUCTURE DEVLEOPMENTS
Dwarka Expressway
Dwarka Expressway, also known as the Northern Peripheral Expressway (NPR), when complete would be an eight- lane expressway. It is being developed under the public-private-partnership (PPP) model by the Haryana Urban Development Authority (HUDA) at a cost of about INR 1.2 billion. The proposed expressway shall stretch 18 kms, connecting Dwarka Phase II (New Delhi) and Palam Vihar to NH-8 near Kherki Dhaula while passing through Pataudi Road. It is planned to have 30 m of green belt on both sides. The NPR stretch has been planned as an alternate link road between Delhi and Gurgaon, and is expected to ease the traffic situation on the Delhi-Gurgaon Expressway. Much like Delhi, Gurgaon too will have a Bus Rapid Transit (BRT) corridor to decongest traffic on the Northern Peripheral Road. In several sections, the NPR will have provisions for the BRT corridor to ensure smooth flow of buses.
It is expected to reduce the travel time from west Delhi by half. The new Terminal 3 of the Indira Gandhi International Airport would be accessible within a few minutes’ drive and it would also provide convenient accessibility to the commercial/hotel corridor being developed near the International airport. It would also be close to the 18-hole golf course proposed in Dwarka by the Delhi Development Authority.
Noida-Greater Noida expressway
The Noida-Greater Noida expressway has been built at an estimated cost of INR 4 billion and connects the townships of Noida and Greater Noida. The expressway has six lanes and is 25 kms in length. It starts at Sector- 15A of Noida and ends at the Alpha commercial belt in Greater Noida.
Yamuna Expressway:
Yamuna Expressway stretches over approximately 165 km along the Yamuna river connecting Noida and Agra. The primary objectives of this expressway are to minimize travel time from Delhi to Agra, facilitate faster uninterrupted movement of passenger and freight traffic, connect the commercial centres with the main existing and proposed townships on the eastern side of the Yamuna river and to relieve traffic congestion on the NH-2 (which runs through the cities of Faridabad, Ballabgarh and Palwal) as well as on the Old Grand Trunk Road (National Highway-91). The expressway is intended to serve various commercial, industrial, institutional, amusement and residential projects, which are being developed.
Rapid Metro Rail Gurgaon:
The Rapid Metro is the country’s first Metro rail system launched in November 2014 on a public-private-partnership (PPP) model at a cost of approximately INR 1,100 crore and developed under the tutelage of the Infrastructure Leasing & Financial Services Limited (IL&FS). The first phase of this 5.5 km-long rail system is currently operational and runs from the Delhi Metro’s Sikanderpur station to DLF Phase III. It has an elevated network of six stations, namely Sikanderpur, DLF Phase II, Vodafone Belvedere Tower, IndusInd Bank Cyber City, Micromax Moulsari Avenue and DLF Phase III. Rapid Metro’s train frequency has been synchronized with the Delhi Metro so that waiting time is minimized.
The construction work under Phase-II along the Golf Course road is 35 per cent complete and is expected to be complete by 2016 (Secondary market sources). It will connect Sikanderpur with the thickly populated residential areas of Sector 55 and 56. Also known as south extension, the 7km route will have six stations.
Rapid Metro's Phase III, known as north extension that is in the planning stage, is likely to reach Udyog Vihar and Old Gurgaon. There is also a plan to connect Rapid Metro with Delhi Metro's proposed Gurgaon-IGI Airport line near the Maruti Suzuki Factory located on the Old Delhi-Gurgaon Road.
Source: Rapid Metro Rail Gurgaon official website, Media sources
9
REAL ESTATE OVERVIEW
A. Market Summary
Residential markets across Delhi-NCR witnessed subdued levels of activity in CY2014 as compared to the same period previous year both in terms of new launches and absorption. On a Y-o-Y comparison, new launches dropped by about 23% and stood at around 83,900 units while the absorption dropped by 52% and stood at around 39,500 units in CY2014.
Buyers have shown an interest in cost effective micro–markets such as Greater Noida which accounted for 42% of the total absorption during CY2014 in Delhi-NCR. New launches were majorly concentrated in the mid-segments, in the micro-markets of Noida, Noida Extension and affordable housing projects in Gurgaon. Capital values across most micro-markets of the NCR witnessed a stagnation due to restrained demand levels.
The residential market in Gurgaon witnessed an increase in supply in terms of supply addition, which was mainly concentrated in the emerging micro-markets of Dwarka Expressway, Southern Peripheral Road (Sohna Road) and New Gurgaon. Gurgaon witnessed a significant number of launches in the affordable housing segment as well and accounted for 35% of the new launches in Delhi-NCR in 2014.
Noida remained a priority destination for housing investors from affordable and mid-segment home buyers. During 2014, a large amount of inventory was concentrated in Noida Extension and Yamuna Expressway in the Greater Noida region. Due to comparative affordability and planned development, the absorption levels were the highest in the Greater Noida region at 42% in CY2014 and the developers continued to prefer launching projects in this location.
A considerable amount of unsold inventory and liquidity constraints have compelled developers to keep a check on new launches and focus on project execution by deferring new launches. By December 2014, nearly 2,21,600 residential units remained unsold in the Delhi-NCR market, with an Inventory Overhang (number of months required to exhaust the unsold inventory at the end of a quarter at the sales velocity of that quarter) of 74 months. A lower Inventory Overhang indicates a healthier market. The Inventory Overhang has almost doubled Y-o-Y leading to an unsold inventory which will take more than 6 years to get fully absorbed as of December 2014. It has risen from 38 months in the last quarter of CY2013 to 74 months in the last quarter of CY2014, indicating a weakening market. The slowdown in project launches was a much needed remedy to control further inventory pileup.
Although the NCR market is under an immense pressure because of the unsold inventory, it showed signs of stability in the sentiment of the market with the absorption remaining constant during CY2014 at around 9,000- 10,000 residential units per quarter.
The majority of the recent residential development has taken place in the peripheral micro-markets of Noida, Gurgaon, Ghaziabad and Greater Noida. Delhi has witnessed about 700 new units being launched during CY2014. The Delhi Development Authority’s recent approval of the land pooling policy is expected to unlock nearly 40,000 acres of land in the Delhi market. As per the policy, developers can acquire land directly from farmers who are willing to participate in the process, wherein they get back 40–60% of the developed land. This is expected to act as a cooling measure for property prices in the region.
Source: PropEquity
10
REAL ESTATE OVERVIEW
B. Supply & Absorption Trends:
Source: PropEquity Inventory Overhang (months) = Unsold Inventory at the end of a quarter / absorption in that quarter *Quarters as per Calendar Year
1) On Y-o-Y basis, from CY2013 to CY2014, the real estate activity was sluggish, both in terms of launches and absorption:
a) Supply additions declined by 23% during this period and absorptions shrunk by a substantial 52%, as compared to the corresponding time period of 2013
b) A major share of launches in NCR, approx. 43% corresponds to Greater Noida, followed by Gurgaon with a share of 23%
2) On Q-o-Q basis, Q4 CY2014 remained stable in comparison to Q3 CY2014:
a) New supply additions inched up by a marginal 3%
b) Absorptions decreased by 9%
C. Pricing & Unsold Inventory Trends:
Source: PropEquity *Quarters as per Calendar Year
11
REAL ESTATE OVERVIEW
1) The new launch prices dropped by about 14% during CY2013, primarily skewed down by new launches in the peripheral micro-markets bearing lower average capital values. 2) The average capital values of new launches remained fairly constant in 2014 indicating a slow market due to low demand levels. Stagnant average capital values can also be attributed to some extent to the increased new launches in the peripheral locations of NCR available at affordable price points such as Greater Noida (West), Raj Nagar Extension, Yamuna Expressway etc. 3) The unsold supply build-up inhibited the capital value appreciation. 4) A majority of unsold supply as of Dec’14 corresponds to: a) Greater Noida, which accounts for about 43% of total unsold supply of NCR b) Gurgaon, which accounts for around 23% of total unsold supply of NCR c) Ghaziabad, which accounts for about 18% of total unsold supply of NCR 5) Greater Noida, Ghaziabad and Gurgaon together constitute 84% of NCR’s inventory
D. Micro-market Trends
Source: PropEquity *Unsold Inventory as of December 2013
Source: PropEquity *Unsold Inventory as of December 2014
12
REAL ESTATE OVERVIEW
E. Micro-market Split of Delhi-NCR
1. Micro-market Split (%) of New Launch Supply in CY2014:
Source: PropEquity
2. Micro-market Split (%) of Absorption in CY2014:
Source: PropEquity
3. Micro-market Split (%) of Unsold Inventory in CY2014
Source: PropEquity
13
FACTORS IMPACTING REAL ESTATE
A. Contrasting methods of land acquisition followed by the respective jurisdictions
The Haryana government in Gurgaon allows developers to directly acquire land from farmers. Later, the builder applies for infrastructure support from the government for his project. So here, acquisition is followed by the completion of the project and subsequently, infrastructure support from the government.
However, the Uttar Pradesh government in Noida follows a different model. Here, the government directly acquires land from the farmers. Following this, it draws a plan in terms of infrastructure support for the area and earmarks the plots accordingly. The last stage involves auctioning the plots to builders. So, infrastructure support comes before the residential project.
The real estate and infrastructure developments are a lot more planned in the latter as compared to the former, largely owing to the acquisition norms followed.
B. Infrastructure Challenges
Gurgaon’s infrastructure challenges in terms of water, power and roads are a cause of concern. There is significant supply that has been launched, but the city lacks proper amenities to support the new supply. Compared with Noida, the degree of planning and road connectivity in Gurgaon appears to be low, which is one of the consequences of the model of land acquisition followed by the government.
However, in Gurgaon properties sell on the basis of their location, irrespective of whether the plan has actually been implemented. The reason for this is that if the investor waits for the basic amenities to reach the property, one would miss out on the opportunity to cash in on the appreciation in the property value. In this micro-market, the future prospects very much based on the notion of future development with respect to infrastructure.
On a relative basis, the infrastructural scenario seems to be better in Noida. The metro has penetrated till Sector- 50, with the end station being ‘Noida City Center’ and is planned for an extension to Greater Noida. Road connectivity is also good with Delhi-Noida-Delhi (DND) Expressway giving easy access to Delhi and Greater Noida.
C. Unsold Inventory:
The NCR has a total of about 221,600 apartments (Source: PropEquity) of unsold residential real estate by the end of CY2014. At the pace of sales of Q4 CY2014, this stock requires another 74 months to be completely sold off.
Apart from the size of the unsold inventory, the other cause of concern is that most of the unsold real estate in NCR is in areas which are currently uninhabitable. Thus, while the residential units have come up, the essential infrastructure such as roads, sewage systems, or water connections have not been taken care of. For instance, several projects were launched in Dwarka Expressway but the work on the Expressway has not yet been completed, though some builders are close to giving possession to buyers.
The NCR real estate market comprises of over 50% investors which has been one of the primary reasons for contributing towards the unsold inventory as it has led to the builders to continue launching new projects over the last few years without giving much consideration to the location and infrastructure amenities available for the buyers.
14
NORTHBANGALORE DELHI RESIDENTIAL REAL ESTATE: SOUTH
Major Locations: Delhi Gate, Kashmere Gate, Darya Ganj, Model Town, Pitampura, Rohini, Ashok Vihar, Civil Lines and Kamla Nagar
Key Highlights
Civil Lines, Rajpur Road and Mall Road are some prime localities of North Delhi, typically dotted with old bungalow style developments. The governor's residence and the old secretariat are located in this region. North Delhi houses some of the old prominent buildings like the Red Fort and the Jama Masjid, which are often frequented by the tourists. The esteemed University of Delhi's North campus is located in this region. The rental markets of the surrounding locations such as Kamla Nagar, Mukherjee Nagar, Model Town, etc. witness decent traction on account of huge demand for student accommodation. The region is famous for old traditional shopping arcades in Darya Ganj, Sadar Bazaar, Kamla Nagar, Karol Bagh and Chandni Chowk. It predominantly witnesses secondary market transactions. However, Unity developers had launched a project in Kishanganj location of this region in 2014. The available units in these projects at the primary markets sell in the range of INR 10,000 - 15,000 / sq. ft. This zone witnessed the first underground Metro connectivity from Delhi University to central Delhi. The connectivity has been extended and currently covers the stretch from Jahangirpuri (North Delhi) to Gurgaon via South Delhi. In terms of organised retail, the region witnesses a significant number of malls, spread across the entire Northern region. Key malls include Unitech Metrowalk, Emaar MGF Mall and M2K Mall at Rohini, DLF City Center at Shalimar Bagh and M2K mall at Pitampura.
Growth Stimulators
Well-connected to other parts of the city through well-planned roads. Delhi Metro network offers good connectivity within the city and its suburbs. The region is also well- connected to new/old Delhi railway stations and IGI Airport through Delhi metro network and the Airport Expressway network. Close proximity to Inter State Bus Terminus (ISBT), New and Old Railway stations and central business districts like Connaught Place and Karol Bagh.
Property rates of units in prime residential markets of North Delhi **
Average Capital Value Average Rentals for 2 BHK Location (INR/sq.ft.) (INR/month) Pitampura 15,000 - 18,500 18,000 - 22,000
**Indicative mid-market segment
Source: ICICI Property Services Group
15
EAST DELHI
EAST
Major Locations: Preet Vihar, Mayur Vihar, Pushpanjali Enclave, Anand Vihar, Patparganj, Lakshmi Nagar, Gandhi Nagar, Vivek Vihar and Shahadara.
Key Highlights
East Delhi refers to the areas located beyond Yamuna or Trans-Yamuna, near Uttar Pradesh border. It is well connected to Noida and Ghaziabad suburbs. The residential real estate is a mix of Delhi Development Authority (DDA) apartments and independent houses. The region is predominantly inhabited by the middle-income working class. Mayur Vihar, Preet Vihar, Vivek Vihar, Anand Vihar, Gagan Vihar, Yamuna Vihar and Pushpanjali Enclave are some of the up-market residential areas of East Delhi. Mayur Vihar is strategically located adjacent to Noida. The location is emerging as a commercial hub. Common Wealth Games-2010 took place at East Delhi, near the famous Akshardham shrine. Anand Vihar railway station and Inter State Bus Terminus (ISBT) are located at Anand Vihar in East Delhi. Crowded with combination of small and big shops, this place is considered to be one of the commercial centers in Delhi. Emaar MGF had launched its residential project 'Common Wealth Games Village' under a joint venture development model with DDA in this region.
Growth Stimulators:
Delhi Metro network has significantly improved connectivity with other locations in the city and its suburbs. The Common Wealth Games-2010 hosted in this region have boosted infrastructural development to a great extent. Development in terms of improved and widened road network has changed the face of the old cramped development.
Property rates of units in prime residential markets of East Delhi **
Average Capital Value Average Rentals for 2 BHK Location (INR / sq. ft.) (INR / month)
Preet Vihar 16,000 - 20,000 25,000 - 30,000
Vivek Vihar 12,000 - 15,000 22,000 - 25,000
Mayur Vihar 11,000 - 12,500 20,000 - 22,000
Patparganj 10,000 - 12,500 17,000 - 20,000
Laxmi Nagar 8,500 - 10,500 10,000 - 15,000
**Indicative mid-market segment
Source: ICICI Property Services Group
16
WEST DELHI
Major Locations: Pashchim Vihar, Punjabi Bagh, Vikaspuri, Janakpuri, Raja Garden, Tagore Garden, Rajouri Garden, Subhash Nagar, Mansarovar Garden, Ramesh Nagar, Kirti Nagar, Hari Nagar and Dwarka
Key Highlights
The residential real estate landscape typically comprises of independent houses/ bungalows. Raja Garden and Kirti Nagar are known for marble and furniture markets respectively. Dwarka is located towards the south-west of Delhi. It is in close proximity to the domestic and international airports. A total of 29 sectors exist in the subcity. The development in this region is carried out by either DDA or Group Housing Societies. Residential real estate is typically dotted with 9-11 storied apartments/ floors. Dwarka has a planned and well-connected road network spread across its sectors and adjoining locations. It is bounded by NH-8, Outer Ring road, Najafgarh road, Pankha road and the Rewari Railway line. The under-construction Dwarka Expressway shall provide better connectivity to Gurgaon. The region is well- connected through the Delhi Metro network. A total of 10 metro stations exist in Dwarka, the highest in any colony of Delhi. The Sector-21 Delhi metro station of Dwarka is also linked with the Reliance Airport Express Metro line, which runs up to the international airport. Delhi's second diplomatic enclave (the first being at Chanakyapuri) is planned to come up in Dwarka. Almost all micro-markets have shopping arcades. City Square, West Gate, TDI mall and Paragon mall are located at Rajouri Garden. Pacific mall and Eros Metro mall are located in Subhash Nagar and Dwarka respectively. Approximately 15 malls are located in the western region.
Growth Stimulators
The region is well-connected through the metro and has well-planned roads to various parts of the city. Delhi Metro connectivity has boosted the real estate potential (especially in Dwarka) to a significant extent. West Delhi encompasses all public amenities like good schools, hospitals, shopping destinations, etc.
Property rates of units in prime residential markets of West Delhi**
Average Capital Value Average Rentals for 2 BHK Location (INR/sq.ft.) (INR/month) Janakpuri 12,500 - 15,000 13,500 - 16,500
Paschim Vihar 12,000 - 14,500 14,000 - 16,500
Vikaspuri 10,000 - 13,000 13,500 - 15,500
Dwarka 8,000 - 12,000 12,000 - 15,000
**Indicative mid-market segment
Source: ICICI Property Services Group
17 SOUTH DELHI
Major Locaions: Greater Kailash – (I, II, III), Defence Colony, Anand Lok, South Extension, C.R. Park, Green Park, Hauz Khas, Safdarjung Development Area, Safdarjung Enclave, Panchsheel Park, Nehru Place, Saket, Golf Link, Chanakyapuri, Jor Bagh, New Friends Colony, Maharani Bagh, Lajpat Nagar, Kalkaji, Vasant Vihar, Vasant Kunj, Anand Niketan, Shanti Niketan and West End
Key Highlights
South Delhi real estate landscape is primarily dotted with prime residential properties. Major government offices and embassies/consulates are located in the southern part of Delhi. Marked with upscale locations such as Greater Kailash, Anand Lok, Vasant Vihar, Anand Niketan, Hauz Khas, Defence Colony, New Friends Colony, Gulmohar Park, etc., this micro-market offers highest land prices after the Lutyen's Zone of Delhi. The average ticket size of residential floors in the primary markets varies in the range of INR 4.5 - 15 crores. Demand for properties has witnessed a dip on account of weak economic scenario and interest rates. Hence, certain builders under the pressure to sell are willing to negotiate. The primary and resale markets of certain category-A locations have witnessed declining sales because of multiple and considerable increase in the circle rates in the past few months. The region has a developed infrastructure in terms of both connectivity and social amenities. South Campus of the University of Delhi is located in this part of the city. Reputed research and education institutes such as IIT Delhi and AIIMS are located in this region. Heritage monuments like Qutab Minar, Purana Quila and Humayun Tomb are famous tourist destinations located here. Nehru Place is a commercial hub witnessing presence of various corporate/ MNC offices. Lajpat Nagar is a mix of commercial and residential development. Organised Retail: Approximately 17 malls are located across the entire region. Aarone Select City Walk, DLF Place, MGF Metropolitan, Ansal Plaza, Ambience mall, DLF Promenade and DLF Emporio are the key malls located in this region witnessing modest foot-falls throughout the week. DLF's super luxury projects, King's Court and Queen's Court, are located in Greater Kailash-II of this region.
Growth Stimulators
Good connectivity through wide and well-planned roads. Many important city roads such as Mehrauli- Gurgaon Road, Mehrauli-Badarpur Road, Aurobindo Marg, August Kranti Marg, Press Enclave Road, etc. fall in this region, while arterial roads like Inner Ring Road, Outer Ring Road and NH-2 pass through it. Well connected through the Metro rail network with the other parts of city and suburbs. The Delhi Metro Rail Corporation (DMRC) has proposed a 103.93 km-long corridor in its Phase-IV project to connect areas in West Delhi to South Delhi.
Property rates of units in prime residential markets of South Delhi **
Average Capital Value Average Rentals for 3 BHK Location (INR/sq.ft.) (INR/month) Anand Lok 45,000 - 55,000 90,000 - 1,40,000
Vasant Vihar 28,500 - 37,000 65,000 - 1,00,000
Greater Kailash - I, II 27,500 - 36,000 60,000 - 80,000
Saket 23,500 - 28,000 45,000 - 65,000
**Indicative mid-market segment Source: ICICI Property Services Group
18 GURGAON (MASTER PLAN 2031)
19 GURGAON
Overview Based on geographical location and the similarity of growth drivers, we have classified Gurgaon real estate market into three segments. The first segment looks at locations adjoining the Southern Peripheral Road. The second segment consists of sectors adjoining Manesar, bounded by the Northern Peripheral Road (Dwarka Expressway) and NH-8. The third segment looks at sectors of Gurgaon aligned with the under-construction Dwarka Expressway (or the Northern Peripheral Road). The analysis also covers some of the peripheral locations of Gurgaon, such as Sohna, Neemrana, Dharuhera and Bhiwadi.
Major Locations: Golf Course Road, Golf Course Extension Road, Sohna Road, MG Road, NH-8, Gurgaon- Faridabad Road (Locations adjoining the Southern Peripheral Road)
Key Highlights:
This belt has predominantly matured and witnessed subdued market activity. Absorption levels trickled down by 70% for CY2014 in comparison to the same period last year. However, new launches have increased by 67% during the same period thus hinting the future growth potential of this micro-market. While Golf Course Road remains the most premium priced location, other locations of Gurgaon have also reached high price levels. Golf Course Road has now become a matured micro-market both in terms of primary transactions and new launches. The capital values have essentially remained stable in CY2014. Average residential property prices at this location vary between INR 11,000 - 15,000 / sq. ft. with the exception of DLF Magnolias and DLF Camellias priced between 25,000 - 30,000 / sq. ft. Golf Course Extension Road has witnessed a significant number of new launches in CY2014, but the absorption dropped by 78% in CY2014 compared to the same period last year. Prices have largely remained stable with residential properties available at approximately INR 8,000 - 14,000 / sq. ft. in the primary markets. The Golf Course Extension Road and Sohna Road have witnessed traction from buyers due to the good occupancy rates in the surrounding areas and a robust social infrastructure such as schools, hospitals, etc. in the vicinity of these areas. Gurgaon-Faridabad Road is a 25 km road stretch, starts near the SPR patch in Gurgaon and extends to Faridabad. This upcoming location near Aravali Hills is planned to be a low density area. Hence, builders have launched larger sized units of approximately 4000 sq. ft. and above. Premium properties in this micro- market are priced in the range of INR 11,000 - 18,000 / sq. ft. (Average Price INR 12,000 / sq. ft.). Sohna Road stretch witnessed an increase of 21% in new launches in CY2014 but lower absorption levels in comparison to the same period last year, in line with the overall sentiment of the market. Mehrauli-Gurgaon Road (MG Road) has a fair amount of organized retail development and office spaces. Predominantly commercial in nature, this road is also dotted with some residential development. This entire region is favoured by good retail and office development. There are 17 operational shopping- malls, primarily located on the MG Road, DLF phases and the Golf Course Road. DLF, Ansal and Unitech had major land banks since the initial development phase. However, currently many other reputed developers such as IREO, Tata Housing, Emaar MGF, Vatika, Paras Group, etc. are present. Source: PropEquity
Growth Stimulators: Good connectivity from the southern part of New Delhi through MG Road and the six-lane NH-8. The presence of huge employee base operating from commercial developments, IT/ITeS spaces and Cyber Parks is expected to keep the residential demand robust. Availability of organized retail and good residential supply makes it an attractive location. Existing metro connectivity from Delhi, Noida to MG Road and HUDA City Center, Gurgaon. Moreover, the Gurgaon Rapid Metro (integrated with Delhi metro) is expected to further enhance the connectivity between the residential and commercial sectors in this belt as a part of its Phase-II and Phase-III extension plans. Measures are being taken to ease the traffic flow by planning new inter/intra city roads. 20 GURGAON
Property rates of units in prime residential markets of Gurgaon **
Location Capital Values (INR/sq.ft.) Rental Values for 2 BHK (INR/month) Golf Course Road 11,000 - 15,000 45,000 - 1,25,000 (3, 4, 5 BHK) MG Road 11,000 - 15,000 35,000 - 80,000 (3 BHK) Golf Course Extension Road 8,000 - 14,000 20,000 - 30,000 NH-8 7,500 - 13,000 35,000 - 40,000 (3 BHK) Sohna Road 6,000 - 10,000 15,000 - 25,000
**Indicative mid-market segment Source: ICICI Property Services Group
Major Locations: Gurgaon sectors adjoining Manesar
Key Highlights:
This region encompasses the Gurgaon sectors adjoining Manesar, bounded by Dwarka Expressway and the NH-8. The prevailing residential property prices in this micro-market fall in the bracket of INR 4,200 – 8,000 / sq. ft. This part of Gurgaon is still under metamorphosis and has huge real estate potential because of its proximity to Manesar as well as the developed Gurgaon. As against the general trend in Gurgaon of roads being developed post the project construction, this region often known as 'New Gurgaon' has witnessed marked improvement in road networks, way before project construction. The old urbanization boundary as per the Gurgaon-Manesar Master Plan-2025 has been extended in the latest Gurgaon-Manesar Master Plan-2031. Consequently, sectors 88A, 88B, 89A, 89B, 95A and 95B have been added to the urban real estate development map as residential and public utilities sector. These sectors are located on the land plot that was previously earmarked for SEZ. In terms of the configurations, the sizes of the units are smaller in comparison to the units coming up in areas adjoining the Southern Peripheral Road such as the Golf Course Extension, typically lying in the range of 1700-2400 sq. ft. The total new launch supply in this sub-market increased by 85% in CY2014 vis-à-vis the same period previous year. However, the absorption levels have gone down by 61% in the same span hinting a lack of interest of the buyers, due to a lack of pace in the development of IMT Manesar as an industrial and an IT hub. Prices of available stock have witnessed a correction of about 25% Y-o-Y in Q4 CY2014, primarily due to the majority of the new launches occurring in the lower price band in CY2014. Unsold inventory by the end of CY2014 stood at ~8,750 units, which is significantly higher than the inventory of ~4,600 units at the end of CY2013. The adjoining location Manesar, is the Industrial and IT hub hosting many global leading brands such as Honda, Toyota, Mitsubishi, Suzuki, Maruti, Hero Motors, Samsung Telecommunications, Frigo Glass, HCL, etc. which will act as a driving force for this micro-market. Key developers in this micro-market include DLF, Vatika Group, 3C, Emaar MGF, Anantraj, Godrej, Uppal, Vipul, Bestech and Raheja. Source: PropEquity
Growth Stimulators: The presence of leading industries, corporates and IT companies would lead to employment generation, hence keeping the residential demand robust. Widening of existing two-lane Pataudi Road to 135 meters offers better and smooth connectivity and hence mitigates traffic congestion. Moreover, the construction of 60 meters wide inner sector roads would offer
21 GURGAON
good connectivity in this part of Gurgaon. Kundali-Manesar-Palwal (KMP) Expressway once operational, shall mitigate the heavy traffic congestion on the Delhi-Gurgaon Expressway. NH-8 and the upcoming Northern Peripheral Road are expected to further improve connectivity with other parts of Gurgaon and Delhi.
Property rates of units in prime residential markets of sectors adjoining Manesar** Location Capital Values (INR/sq.ft.) Sector 81, 81A, 82, 82A, 83, 84 5,750 - 8,000 Sector 76, 77, 78, 80 5,000 - 7,875 Manesar 4,500 - 5,000 (secondary market) Sector 86, 90, 91, 92 4,200 - 7,250 **Indicative mid-market segment Source: ICICI Property Services Group
Major Locations: Gurgaon sectors aligned with Dwarka Expressway
Key Highlights:
Dwarka Expressway (or Northern Peripheral Road) is an 18 km long and 150 wide road stretch, which is undergoing civil works. The road stretch is set to provide an alternate link between Gurgaon, Manesar and Delhi. Precisely, it would connect Dwarka Phase II (New Delhi) and Palam Vihar to NH-8 near Kherki Dhaula. The Expressway project is being developed under the public private partnership (PPP) model and the tender for its development was awarded to Indiabulls in March 2011. The construction commenced in April 2011. Currently, a major part of the expressway is complete; however civil work is pending on certain patches of about 4 km, which are stuck under litigation. Key reason for the litigations were acquisition challenges because of plots/houses of more than 250 private owners on this expressway alignment. The 150 meters expressway is expected to be one of the widest roads in India (the Delhi-Gurgaon expressway is 75 meters wide). Apart from this, the inner sector roads are planned to be 60-75 meters wide along the expressway and 90 meters wide in Dwarka phase II (Delhi). This framework would ensure congestion-free connectivity with most locations in Gurgaon and Dwarka. Moreover, the proposed metro rail connectivity adds on to the future infrastructure. As per the Gurgaon Master Plan 2025, while most of the sectors aligned with NPR have been planned for residential development, few areas are earmarked for a mix of commercial and industrial development in sectors 114, 3A and certain parts of sectors 106, 109 and 112. The market touted as an affordable location two years back, has reached high price levels. The market has seen a good appreciation in its capital values which have almost doubled in the past 4 years but has followed a downward trend in CY2014. The prevalent rates of the residential units fall in the range of approximately INR 5,500 - 10,500 / sq. ft. By the end of CY2014, the region had approximately 11,250 unsold residential units, which is 40% higher than the end of CY2013. Thus, the buyers in this investor-driven micro-market are facing a limited scope of exit which is expected to improve in future. Predominant developers here are BPTP, Uppals, Indiabulls, Raheja, Paras, Ramprastha, Mahindra Life Space, Chintels and Sobha.
Source: PropEquity
22 GURGAON
Growth Stimulators:
Good connectivity and proximity to the West Delhi region, Indira Gandhi International Airport and various Gurgaon locations via this under-construction expressway is one of the key growth drivers. Once operational, the expressway is expected to decrease the travel time to west Delhi by half and the Indira Gandhi International Airport would be accessible within a few minutes’ drive. While there is a metro connectivity proposed for future, there is an existing metro connectivity in Dwarka and the metro station at and metro station at Dwarka Sector-21 is a few kilometers away from the expressway. The proposed Diplomatic Enclave in Dwarka Phase-II, with numerous planned embassies (this would second to the one at Chanakyapuri, Delhi) would further strengthen the demand dynamics in the area. As mentioned earlier, patches of land across this region have been earmarked for commercial development. This planned commercial development and existing commercial market in Gurgaon is set to support the residential demand in the region. In order to ease the traffic flow, HUDA had also planned to develop four new flyovers in this region. The flyovers would be constructed at the intersections of the Pataudi Road near Sector 88, Farrukhanagar Road near sectors 100 and 101, Daultabad Road near sectors 104 and 105 and another road crossing NPR near sectors 110A and 111. (Secondary Market Sources) While there is a decent existing infrastructure of schools, shopping centers, hospitals in Palam Vihar, Gurgaon and Dwarka, which are close to the expressway, this region is expected to have proper civic infrastructure including better sewage and power distribution systems. The planned 30 m wide green belt on both sides of the expressway would make the region environment- friendly. Property rates of units in prime residential markets of sectors near Dwarka Expressway** Location Capital Values (INR / sq. ft.) Sector 110, 110A ,111, 113 6,200 - 10,500 Sector 105 to 109 4,800 - 8,500 Sector 99 to 104 4,500 - 8,500 Sector 37 D 4,750 - 5,500
**Indicative mid-market segment Source: ICICI Property Services Group
Cluster 1: Golf Course Road, Golf Course Extension Road, Sohna Road, MG Road, NH-8, Gurgaon-Faridabad Road (locations adjoining the Southern Peripheral Road) Cluster 2: Gurgaon sectors adjoining Manesar Cluster 3: Gurgaon sectors along Dwarka Expressway
Source: PropEquity Note: Graph represents weighted average price of residential units available in the primary market. *Quarters as per Calendar Year
23 PERIPHERAL LOCATIONS OF GURGAON
A. Bhiwadi:
Key Highlights and Market Drivers: Bhiwadi is located in the Alwar district of Rajasthan, and is an emerging industrial destination in the NCR region. Broadly, this town lies between the metropolitan cities of Gurgaon and Jaipur. It is located on the border of Rajasthan and Haryana and lies adjacent to Dharuhera town and Rewari city of Haryana. The town is spread over nearly 5,300 acres, comprising of around 2,500 large, medium and small-scale industries. They include industries like steel, furnace, electronics, engineering, textiles, pharmaceuticals, printing, cables, rolling mills, food processing, herbal care units, etc. Bhiwadi is primarily driven by the industrial sector having a majority of automobile industries functioning in the manufacturing centres of Chopanki, Khushkhera and Tapukhera. RIICO (Rajasthan State Industrial Development and Investment Corporation) has been instrumental in the industrialisation of Bhiwadi, since 1975. Hence, with passage of time, employment in agricultural activities is declining and increasingly shifting to industrial and service sector activities. By virtue of its location along NH-8 and the Delhi-Jaipur corridor which is seen as a future megalopolis, it has been identified as an investment zone of Delhi-Mumbai Industrial Corridor (DMIC) and made a part of national level planning and development efforts. The city has witnessed an upsurge in real estate activity over the past three-four years with a huge amount of supply coming into the market during this period. This region has witnessed good number of new launches during CY2013, after which the new launches have fallen dramatically during CY2014, falling by 77% Y-o-Y. (Source: PropEquity) Residential absorption has reduced by ~43% Y-o-Y during the CY2014 in comparison to the same period last year. The unsold stock has also decreased by ~8% during the same period thus hinting that the market is biased towards equilibrium with the new launches falling more than the absorption rates. (Source: PropEquity) Market demand is largely driven by local and neighboring regions such as Manesar. A lot of investor demand also comes from other regions in Delhi-NCR and Rajasthan, as residential units in this belt are still affordable. The capital values in Bhiwadi typically lie in the range of INR 2,500 - 3,000 / sq. ft., with the average prices of available units in the primary market have remained stable for the past 2 - 3 years. Apart from rapid residential development, Bhiwadi is also witnessing growth in retail and office spaces. For instance, Bhagat Singh Colony – the prime residential area of Bhiwadi – is also turning into a retail and commercial nerve centre. V Square Mall, located on Bhiwadi-Alwar Highway, is a multiplex-cum-shopping mall in the city. The mall-cum-office complex Sky View Tower, BB Mall and Ganapati Plaza are upcoming developments on the retail real estate front in this region. The proposed Bullet train and Metro connectivity will further enhance Bhiwadi’s real estate investment attractiveness quotient putting it firmly on the radar of property investors. Key developers in the region include Avalon, Nemai, Terra City, M2K, Cosmos, Essentia, Omaxe, Kajaria and Krish.
Source: PropEquity Note: Graph represents weighted average price of residential units available in the primary market. *Quarters as per Calendar Year
24 PERIPHERAL LOCATIONS OF GURGAON
B. Sohna:
Key Highlights and Market Drivers Sohna is a tehsil of the Gurgaon district in Haryana. The area is bounded by low lying pockets of land on the north, by-pass to Gurgaon-Sohna-Alwar road on the east, Aravali ranges on the west, and forest land on the south. Due to topographical conditions of the area around Sohna, the suitable land for the development lies in the north-east, east and south-east of existing Sohna town. Sohna Master Plan 2031 was notified in 2012 by the TCP Haryana, for the planned development of the region. This plan caters to the projected population of 6.4 lac. The master plan notified 6,110 hectares in 38 sectors divided across various zones with residential density of 300 persons per hectare. While 28% of the area is notified for the residential development; 4% and 20% of the total area would be dedicated for commercial and industrial development, respectively. This real estate market is likely to benefit from its proximity to Delhi-Mumbai Industrial Corridor (DMIC) and Kundali-Manesar-Palwal (KMP) corridors. The Dedicated Freight Corridor (DFC) linking Delhi to Mumbai passes close to the southeastern side of Sohna will give a boost to the overall development of the area. This region has witnessed a significant number of new launches during CY2014 with ~8,600 residential units being launched in this period, but the number of residential units absorbed has been lower than the pace of new launches because this region is still in a very early stage of development. (Source: PropEquity) The capital values in Sohna typically lie in the range of INR 3,500 - 4,500 / sq. ft., and the capital values have been almost stagnant in the past one year. Proximity and a good connectivity to the prime Southern Peripheral Road/Golf Course Extension Road belt in Gurgaon make it an attractive investment destination. The region is also well-connected to the NH-8. Additionally, focus on improving inter/intra-city connectivity would benefit the entire region. Sohna will be provided with better and faster connectivity to Delhi and Faridabad. In this regard, the master plan has proposed a 150 metre-wide Gurgaon Extension Road which will directly connect to the existing Golf Course Extension Road, from Sectors 63 and 64, Gurgaon. The region would also benefit from the industrial development planned in the city. An Industrial Model Town IMT Sohna is set be a big industrial hub on the belt, similar to IMT Manesar and IMT Rohtak. Other facilities close to the developing Sohna region include GD Goenka Education City, K R Mangalam University, Apeejay Satya University, Westin Sohna Resort, and MMTC Pamp Gold Refinery listed among the Top 5 largest refineries in the world). It is already well known for its natural sulphur springs and Damdama Lake. This is an emerging region, which has evolved as an investment destination essentially in the past one year. Leading developers such as Raheja Developers, IREO, Gold Souk, Avlon, Central Park, Tata Reality, Godrej Properties, MVL, Universal, ILD, Parsvnath, Paras, Homestead, etc, have already started acquiring land banks in the area and those with SEZs are planning land-use change once it is approved in the New Gurgaon-Sohna Master Plan, 2031.
Source: PropEquity Note: Graph represents weighted average price of residential units available in the primary market. *Quarters as per Calendar Year
25 PERIPHERAL LOCATIONS OF GURGAON
C. Dharuhera:
Key Highlights and Market Drivers
Dharuhera is a town in Rewari District of Haryana. Considered a part of the Delhi-NCR, the region has emerged as an affordable real estate destination in the past few years. It is strategically located on the junction of NH-8 and SH-28 leading to Palwal. It is the gateway to the Delhi-Mumbai Industrial Corridor. Leaving aside the rural belt, there are a total of 25 sectors in Dharuhera, out of which three sectors - 4A, 6-I and 6-II, have been sold to individual buyers by the Haryana Urban Development Authority (HUDA). These sectors have almost 85% occupancy. In the other sectors, there are either industries or private developers who have come up with new residential and commercial projects. This belt has witnessed a stagnation in property values Y-o-Y over the past two calendar years. The residential units available in this comparatively affordable belt are priced in the range of INR 2,500 – 3,500 per sq. ft. Dharuhera has the advantage of good connectivity as it lies very close to NH-8 and lies at a distance of about 20 kms from Manesar. Maximum off-take of units is the price range of INR 20 lacs to INR 40 lacs and the most preferred configuration is the 2-BHK configuration. About 25,000 units will be available in the next 2 years for sale. At present, there are more investors than end- users with the investors to end-users mix being pegged at around 70:30 respectively. The region has witnessed subdued real estate activity. It has not witnessed any new launches for the past one year and ~2,000 units are present as unsold inventory. The absorption levels have fallen by 71% Y-o-Y during CY2014 in comparison to the same period last year. (Source: PropEquity) Residential demand largely comes from local end-users or investors from neighboring regions of NCR, seeking affordable options such as Manesar, Bhiwadi etc. The town benefits from its strategic location on the NH-8 and consequently enjoys good connectivity from Gurgaon and other neighboring regions. Apartments in Dharuhera are available at affordable prices and can be favorably compared with Noida Extension and Sonepat, which are also satellite cities in and around NCR. Dharuhera town is a part of DMIC and the Dharuhera industrial estate is located along a patch on the NH-8. Manufacturing plants such as Delphi Automotive Systems, Hero MotoCorp Ltd., India’s biggest dairy plant Amul, Carlsberg beer factory, Lumax Industries Ltd., Harley Davidson, Ray Ban, Asahi Glass, and Rico Auto Industries have set up their industrial units here in the last decade. Key developers in the region include Bestech, Vipul, Piyush, Avalon, Parsvnath, Raheja, Avalon and Dwarkadhish.
Source: PropEquity Note: Graph represents weighted average price of residential units available in the primary market. *Quarters as per Calendar Year
26 PERIPHERAL LOCATIONS OF GURGAON
D. Neemrana:
Key Highlights:
Neemrana is an ancient historical town situated in Alwar district of Rajathan at a distance of 122 km from Delhi on the Delhi-Jaipur highway in Behror tehsil. Some of the advantages associated with Neemrana that will be important driving factors for the area in terms of its future growth and development as an industrial hub are:
o Easy accessibility through NH-8
o Proximity to Delhi and Haryana
o Proximity to the Dedicated Freight Corridor’s (DFC) Nodal station of Rewari
o New Multimodal Logistic Park near Kathuwas Railway station sanctioned by the Container Corporation of India (CONCOR).
o Neemrana lies along Phase-I of the Delhi-Mumbai Industrial Corridor.
o Proximity to the other industrial belts of Bawal, Rewari, Daruhera, Manesar and Gurgaon of Haryana and Bhiwadi, Chopanki, Pathredi, Khushkhera and Tapukara of Rajasthan will further propel its growth.
The industrial zones dedicated for the Koreans is coming up in Ghilot in Neemrana and the Japanese zone is already present in Neemrana which has attracted heavy industrial investments from Japanese manufacturing firms such as Nippon, Daikin, Nissan, NYK Logistics and Mitsui Chemicals, will be important growth drivers for the region. The Export Promotion Industrial Park (EPIP) is also being developed by the Rajasthan State Industrial Development and Investment Corporation (RIICO) in several phases which will further propel this region’s emergence as a major industrial hub. With industrial growth acting as a pull factor for this micro-market, real estate development across Neemrana's various segments will find increasing traction going forward. The housing demand from people employed in these industries is likely to rise as more industries flock towards this industrial hub. This provides Neemrana with the attributes of a preferred real estate investment destination offering low entry points and high appreciation potential. Residential prices in this market range from INR 2,800 - 3,200 per sq. ft. and give an indication of healthy rise in future. It is a market which is expected to be beneficial for long-term investors. The total unsold inventory in this micro-market is pegged at around 2,040 units with an inventory overhang of 23 months. (Source: PropEquity)
Source: PropEquity Note: Graph represents weighted average price of residential units available in the primary market. *Quarters as per Calendar Year
27 NOIDA (MASTER PLAN 2031)
28 NOIDA
Key Highlights: NOIDA (New Okhla Industrial Development Area), spread over an area of 20,316 hectares, is under the management of the New Okhla Industrial Development Authority having a balanced combination of industries and habitation with good infrastructural facilities. Noida is bounded by NH-24 in the North, River Hindon in the East, River Yamuna in the West and the meeting point of rivers Hindon and Yamuna lies in the south. It is located in close proximity to the national capital of Delhi and some major cities of Uttar Pradesh. Noida was traditionally an industrial hub, but a planned layout turned it into an IT hub in mid-2000s. As an industrial hub, Noida experienced residential and retail developments as a part of its planning. However, the surge of IT industry in this market changed the prospects of Noida as it experienced large scale infrastructure developments along with overall real estate developments. Sectors 15, 16, 19, 40, 41, 44, 50, 51, 52 are prime residential sectors. This cluster is a matured market and there have been almost no new launches over the last couple of years. Availability of inventory in this region is almost negligible. The belt encompassing sectors 71-79 has witnessed some traction, and properties here are priced in the range of INR 5,000 - 5,500 / sq. ft. Residential absorption has dropped by 36% Y-o-Y in CY2014. However, average capital values of available unis has declined by ~5% Y-o-Y. (Source: PropEquity) Noida-Greater Noida Expressway: Sectors 93, 96, 97, 98, 100, 110 and 126 to 131 (Jaypee Greens) and further to 151, which are aligned with the Noida Expressway are upcoming residential sectors. Residential absorption dropped by ~40% Y-o-Y in CY2014, however the new launches increased ~20% Y-o-Y in 2014 hinting that the developers are optimistic about the future growth prospects of this market. (Source: PropEquity) The sentiment in the Noida market has been subdued because of the deliveries not happening as per schedule. But the deliveries are expected to start in another year’s time which will have significant positive impact on the sentiment of the market with the occupancy rates starting to rise in this area. Gauging these expectations, the Noida Authority has also started working on the last mile infrastructure developments such as electrification, water supply, roads etc. Low price points is a favorable factor for entering the Noida real estate market as this market is expected to get good appreciation and returns on investments. The realty market in Gurgaon has now crystallized into a one of the most favorable for buyers in the premium segment. Commercial development is spread across many sectors, but Sector 18 has been developed as a full-fledged commercial and retail centre, witnessing presence of many leading brands and reputed hotels. The major malls operational in Noida are Unitech's Great India Place, Centre Stage, Supertech Shopprix, Sab mall and Spice World Mall. Unitech and DLF are coming up with new high-end malls in Noida. Developers like Prateek Group, Wave Infratech, 3C Company, Supertech and Lotus Greens have launched super-luxury projects with 3 - 5 BHK apartments of 2,000 - 4,000 sq. ft. priced in the range of INR 1 crore to INR 3 crore in this market.
Growth Stimulators:
The Metro rail is expected to further penetrate into various other parts of Noida as the Delhi Metro Rail Corporation (DMRC) and the Noida Authority had recently signed an agreement for the construction of a Metro Link from Noida City Centre to NH-24. The 6.675-km link between City Centre Metro station in Sector 32 and Sector 62 will be instrumental in boosting the connectivity to Noida as it will allow commuters to reach NH-24 without difficulty. It is expected to be completed in 3 years. The proposed route is expected to have six elevated stations at Sectors 34, 52, 59, 61, 62 and Electronic City at NH-24. The proposed Jewar airport will give a major boost to the real estate market for this region as the proximity to the airport will be an important driver for the real estate. Noida has good connectivity, well planned wide roads and well developed social infrastructure. Delhi-Noida- Delhi (DND) Flyover, an 8-lane expressway connects Noida and Delhi. Yamuna Expressway connects Noida to Agra via Mathura. Noida is well connected to Delhi (Noida City Center to Sector 21, Dwarka) and Gurgaon through the existing Metro. Proposed improvements in the roads network: Six-laning of NH-24 from Delhi Gate to Dasna and eight-laning from Dasna to Delhi-UP border is planned to ease the traffic flow. A Faridabad-Noida-Ghaziabad (FNG) corridor is also planned to ease the traffic flow to Delhi. Noida City Center is being developed on a 99-hectare plot, with facilities like big offices, cultural centres, 29 NOIDA
multiplexes, five star hotels, residential blocks and much more. Noida also has an 18-hole Golf Course of International Standards. The proposed extension of the Noida City Center-Dwarka metro route to Pari Chowk by 2021 will give direct connectivity to Delhi and other NCR areas. Major upcoming projects such as the Taj Economic Zone and the Export Promotion Zones along the Yamuna Expressway are expected to further enhance the economic development of this region, consequently giving a boost to the real estate developments. The city is a major hub to multinational IT firms like IBM, AON Hewitt, Fujitsu, CSC, Fiserv, TCS, HCL, Tech Mahindra, Adobe, DELL, Patni Computers, etc. Noida is fast emerging as a hub for automobile ancillary units, with companies like Daewoo, Escorts, Honda- SIEL, etc. setting up offices here. Presence of software technology parks and SEZs.
Location Capital Values (INR/sq.ft.) Rental Values for 2 BHK (INR/sqft./month)
Sector 44 12,000 - 14,000 30 - 35 Sector 128 6,500 - 11,000 - Sector 50, 51, 52 7,500 - 9,000 18 - 25 Sector 93, 93A 7,000 - 9,000 25 - 30 Sector 100, 110 6,000 - 7,500 - Sector 129, 131 4,500 - 6,000 -
**Indicative mid-market segment Source: ICICI Property Services Group
Source: PropEquity Note: Graph represents weighted average price of residential units available in the primary market. *Quarters as per Calendar Year
30 GREATER NOIDA
Key Highlights:
Greater Noida is a planned expansion of Noida, with a carefully laid out development plan. It is strategically located in close proximity to New Delhi and Noida. The development of Greater Noida is planned and managed by Greater Noida Industrial Development Authority (GNIDA). It is developed on 20,000 acres of land with good infrastructure in terms of wide well planned roads, underground cabling of electricity and proper drainage systems. Greater Noida is expected to be one of the largest Industrial and Educational hubs of India. According to the 2021 Master Plan, 20% of the land has been allocated for residential development. Greater Noida market had turned off-beat during CY2012 because of land acquisition issues in the Noida Extension belt which have been resolved. However, it has witnessed a slight uptrend over the span of past one year. Prices in this market have essentially remained stable in the past continuing the same trend in CY2014. Noida Extension: o Noida Extension is an unofficial name given to the region of Greater Noida that touches Noida. Certain parts of this region were affected by a row of land acquisition issues which have been resolved lately. In order to mitigate the negativity attached with the region, ‘Noida Extension’ is now often referred to as ‘Greater Noida West’ by certain market players. This region includes Sector 1, 2, 4, 5, 12, 16B, 16C, Knowledge Park V and tech-zone IV of Greater Noida. o New launches and absorption in Noida Extension region have been subdued falling in line with the overall market sentiment in Delhi-NCR. However, during CY2014, the new launches dropped by ~36% Y-o-Y and the absorption dropped by ~50% Y-o-Y compared to the same period last year. The unsold stock has slightly gone up by about 10% Y-o-Y during CY2014 with an unsold stock of ~62,000 residential units by the end of CY2014. o The capital values in the Noida Extension region remained stable in CY2014 compared to same period last year.
Yamuna Expressway: It is an extension of the six-lane expressway from Noida to Greater Noida up to Agra and extends further to Mumbai. This belt has also seen subdued real estate activity in CY2014 with the new supply dropping by ~75% Y-o-Y and the absorption falling by ~63% Y-o-Y. The unsold stock has gone up by ~8% during the same time period with the number being pegged at approximately 24,000 residential units. Source: PropEquity
Growth Stimulators
The Delhi Metro Rail Corporation (DMRC) and the Greater Noida Authority had recently signed an agreement for the construction of the Metro link from Noida City Centre to Greater Noida. The 29.707- km line connecting City Centre Metro station with Greater Noida will boost the connectivity of Greater Noida significantly and is expected to be commissioned by 2018. Planning for infrastructural development in the long-term has been started with the establishment of an independent Yamuna Power Corporation Limited which will set up a 2,000 MW power plant. Greater Noida's Boraki has been identified as the gateway to Delhi Mumbai Industrial Corridor (DMIC) and with the proposed multi-modal Logistics Hub and the Boraki multi-modal Transport Hub are expected to give a boost to this real estate market. The proposed Jewar airport will give a major boost to the real estate market in this region. Source: Times of India 31 GREATER NOIDA
Various proposed developments by leading developers in the retail, commercial and infrastructure space are present in this micro-market. The plan to develop the 750-crore night safari project which is being developed as a family entertainment destination was finalized recently and would be developed on an area of 337 acres with the core area to be built across 250 acres and the remaining will be utilized for conducting business activities such as hotels, restaurants etc. The Buddh International Circuit is a Formula One racing track located in Greater Noida which hosted India’s first Formula One Grand Prix on 30th October, 2011 and has the potential to generate employability and to propel the economic state of the region. GNIDA has proposed the development of some of the other infrastructural initiatives such as an Exposition Mart for the promotion of export of handicrafts from India, an integrated Transportation Hub, Socio-Cultural Center, etc.
Location Capital Values (INR/sq.ft.) Rental Values for 2 BHK (INR/sqft./month) Sector Alpha, Chi, Pi 3500 - 4000 10 - 12
Sector Omega 3500 - 4000 10 - 12 Sector Beta, Delta, Gamma 3000 - 3500 8 - 10 Noida Extension 3000 - 3500 NA Yamuna Expressway 2500 - 3500 NA **Indicative mid-market segment Source: ICICI Property Services Group
Cluster 1: Sectors of Greater Noida such as Alpha-1, Alpha-2, Beta-2, Chi-III, Chi-IV, ETA-I, Omega-1 and Omnicorn-1 Source: PropEquity Note: Graph represents weighted average price of residential units available in the primary market. *Quarters as per Calendar Year
32 GHAZIABAD
Key Highlights:
Ghaziabad is spread over an area of 1,933.3 sq. km. and is located in Uttar Pradesh as a part of the Meerut Division. On the north, it is bound by the district of Meerut, on the east by the newly formed district of Hapur, on the south-west by Delhi and on the south by that of Bulandshahar and Gautambudh Nagar. As its boundary is adjacent to Delhi, it acts as the main entrance to Uttar Pradesh and hence is also called the Gateway of Uttar Pradesh. It is a large and planned industrial city, well connected by roads and railways, and is the administrative headquarters of Ghaziabad District. It is also the primary commercial, industrial and educational centre of western Uttar Pradesh and a major rail junction for North India. The established housing clusters of Kaushambi, Vaishali and Indirapuram are located in this region while the upcoming residential corridors include Raj Nagar Extension and developments along the NH-24 beyond Indirapuram, including the Crossings Republik township. This micro-market caters primarily to the mid-segment and affordable housing segments. Developers are looking at this micro-market as a destination for large-scale township projects, which find good demand in the predominantly end-user driven market at attractive price points. The Ghaziabad real estate market also enjoys a large population base from the industrial sector and SMEs, and a low-income population looking to upgrade to a better accommodation. While lack of availability of land has restricted new launches in the well-developed Kaushambi, Vaishali and Indirapuram clusters, and with a large existing residential population, these residential clusters have also recorded healthy capital appreciation. Ghaziabad real estate is thriving along the two national highways, namely NH-24 and NH-58. NH-24: New launches and absorption in this micro-market have considerably reduced in CY2014. During this period, the launches dropped by ~52% Y-o-Y and the absorption also fell by ~62% Y-o-Y compared to the same period last year. The unsold stock has increased by ~38% between the end of CY2013 and CY2014, with an unsold stock of ~9,500 residential units. The Crossings Republik, Wave City and Golf Links by Landcraft Developers, Antriksh Sanskriti, Amrapali Village, and projects by Gaursons, Supertech are the major residential developments in this micro-market. Raj Nagar Extension (NH-58): This micro-market has seen a host of developers adding it to the list of real estate destinations for homebuyers. The Raj Nagar Extension micro-market primarily has units in 2/3-BHK configuration. New launches and absorption in Raj Nagar Extension have considerably reduced in the CY2014. During this period, the launches dropped by ~63% and the absorption fell by ~65% compared to the same period last year. The unsold stock has remained constant during the same time period with an unsold stock of approximately 13,500 residential units. In the near future, the popular areas within Ghaziabad, such as Indirapuram and Vaishali, are expected to hold their ground while the mid to lower-income profile areas of Raj Nagar Extension and further developments coming up on NH-24 will account for majority of sales volumes. The core demand is likely to emanate from the low and middle-income population for the residential offerings in this corridor. Some of the major developers in this micro-market include Sare Homes, SG Estate, Ajnara, Gaursons, Landcraft, Prateek Group.
Source: PropEquity
Growth Stimulators: An elevated road stretching 10 km joining Raj Nagar Extension to NH-24, will positively impact the real estate market of Ghaziabad by significantly reducing the travelling time between the two points. Commercial and retail developments are coming up in a big way in regions like Indirapuram, Vaishali, Kaushambi and Vasundhara. With a strong commercial catchment, a well-planned infrastructure network, and an affordable price band, both NH-24 and NH-58 offer the necessary drivers to draw homebuyers' attention. NH-24 is an important road linkage between Delhi, Ghaziabad and Noida and its connectivity to the established residential and industrial corridors of Noida and Ghaziabad and accessibility to Delhi. GDA has recently approved a plan for a 9.41 km-long Metro link from Dilshad Garden to New Bus Stand. This Metro corridor will have seven Metro stations - Shahid Nagar, Raj Bagh, Rajendra Nagar, Shyam Park, Mohan Nagar, Arthala and New Bus Adda. A plan has also been proposed for a rapid Metro link from Delhi to Meerut
33 GHAZIABAD
which will be running through Ghaziabad which will further increase Ghaziabad’s connectivity. The Faridabad-Noida-Ghaziabad (FNG) corridor will further enhance the connectivity of Ghaziabad.
Source: Times of India
Location Capital Values Rental Values for 2 BHK (INR/sq.ft.) (INR/month) Vaishali/Vasundhara 6000 - 8000 14000 - 18000 Indirapuram 5500 - 6000 15000 - 18000 NH-24 3000 - 8000 8000 - 12000 Raj Nagar Extension 2500 - 5000 7000 - 10000 (NH-58)
**Indicative mid-market segment Source: ICICI Property Services Group
Source: PropEquity Note: Graph represents weighted average price of residential units available in the primary market. *Quarters as per Calendar Year
34 LOCATION ATTRACTIVE INDEX: DELHI
Mayur Ashok Chanakya- Greater Lajpat Patpar- Vasant Janakpuri Vihar Safdurjung Pitampura Rohini Vihar puri Kailash Nagar ganj Kunj Zone Connectivity and Infrastructure (Roads, schools, markets, hospitals)
Residential Cost
Proximity to Organized Retail
Proximity to Commercial Development
Scope of Future Infrastructure Development
Scope of Future Employment Generation
Good / low cost Above Average / below average cost Average / Medium Cost Below Average / above average cost Bad / High Cost
Source: ICICI Property Services Group
Explanatory Note: The Mayur Vihar micro-market scores well in terms of infrastructure and affordability; Lajpat Nagar, Patparganj and Janakpuri also have good civic infrastructure. Most of the micro-markets in Delhi have matured leading to the higher residential costs in majority of the micro-markets. Being a developed market, most micro-markets lie near organized retail and commercial establishments and thus have a good potential for employment generation.
35 LOCATION ATTRACTIVE INDEX: GURGAON
NH-8 Golf Course Dwarka Golf Course Road (Toll to Rajiv Sohna Road Manesar Belt Extension Road Expressway Chowk) Connectivity and Infrastructure (Roads, schools, markets, hospitals)
Residential Cost
Proximity to Organized Retail
Proximity to Commercial Development
Scope of Future Infrastructure Development
Scope of Future Employment Generation
Good / low cost Above Average / below average cost Average / Medium Cost Below Average / above average cost Bad / High Cost
Source: ICICI Property Services Group
Explanatory Note: The Golf Course Road micro-market is the most premium micro-market in this region with good civic infrastructure and connectivity followed by Golf Course Extension being relatively more affordable. The NH-8 and Sohna micro-markets are the new upcoming markets with good future potential. From the above figure we can observe that the Golf Course Road micro-market has good infrastructure and commercial/retail amenities, but the property prices prevailing in the region are high. Dwarka Expressway micro-market is yet to develop in terms of its infrastructure and other public amenities, but there is optimism for future infrastructural prospects. The Gurgaon sectors near Manesar offer affordable options vis-a-vis the properties on the Golf Course Road and its extension.
36 LOCATION ATTRACTIVE INDEX: NOIDA
Sector – 74, 75, 76, Sector 136, 137, Sector – 50, 51 Sector 100, 107 Greater Noida 77, 78 142, 168 Connectivity and Infrastructure (Schools, markets, healthcare)
Residential Cost
Proximity to Organized Retail
Proximity to Commercial Development
Scope of Future Infrastructure Development
Scope of Future Employment Generation
Good / low cost Above Average / below average cost Average / Medium Cost Below Average / above average cost Bad / High Cost
Source: ICICI Property Services Group
Explanatory Note: The Greater Noida micro-market has a good future potential among the other locations in terms of infrastructure. Greater Noida has good infrastructure in terms of road connectivity and currently has affordable capital values. Sectors 50, 51 have well-developed infrastructure/social amenities but have higher capital values in this market.
37 APPENDIX - I (Major policy-based developments)
A. Land Pooling Policy
Source: India Today
Land Pooling Policy was notified by the Ministry of Urban Development, on 5th September, 2013 as an addition to the existing Delhi Master Plan Draft 2021 dated 7th February, 2007. The first master plan of Delhi was formulated in the year 1961. The policy then of Delhi Development Authority (DDA) was to acquire large chunks of land, directly from the land owners, at a price determined by DDA. DDA would then undertake the master planning of this land and either sell or develop the land. This process was acceptable when the land valuations were nominal. In the 1960’s, the private sector wasn’t strong enough to shoulder the responsibility of urbanization and housing. Hence, the government took on the responsibility, and the land acquisition became a norm. However from the 1980’s, the private sector started seeking a larger role in this process through their enhanced ability.
In the past couple of decades, the surge in demand from the consumers made the supply from the government inadequate, and hence, this gap was fulfilled by the private sector, thereby forming a majority of the supply. But this increased demand and a higher investment appetite of the consumers resulted in a significant increase in land violations. The government continued to rest on the provisions of the Land Acquisition Bill 1894, which were seemingly unfair to the land owners, for compensation as well as rehabilitation. With many such instances of land violation occurring in West Bengal, Andhra Pradesh, Haryana, Noida, etc., it became increasingly clear to the government that forceful acquisition cannot be a tenable and a long-term methodology. The private sector also sought for a more risk free market methodology, as the government acquisition could potentially be a delaying factor for projects. Hence, this Land pooling policy was introduced by the DDA.
The primary objective of this policy is to prohibit the sale of land without the owner's consent, at the same time enabling private players to create housing pockets in the city in a more viable manner. According to the policy, a number of small holdings will be pooled and a part of the land will be taken from the pool for the provision of infrastructure and public facilities. The DDA will provide the necessary infrastructure for the basic amenities such as education, health, water, sewerage etc., while the rest of the land will be returned to the original owners for development. Another bright side of this is that after land has been pooled, the owners will get back 40-60% of the total land surrendered. According to the Master Plan of Delhi (MPD) 2021, the Capital has still about 27,000 38 APPENDIX - I (Major policy-based developments)
hectares which can be developed as sub-cities. MPD-2021 has divided the Capital into 15 planning zones (divisions) designated from ‘A’ to ‘P’. According to the projections in the master plan, nearly 24 lakh residential units are required for an estimated 23 million people by 2021. Land Pooling policy for the National Capital Region (NCR) is an attempt to implement the pooling concept on a bigger scale for approximately an area of 20,000 – 24,000 Hectares in the immediate urban extension of NCR i.e. zone J, K (I&II), L, N & P (I&II) of which zonal plans have been approved.
As opposed to direct acquisition, Land pooling or land readjustment is an alternative concept for development of agricultural land into urban land with basic social and physical infrastructural provisions provided by the Land Pooling Agency (LPA). LPA assembles land from various land owners by increasing their involvement in the development process. Increasing the involvement of land owners leads to almost null capital investment by the Development Authority in land acquisition and also leads to private sector involvement. Additionally, Private developers get flexibility to buy land from land owners at open market price through negotiations and give the land for land pooling to the LPA.
The Land Pooling policy has the involvement of two parties i.e. a Land Pooling Agency (LPA) and Development Entity (DE). LPA’s role is carried out by the DDA, designated to implement the land pooling policy and act as a facilitator during the process whereas DE means land owner or group of land owners, eligible to pool land. DDA will assemble land form the DE and provide a percentage of developed land in return. However, DDA will only be able to assemble land in a particular zone if more than 60% land owners come forward for land pooling and the surrendered land has no encumbrances and encroachments. During the process of land pooling if there are any left-out pockets, it will be the responsibility of DDA to initiate the acquisition.
Effect on Real Estate Land pooling policy shall first be implemented for the L, K1, N, P1 & P2 zones out of the seven urbanisable zones in the master plan as proposed for NCR’s urban extension. The figure above highlights the various urbanisable zones in the NCR.
By unlocking approximately 20,000 – 24,000 Hectares of land in Delhi, DDA has created hustle in various markets of NCR. The effects are likely to be seen in long term investment markets or secondary investment markets with a horizon of 10 – 15 years. These markets include Rewari, Palwal, Rohtak, Meerut and Alwar. These zones are likely to be developed in bits and pieces and some of the first few projects which would be delivered in these zones will take a minimum of 10 years as DDA will take about three years to return the land back to the DE with all licenses in place, a time limit of 5 – 7 years for infrastructure development and a minimum of two years for construction and delivery.
Categories of Land Pooling
Commercial = 3% Category 1 Category 2 (20 Ha. & above) Commercial = 3% (2 Ha. to 20 Ha.)
Category 1 Land returned to D.E. = Land retained by DDACommercial = =Land 3% returned to D.E. = Land retained by DDA = 60% 40% 48% 52% (20 Ha. & above) Commercial = 3% Gross residential = 43% Commercial = 5% Public/Semi-public = 2% Gross Residential = 53% Land retained by DDA = Public/semi-public = 2% Categories of Land Gross residential = 43% Gross Residential = 53% Gross residential = 43%52% Commercial = 5% Public/Semi-public = 2%Pooling Gross Residential = 53% Public/semi-public = 2% Gross residential = 43% Land retained by DDA = Commercial = 5% Public/Semi-public Commercial= 2% Gross= 3% Residential = 53% Public/semiPublic/Semi-public-public = 2%= 2% GrossPublic/semi residential-public = 43% = 2% 52%
Commercial = 5% Public/Semi-public Commercial= 2% Gross= 3% Residential = 53% Public/semi-public = 2% Category La2 nd retained by DDA = (2 Ha. to 20 Ha.) 52% Land returned to D.E.Commercial Category= Land1 = 5% retained by DDA = Land returned to D.E.Commercial = = 3% 60% 40% 48% (20 Ha. & above) Land retained by DDA = 52% Commercial = 5% Public/Semi-public = 2% Gross Residential = 53% Source: Black Olive VenturesCategory 1 Gross residential = 43% Land retained by DDA =
Commercial = 5% Public/Semi-public = 2% Gross Residential = 53% 52% (20 Ha. & above) Gross residential = 43%
Public/semi-public = 2% Land retained by DDA = 52% 39 Public/semi-public = 2% Land retained by DDA = 52%
Land retained by DDA = 52% APPENDIX - I (Major policy-based developments)
B. Increase in Floor Area Ratio (FAR) in Delhi:
With land being in short supply in the National Capital Region and the demand for housing rising by the day, the increase in FAR in Delhi is a step towards a more efficient usage of land. The urban development ministry increased the FAR in Delhi in the month of November. As per the guidelines, the FAR has been: Increased from 150% to 200% on 750 sq. m. to 1,000 sq. m plots Raised from 120% to 200% for plots of 1,000 sq. m. and above
Changes have been made to the ground coverage of residential areas in Delhi as well, according to which: The ground coverage for plots above 1,000 sq. m. has been raised from 40% to 50%. However, for plots of 750 to 1,000 sq. m, the ground coverage will remain at 50%.
This increase in ground coverage and FAR will have a relatively greater impact on prime residential neighborhoods than on mid-market localities, thus increasing the space utilization leading to bigger apartments. With no change in density norms, ticket sizes could rise due to the increase in FAR in areas of South Delhi and parts of Central Delhi such as Jor Bagh, Chankayapuri, Greater Kailash-II, Anand Lok, Panchsheel Park and Vasant Vihar which have plot sizes bigger than 750 sq. m. However, there will be a significant impact on group housing plots as well, where ground coverage that was previously at 33.35% has been increased to 50% which can allow more dwellings on the same size of plot. The move will also give a boost to builder floors and increase collaboration between individual plot owners and builders.
However, this policy is not expected to bring about a significant change in the real estate market because of the following reasons: Since the FAR in Delhi for group housing projects is already 200%, hence this increase is not expected to have an impact on such projects as the maximum permissible FAR is 200% as per the new policy. Since there has been no change in the density norms of 250 - 300 persons per Hectare in urbanizable areas, the move is expected primarily to make the apartments bigger with an increase in the ticket-sizes If the number of dwellings that can be built on a plot or the height restrictions (of 17.5 m on individual residential plots) are relaxed, then it is expected to increase the supply of housing stock and result in the reduction of prices.
C. Smart Cities
Under the direction of the Urban Development Ministry, Delhi Development Authority (DDA) is preparing a proposal to turn areas they had identified for land pooling into an integrated Smart City. The DDA will be developing a smart city through the land pooling scheme. A smart city is a self-sustainable unit relying more on renewable energy with integration of green spaces, residential and commercial areas through a web of roads and a major emphasis on minimizing waste by increasing energy efficiency and water conservation. In the coming months, the work is expected to begin on three smart cities in an organized urban set-up equipped with all amenities and guided by technology.
DDA has picked the Gujarat International Finance Tec-City, or GIFT City as a model, which was the first Smart City commissioned by Narendra Modi as part of the 100 Smart City campaign. As per the investment estimates, the total fund requirement for smart cities will be covered by both complete private investment or through public-private partnership. Source: Hindustan Times
These Smart cities will be coming up on the outskirts of Delhi — extension of Dwarka in southwest Delhi, Rohini and Narela in the northwest. Developers would be offering land parcels, and the DDA would then handover the land to developers for providing residential and commercial complexes, after creating the necessary infrastructure such 40 APPENDIX - I (Major policy-based developments)
as hospitals, schools, parking lots and green spaces.
D. Affordable Housing Policy (Haryana)
With the Central government’s push for ‘Housing for all by 2022’ and state governments such as Haryana and Maharashtra framing affordable housing policies, developers have already started launching their projects under this banner.
According to a committee constituted by the Housing Ministry, the housing shortage is estimated at 18.78 million during the 12th five-year plan period, of which over 95 per cent is expected in the EWS and LIG categories. With the urban population expected to grow to about 600 million by 2030, the demand for affordable housing will only go up. The Haryana Government notified the 'Affordable Housing Policy 2013' to encourage housing projects where in apartments of pre-defined size are made available at pre-defined rates within a targeted time frame to deserving beneficiaries in the urban housing market. Any project for which license is granted under the present policy cannot be converted into a normal group housing project under any circumstances and irrespective of whether or not it falls within the 20% residential sector area limit prescribed for group housing projects. Sale of apartments under this Policy will be on the basis of carpet area.
According to the Affordable Housing policy, the developers cannot take any other amount from the allotees except for the rate fixed by the Government based on carpet area. The carpet area will range from 28 to 60 sq. m. (301.39 to 645.83 sq. ft.) and price has been fixed at INR 43,000 per sq. m. (INR 4,000 per sq. ft.) in Gurgaon, Faridabad, Panchkula and Pinjore-Kalka and across the rest of the state at INR 38,750 per sq. m. (INR 3,600 per sq. ft.). However, at least 50% of the apartments have to be built with a carpet area equal to or less than 48 sq. m. (516.67 sq. ft.)
All such projects are required to be completed within a time frame of 4 years from the day of the approval of building plans or the grant of environmental clearance, whichever is later. The total area of an Affordable Housing project will lie between 5 and 10 acres. The allotment of the apartments will be held through a draw under the supervision of a committee consisting of the Deputy Commissioner, Senior Town planner, District Town Planner of the concerned district and a representative of the respective builder. The license fees and other such charges such as infrastructure development charges associated with the project which are borne by the developer which are passed on to the customers eventually, have been waived off by the state government for this scheme. The Haryana Govt. has received a total of 64 applications for the same out of which 31 licenses have been given till now and 7 more are under process. Apartments under the Affordable Housing Policy 2013 of Haryana Govt. will be available to customers within a price range of INR 12 lacs to INR 26 lacs.
The floor area ratio for these projects has been increased to 2.5 instead of the 1.75 permitted in normal group housing projects, while ground coverage has been raised to 50% against the 35% allowed in normal group housing projects. Any person who does not have any prior home either under Haryana's state government licensed colony or Haryana Urban Development Authority developed colony can apply under this scheme. The density norms have also been relaxed with 850-900 persons per acre from the earlier limit of 300.
A 2 BHK flat under this policy will be available in less than INR 25 lacs while similar flat under any project will be available within a price range of INR 40 lacs to 50 lacs. Even as unsold units pile up in the mid and luxury segment, developers are moving to affordable housing to tap the portion of the market that is witnessing the maximum demand and is also under-served with the necessary fillip being provided by the government in terms of policy initiatives. The overwhelming public response to the Delhi Development Authority’s (DDA) housing scheme in 2014 has enthused several developers to participate in such schemes. Some of the developers who have launched projects under this scheme include Raheja Developers ‘Krishna Housing Scheme’ in sector-14 at Sohna, Gurgaon, Tulip’s project ‘Lemon’ and Conscient’s project ‘Habitat’ to name a few. The affordable housing segment offers good prospects for the real estate market for both the developers who are looking forward to this segment because of its salability potential and the buyers in terms of both end-usage and as an investment.
This scheme is expected to give the much needed impetus to the real estate market of Gurgaon that has been witnessing sluggish demand patterns. It is likely to affect the entire investment scenario for this market with the off- take and launches in this segment picking up in the next few years.
E. Low Density Residential Area (LDRA)
As per a new policy, villages containing existing farm house clusters have been notified as “Low Density Residential Area”. As per the guidelines issued by the Delhi Development Authority (DDA) and the Ministry of Urban 41 APPENDIX - I (Major policy-based developments)
Development (Delhi Division), the land pockets having a minimum size of 0.4 ha. (4000 sq. m.) will be developed separately as a Low Density Residential Area.
As per the guidelines issued, a Low Density Residential Area must be developed as per the following parameters:
i. Minimum Plot area size is 0.4 hectares ii. FAR parameters: a. A 0.20 FAR is permissible without any additional charges b. An FAR between 0.20 and 0.30 is permissible with additional charges (as mentioned below) c. For plots of more than 1 acre, the portions remaining (if any) after plot subdivision will get the benefit of FAR only on prorate basis iii. Max. permissible height is 12 meters. iv. Min. green area should be 50% v. Permitted dwelling units a. Number of units is restricted by the FAR permissible. b. EWS unit of 60 sq. m. per acre is allowed in addition to permitted FAR. vi. Rain water harvesting and waste water recharging are mandatory with provision for storage for surface run off water to improve the depleting ground water levels.
As per the Delhi Development Authority notification, for availing an additional Floor Area Ratio (FAR) for the Low Density Residential Area, the additional charges are as follows:
FAR Excess FAR Corresponding Rates of charges Total charges in Utilized (FAR more than area in sq. m. to be recovered lakhs (INR) 20) (in INR / sq. m.) 0.20 0 0 Nil Nil 0.22 0.02 80 16000 12.80 0.25 0.05 200 16000 32.00 0.27 0.07 280 18000 50.40 0.30 0.10 400 18000 72.00
List of villages declared as Low Density Residential Area (LDRA) are:
1. Sayurpur 13. Mehrauli 2. Satbari 14. Rajokri 3. Chattarpur 15. Samalkha 4. Khanpur 16. Ghitorni 5. Devli 17. Rangpuri 6. Bhatti 18. HolambiKhurd 7. Fatehpur Beri 19. Bakoli 8. Asola 20. Bakatawarpur 9. Jounapur 21. Hiranki 10. Chandan Hula 22. Bijawasan 11. Gadaipur 23. Bamnoli 12. Sultanpur
Source: DDA
F. Transit Oriented Development (TOD) zone (Haryana)
According to the notification issued by the Haryana Government’s Town and Country Planning Department on 5th September, 2014, a Transit Oriented Development (TOD) zone will be allowed along the designated Metro corridors, in order to provide opportunities for the optimum utilization of land along these corridors and to provide access to the maximum number of people through the additional FAR. A TOD zone refers to any macro or micro- level development that is focused around a transit node and facilitates ease of access to the mass rapid transit facility, thereby inducing people to preferably use public transportation over personal modes of transport.
A 500-meters wide belt on both sides from the boundaries of the acquired area on which the MRTS corridor is proposed to be developed, will be designated as a TOD Zone. A higher FAR of 3.00 with an additional FAR of 0.50 for parking purposes will be provided for the property development along the designated TOD zone. 42 APPENDIX - I (Major policy-based developments)
The permissible uses within the TOD Zone are as follows: i. Multi-storeyed group housing ii. Integrated commercial complexes iii. Integrated office spaces iv. Integrated Industrial townships v. Banquet halls/community buildings/schools However, the following uses will not be permissible in the TOD Zone with the option to convert these uses into the above-mentioned permissible uses i. Car-sales showrooms or Automobile-repair/services/vehicular servicing shops ii. LPG godowns iii. Electric sub-station above 132KV iv. Bus Depot v. Cremation ground vi. Stand-alone multi-level parking other than provided on metro stations. vii. Stand–alone open parking lot other than provided on metro stations. viii. Any trade or activity involving any kind of obnoxious, hazardous, inflammable, non-compatible and polluting substance or process
Planning parameters for the permissible uses within the TOD Zone:
1. For multi-storied Group Housing: a. Maximum Ground Coverage - 40% b. FAR - 3.00 c. Minimum number of dwelling unit per acre - 125 d. Density (Persons per acre) - 625 (+/- 10%) 2. For integrated Commercial /Office spaces/Mixed Land Use: a. Maximum Ground coverage - 40% b. FAR - 3.00 3. All Remaining uses shall have FAR of 3.00 with ground coverage as per applicable laws. 4. The Infrastructure Development Charges for the different land uses under this policy are as follows:-
S. No. Land Use Rate (INR/sq. m.) 1 Residential 2000 2 Commercial 3000 3 Institutional / Industrial 500
As of now, this policy will be applicable to the following MRTS corridors: 1. Delhi Metro extension along Gurgaon- Mehrauli road upto Sector-29 (City Centre), Gurgaon. 2. Metro Link from Badarpur (Delhi) to Ballabgarh, District Faridabad. 3. Metro Link from Mundka (Delhi) to City Park, Bahadurgah. 4. Metro Link along Northern Periphery Road as proposed in the Final Development Plan 2031 of Gurgaon- Manesar Urban Complex. 5. Metro Link along Southern Periphery Road as proposed in the Final Development Plan 2031 of Gurgaon- Manesar Urban Complex. 6. Rapid Metro developed in PPP model by HUDA.
Source: Haryana Government website
43 ANALYST
TANAY AGARWAL Deputy Manager – Research ICICI Home Finance Co. Ltd. [email protected]
We acknowledge Gaurav Maheshwari, Manager, ICICI Bank for his contribution towards this report.
For any further queries, please e–mail us at [email protected]
or
For more on our research reports & periodicals please log on to www.icicihfc.com
ICICI HFC DISCLAIMERS & DISCLOSURES
The information set out in this document has been prepared by ICICI HFC Ltd. based upon projections which have been determined in good faith by ICICI HFC Ltd. There can be no assurance that such projections will prove to be accurate. Past performance cannot be a guide to future performance.
The information in this document reflects prevailing conditions and our views as of this date, all of which are subject to change. In preparing this document we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us or which was otherwise reviewed by us. ICICI HFC Ltd. does not accept any responsibility for any errors whether caused by negligence or otherwise or for any loss or damage incurred by anyone in reliance on anything set out in this document. No reliance may be placed for any purpose whatsoever on the information contained in this document or on its completeness
The product(s)/service(s)/offer(s) as contained herein are provided /offered by third party and are subject to their respective terms and conditions and not intended to create any rights or obligations.
The information set out in this document may be subject to change and such information may change materially.
This document is being communicated to you solely for the purposes of providing our views on current market trends on a confidential basis and does not carry any right of publication or disclosure to any third party. By accepting delivery of this document each recipient undertakes not to reproduce or distribute this presentation in whole or in part, nor to disclose any of its contents (except to its professional advisers) without the prior written consent of ICICI HFC Ltd., who the recipient agrees has the benefit of this undertaking. The recipient and its professional advisers will keep permanently confidential information contained herein and not already in the public domain.
This document is not an offer, invitation or solicitation of any kind to buy or sell any product/ service and is not intended to create any rights or obligations. Nothing in this document is intended to constitute legal, tax, securities or investment advice, or opinion regarding the appropriateness of any investment, or a solicitation for any product or service. The use of any information set out in this document is entirely at the recipient's own risk. Recipients of this Information should exercise appropriate due diligence, including legal and tax diligence, prior to taking of any decision.
44