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NCR promises boom in realty - An overview

Delhi is undergoing a facelift these days due to the rise of satellite townships, business avenues and various other infrastructural developments. The main aim behind this development is to make Delhi a global metropolis and also a world class smart city by the year 2021. The Government and the private sector are hand in glove to make Delhi a better place for which government has initiated Private Public Partnership ( PPP) model. The PPP model has been propagated to improve infrastructure actively as well as for development of the land in Delhi and along its national capital regions.

With the help of Delhi Development Authority the Delhi Master Plan 2021 aims at constructing 65,000 houses for the urban population in the coming next four years. Nevertheless, there is also a planned budget 2012-13 by the central government which would involves the private sector for cheaper housing which in turn would boost the development in NCR.

Infrastructural development and improved connectivity with better transportation will not only lead to concentric development of the capital city but also pave way for further investment in the Delhi NCR. Various highway and expressway projects like Yamuna expressway have not only made way for better connectivity but have also made way for real estate developments. Also, there was a stress on the Delhi-Mumbai Industrial Corridor by the Ministry of Finance for on the either side of Western Dedicated Rail Freight Corridor.

There is also in the pipeline the Eastern Dedicated Freight Corridor that would be intersecting the Western Freight Corridor in the Greater Noida thus making Greater Noida an important area of the NCR. Dedicated Freight Corridor Corporation (DFCC) and the U.P state Industrial Development Corporation (UPSIDC) on the initiation of the Government of Uttar Pradesh have already started the deliberations on developing the industrial and residential townships along these corridors.

In National Capital Region the development of residential areas is going hand to hand with the infrastructural development. However, in Noida and Greater Noida the infrastructure is being developed at a better pace where the facilities like metro, F1 track, night safari have already been developed or are under development whereas Faridabad and Gurgaon are still on the verge of infrastructural development which is slightly slow as compared to the residential development in these towns.

The growth of real estate will not only benefit public facilities but also safety, accessibility and connectivity all of which have the potential to boost mass housing schemes in new areas.

Since, this is just the beginning the IT sector has much more to offer being the largest occupant in excess of 200,000 square feet each across Gurgaon and Noida. More of such developments are expected in the fourth quarter of which 70% will comprise of IT across Noida and Gurgaon.

Gurgaon as of now is one of the most favourable location to cater to as compared to Noida and Greater Noida for commercial and residential developments. The maximum appreciation in the last one year was in Gurgaon and its adjoining areas. In some places property prices went up by around 50%. Even Dwarka Expressway saw a steep rise of 50% in the prices of recently-launched apartments. Many of the apartments that are still under construction were sold at Rs 3,000 per sqft in early 2011. Now the rate is Rs 4,500 per sq ft.

 

Some of the apartments in the area were launched at over Rs.6000 per sq ft. Similarly, the prices of apartments on Golf Course Road, Sohna Road, DLF City Phase V and Manesar appreciated by around 25% in the last one year. Apartments on Golf Course Road in Gurgaon are being quoted between Rs.11,000per sqft and Rs.12,000 per sq ft.

However, the most sensational performer in NCR region for 2012 was Dwarka Expressway with its close proximity to the international airport and the proposed diplomatic enclave, along with its rapidly evolving infrastructure and good connectivity with west Delhi and Gurgaon continues to work in this region’s favour. There was high level of interest by investors in this region, resulting in price appreciation and high sales volumes in 2012.

In addition to this, most of the projects launched in the last one year have been nearly sold out in all the micro markets like Noida, Gurgaon, Faridabad, Kundli, Sonipat,Dwarka etc. Looking at the current scenario developers are encouraged to launch premium products, like skyscrapers in Noida and Gurgaon, where the base prices have been pegged at around Rs 8,000 per sq ft.

In one of the latest survey it has been revealed that out of the top 13 cities, Noida – West (extension) in National Capital Region will generate the highest returns for residential real estate investors over the next five years. With all the action centred in Delhi NCR whether it is Dwarka Expressway, Noida Extention or Raj Nagar Extention; the expressways, national highways and the proposed metro networks are where all the property developments are taking place allowing good connectivity for the people.

People from all over the country are migrating continuously into the Delhi NCR to study, to explore new business avenues or for a job for further career advancement leading to exponential rise in the population of Delhi NCR. Thus, there is a huge requirement for residential, commercial as well as social infrastructure to cater to these increasing numbers.

Various projects are mushrooming along the Greater Noida, Noida Expressway, the Yamuna Expressway, the KPMG expressway, NH-24, NH-58, NH-8, NH-1, the Dwarka Expressway, Raj Nagar Extension at a very rapid pace thereby receiving favourable results with end users and investors as well.

The real estate sector is booming since last one year. Though it is carrying the apprehensions that the economic slowdown will impact the realty sector in the short to medium term, the residential sector is performing well in all the micro markets of the national capital region (NCR) of Delhi, so far.

Even the RBI's measure to increase interest rates to tackle inflation had not dampened the mood in the realty sector. The increase in interest rates, however, had led to slowdown in the economy. However the recent cuts in the interest rate and the provision of subvention in the housing loan up to 25 lakhs have boasted the sentiments of the realty sector.

Moreover, if much needed global economic recovery along with domestic economy comes to surface the future of realty sector is really bright in NCRs.

An insight into the world of windows

Windows not only carve out elevation of the building and interiors but also bring in fresh air and light. Availability of various options with varied design and usage has driven the modern architects to use different types of windows of which the sliding is the most popular followed by bay windows. Though the window design is used as per the requirement of the place; but the sliders and the bay windows have their own advantages.

Sliding windows are designed of two or more sashes that slide horizontally, left or right, on tracks. The sliding windows work on a 'ride over' mechanism so:

·         Sliding windows guarantee light-flooded rooms.

·         They are ideal to meet the special requirements of the Mediterranean and locations with similar climatic conditions.

·         With sliding windows fanlights and different window combinations are possible.

·         These windows can be made wide and tall with the addition of sashes.

·         Steel reinforcement can be integrated into both frame and sash to ensure excellent structural values.

On the other hand, bay windows are protruding window constructions which run over a single or multiple stories of buildings. Bay windows are mostly polygonal or square in a building plan. The angles used in the corners of the bay window are generally 90, 135, 150 degrees. Bay windows have various uses in the building up of a structure like:

·         They give room for visibility from within unlike in a flat window blocking visibility from outside.

·         They form a special type of balcony giving it an aesthetic value.

·         Bay windows not only allow natural flow of light into the building but also help in making a room appear larger.

·         They add ornamental beauty to the building than being an essential part of a building structure.

·         Mostly bay windows rise from a building while some bay windows are levelled along with the exterior giving insight to the interior of the room.

Honda Amaze: A win-win option

As we all know it has been the worst year in a decade for the auto industry but with the new entrant the Honda Amaze it seems things will turn out to be positive for the auto industry. Honda Amaze the new entry level sedan is priced at Rs.4.99 lakhs for the petrol variant. For the first time in India they have introduced the diesel variant with best mileage in the category and improved engine performance. This holds better opportunity for Honda than Maruti Dzire on one front that Honda has limited reach with only 150 sales outlets against Maruti which has 1200 outlets.

Will Honda Amaze play a game changer or not here are few indications on this basis:

Honda is the hallmark of premium cars in India with its City and Accord models but the number        has gone down significantly. Honda’s market share has slipped from 5.52% to 3.86% almost six years ago to fiscal year 2013.Inspite of the strong Honda branding it has struggled to launch the right product at the right price in India.

Amaze should be a game changer for the company. Also, with the big shift in the approach with a diesel variant Honda is now ready to take on market leader Maruti Dzire. Industry experts expect Amaze will sell between 3,500 and 4,000 units every month in the near future.

With Honda Amaze Honda has not only tried to trim the costs in India but also tried to connect better with the Indian consumers by launching ad campaigns in regional languages with the tagline "Badle Aapki Duniya" ("Changes Your World").

For the industry it has not been a good fiscal year with the  total sales dipping at 7% over a year ago to 1.89 million units.The auto industry saw 20-plus launches every year but 2013 will see very few model launches. In that context, Amaze stands out because only Ford Eco Sport is slotted for a launch this year.

According to the experts it is unlikely that Amaze will turn the tide it will at its best add 50,000-odd units to the overall 2 million annual sales. But it should certainly help turn around the sentiment something the industry badly needs.

 Though, Honda Amaze debuts in a segment which already has Maruti Dzire, Tata Indigo and Toyota Etios; the only competitor that matters is Dzire with the sales of 18,000 units a month and covers over three fourths of this segment.

  Amaze is well placed to creep into Maruti Dzire's dominant share. However, some experts see an unlikely side effect that Amaze will eat away Honda City sales.  It is expected that Amaze will expand the entry-level sedan segment that might lure compact buyers to upgrade their segment.

The entry-level sedan Honda Amaze is uniquely made for Indian segment. It is a compact car in every way with a small boot to it. It owes its origin to sub-4 metre cars. For a car buyer, the sub-4 metre offers advantages of a compact with sedan-like comfort at a slightly higher price. The segment is a win- win for buyers as well as for Honda.

Focus 2013 in Realty

The year 2012 had few signs of positive growth with inflation below the RBI’s levels and with growth in the Index of Industrial Production (IIP) which was a breather for year 2013. Here are some insights with regard to inflation in economy and policies which would have an effect on real estate for 2013:

1. Economy – Although there is a risk of inflation but RBI would focus towards growth in 2013. It is expected that interest rate would witness a downward trend in 2013 which would lead to reduced home loan rates inturn leading to increase in buying of realty assets. An upward trend in consumption will lead to urbanization despite the slowdown in GDP which will drive the year 2013.

2. Policies – Initiatives for better policy making are being taken which would improve the investment in the near future in the year 2013 of real estate. The Real Estate Regulation Bill is expected to be tabled in the winter session of the parliament; the real estate investment trusts (REITs) or real estate mutual funds (REMFs) are also expected to get launched in 2013; and the Land Acquisition and Rehabilitation and Resettlement Bill is to be tabled in the upcoming budget session in 2013.

3. Infrastructure – In the infrastructure sector a substantial FDI of USD 2.8 billion has been achieved which is accountable for a notable 7.7% of the total FDI inflow in the Financial Year 2012. In the year 2013, relaxation of FDI policies in multi-brand retail is expected to boost the investment in back-end infrastructure development such as logistics. Moreover, an FDI of up to 100% will be permitted under the built-up infrastructure which will surge the development of the city and the infrastructure in at the regional level in 2013.

 

4. Commercial Real Estate – There is not much significant change in the absorption of office space in 2013 as compared to year 2012. There is expected rush for prime locations in prime buildings in the year 2013. Fresh projects are being launched and vacant spaces are being occupied in no time. With this scenario rents are certain to get a boost. Special economic zone is favorite among the occupants to avail the benefits.
 

5. Residential Real Estate - REITs in India allowing investments in rental housing is a new trend worth a watch. Once the framework and details of REIT are formulated it is  likely to drive the investor demand across the prime cities in India in 2013. Another interesting trend observed recently in the last two years was that the stock in the range of INR 2,000-3,000 per sq ft was sold out very swiftly. In 2013, there will be a shift in the range to INR 3,000-5,000 per sq ft with the increase in inflation and construction costs.

6. Education and Health Care – There is aggressive growth in skill based educational institutions in 2013, particularly in the non-metro cities of India, where there are new opportunities. In the health care sector, hospital chains along with day care centre are expected to expand aggressively in 2013. Both these sectors are expected to attract private equity investment in 2013.
   

 

7. Delhi - Most of the absorption in Delhi NCR is likely to focus around Gurgaon and Noida, with the exception of Delhi International Airport Limited (DIAL) and few select stand-alone Grade A projects of Delhi. As the demand supply gap of quality office space is expected to increase because of the supply constraints in select precincts of Delhi NCR, rents are expected to increase in certain micro-markets.

Therefore, these factors will affect the real estate business in year 2013.

NCR promises boom in Realty

Delhi is undergoing a facelift these days with the rise of satellite townships, business avenues and various other infrastructural developments. The aim is to make Delhi a global metropolis and a world class smart city by year 2021. The Government and the private sector are hand in glove to make Delhi a better place for which government has initiated Private Public Partnership ( PPP) model. The PPP model has been propagated to improve infrastructure actively as well as for development of the land.

With the help of Delhi Development Authority the Delhi Master Plan 2021 aims at constructing 65,000 houses for the urban population in the coming four years. Nevertheless, there is also a planned budget 2012-13 by the central government which would involve private sector for cheaper housing which would in turn boost the development in NCR.

Infrastructural development and improved connectivity with better transportation will lead to concentric development of the capital city. Various highway and expressway projects like Yamuna expressway have not only made way for better connectivity but have also paved way for real estate developments. There was also a stress on Delhi-Mumbai Industrial Corridor by the Ministry of Finance for on the either side of Western Dedicated Rail Freight Corridor. 

Also, the Eastern Dedicated Freight Corridor would be intersecting the Western Freight Corridor in Greater Noida thus making Greater Noida an important area of NCR. Dedicated Freight Corridor Corporation (DFCC) and the U.P state Industrial Development Corporation (UPSIDC) on the initiation of the Government of Uttar Pradesh have already started the deliberations on developing the industrial and residential townships along these corridors.

The IT sector has much to offer being the largest occupant in excess of 200,000 sqf each across Gurgaon and Noida. More of such developments are expected in the fourth quarter of which 70% will comprise of IT across Noida and Gurgaon.

Gurgaon as of now is the most favorable location as compared to Noida and Greater Noida for commercial and residential developments.

 Moreover, if the much needed global economic recovery along with domestic economy comes to surface the future of realty sector is bright in NCRs.