Delhi & Mum­bai – Realty Hubs

Real es­tate in In­dia is dom­i­nated by the mar­kets in Delhi-ncr (Na­tional Cap­i­tal Re­gion) and Mum­bai- MMR (Met­ro­pol­i­tan Re­gion). Shubhra Saini talks to few de­vel­op­ers of both the cities.

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Mum­bai is In­dia’s most pop­u­lated city with over 18.4 mil­lion peo­ple whereas in terms of ur­ban sprawl, Delhi -NCR is much big­ger than Mum­bai in­clud­ing MMR. Also, Delhi-ncr en­joys more de­vel­oped in­fra­struc­ture than Mum­bai such as Noida Ex­press­way and Dwarka Ex­press­way and bet­ter rapid tran­sit sys­tem within the city. Mum­bai MMR still largely de­pends on local trains for trans­porta­tion and in­fra­struc­ture devel­op­ment is steady but slow to come by. How­ever, Delhi is land­locked whereas Mum­bai boasts a long coast­line. Mum­bai’s sur­rounds are there­fore likely to beckon more the man­u­fac­tur­ing and ex­port-ori­ented in­dus­tries than Delhi. Also, Mum­bai con­tinue to come up with more lux­ury and su­per lux­ury prop­er­ties than Delhi fur­ther boosted by re-devel­op­ment and slum re­ha­bil­i­ta­tion schemes in South and Cen­tral Mum­bai. Ev­i­dently, the prop­erty prices are higher in most Mum­bai MMR as com­pared to NCR. Only Gu­ru­gram and some posh lo­cal­i­ties in Delhi have the same en­try level price as Mum­bai. Scarcity of land is the main rea­son that the real-es­tate devel­op­ment in Mum­bai is ver­ti­cal in na­ture. Del­hincr though plot­ted devel­op­ment still abounds, tall com­mer­cial are res­i­den­tial build­ings are com­ing up in Gu­ru­gram tow­ers. With mar­kets un­der­go­ing recor­rec­tion and de­vel­op­ers con­cen­trat­ing on con­sol­i­da­tion rather than ex­pan­sion, the real-es­tate mar­kets of both Delhi & Mum­bai are get­ting stream­lined. De­vel­op­ers are hope­ful that cou­ple of quar­ters from now, sheen will re­turn back to the realty sec­tor.

Mum­bai- MMR Realty

Mum­bai is called the city of dreams. The fi­nan­cial cap­i­tal of the coun­try of­fers job op­por­tu­ni­ties for the

The un­sold real-es­tate in­ven­to­ries will take an­other 52 months to be cleared in Mum­bai and about 62 months for Delhi mar­ket, ac­cord­ing to Anarock Prop­erty Con­sul­tants.

count­less who flock to the city for bet­ter qual­ity of life. This makes the land starved metro also the most ex­pen­sive hous­ing mar­ket. Ac­cord­ing to the cen­sus re­port, pop­u­la­tion of Mum­bai has in­creased by 93 % in last 100 years, clearly in­di­cat­ing that de­mand in Mum­bai will al­ways out­strip the sup­ply. But with the in­fra­struc­ture devel­op­ment in MMR com­pris­ing Navi Mum­bai, Thane and Powai, there seems some hope for buy­ers. Kolte-patil De­vel­op­ers Ltd. is Pune’s largest de­vel­oper and is also present in Mum­bai with some up­scale rede­vel­op­ment projects. Gopal Sarda, CEO, Kolte Patil, talk­ing about the reg­u­la­tory changes and how real es­tate has emerged out to be stronger said, “Home-buy­ing is never go­ing to stop. Real-es­tate is the only in­dus­try which is not per­ish­able. Post RERA the cus­tomer con­fi­dence will in­crease in the long run as it brings in trans­parency and with GST more in­di­vid­u­als will come un­der the tax­a­tion am­bit. In ad­di­tion, the low­er­ing in­ter­est rates on home loans and ease of fi­nance for de­vel­op­ers for af­ford­able hous­ing given the in­dus­try sta­tus ac­corded to it will help res­ur­rect realty sec­tor. . Ru­parel Realty has been con­struct­ing nu­mer­ous res­i­den­tial & com­mer­cial projects across Mum­bai. Amit Ru­parel, Man­ag­ing Di­rec­tor, Ru­parel Realty shares his views, “The MMR re­gion (Thane and Navi Mum­bai) has seen an in­creased sup­ply in in­ven­tory, and it is equally matched by the de­mand. Home loans have be­come more af­ford­able, which is en­cour­ag­ing more peo­ple to in­vest in their own homes.al­though the realty sec­tor did face a slump and is yet to re­cover, cer­tain sub­urbs are do­ing well. Builders with good projects and those who en­sure sus­tain­able op­er­a­tions, will weather the storm. Res­i­den­tial de­mand is ex­pected to pick up to­wards the end of 2017. The re­cov­ery will be sus­tain­able and based on much sounder mar­ket fun­da­men­tals than tran­sient sen­ti­ment.” Brief­ing on their own busi­ness model that was aligned to the spe­cific char­ac­ter­is­tics of Mum­bai city, Sarda ex­plained, Mum­bai is more in­vestor driven mar­ket but in last few years with hardly any ap­pre­ci­a­tions in the prop­erty val­ues due to var­i­ous fac­tors, end users can buy a home at five year old rates as well as dis­counts and free­bies from de­vel­op­ers. When we for­ayed in the Mum­bai mar­ket about three years back, we re­al­ized that the as­set light model would work best given the high land prices in the city. Com­pany has un­der­taken rede­vel­op­ment projects in var­i­ous prime lo­cal­i­ties in Mum­bai. The cap­i­tal de­ploy­ment in these projects is linked to ap­provals and project spe­cific time­lines and the fo­cus is to keep down the work­ing cap­i­tal cy­cle and quick turnover.” An­other Mum­bai based de­vel­oper Rus­tom­jee­with a spe­cial fo­cus on the Mum­bai Met­ro­pol­i­tan Re­gion aims to add an­other 13 mil­lion square feet to its port­fo­lio of com­mer­cial and res­i­den­tial in the next five years.talk­ing about the new buy­ing pat­terns among Mum­bai cus­tomers, Kaizad Ha­te­ria, Brand Cus­to­dian and Chief Cus­tomer De­light Of­fi­cer, Rus­tom­jee Group stated, “Mum­bai is wit­ness­ing a shift to­wards gated com­mu­ni­ties among buy­ers. The home­buy­ers pre­fer an ele­ment of com­mu­nity liv­ing, so­cial spa­ces for fam­ily and them­selves and se­cu­rity and life­style fea­tures.” Re­cent data in­di­cates that de­mand has in­creased sig­nif­i­cantly to­ward projects with smaller con­fig­u­ra­tions, given their af­ford­able ticket size. De­vel­op­ers are re­design­ing and repo­si­tion­ing their projects tar­get­ing the lower and mid­dle in­come seg­ment, where the big­gest mar­ket de­mand is for hous­ing. In or­der to make the Gov­ern­ment’s vi­sion of hous­ing for all a re­al­ity, there has been an evo­lu­tion within the in­dus­try. De­vel­op­ers are go­ing back to build­ing 1-BHK homes and some are cre­at­ing posh stu­dio apart­ments for the up­wardly mo­bile cus­tomers. Mum­bai com­mer­cial real-es­tate has fared bet­ter than the res­i­den­tial seg­ment due to the steady de­mand from IT/BPO, con­sult­ing, BFSI, health­care and me­dia in­dus­tries that have been look­ing at set­ting

Mum­bai has emerged as the most sta­ble com­mer­cial realestate mar­ket from net ab­sorp­tion per­spec­tive in 2017 reg­is­ter­ing a to­tal of 2 mil­lion sq. ft. so far this year.

up their of­fices in the fi­nan­cial hub of the coun­try. How­ever, the sup­ply for of­fice space has been greatly con­stricted in Mum­bai. As Ha­te­ria elab­o­rated, “En­trepreneurs and start-ups are more in­ter­ested in small floor plate sizes while, the big­ger of­fice floor ar­eas are be­ing oc­cu­pied by multi­na­tional and In­dian con­glom­er­ates. The de­mand for com­mer­cial devel­op­ment will get fur­ther boost as more REITS are in­tro­duced.” Or­gan­ised re­tail shows the max­i­mum po­ten­tial to grow in Mum­bai as the city has the largest stock and up­com­ing sup­ply of of­fice space and re­mains most at­trac­tive for mi­grants. From the in­fra­struc­ture per­spec­tive, all parts of Mum­bai are well con­nected which ben­e­fits the re­tail in­dus­try by pro­vid­ing bet­ter sup­ply chains.

Delhi- NCR Mar­ket

Delhi-ncr mainly com­prises of Delhi, Gur­gaon, Noida, Faridabad and Ghazi­abad.. de­spite be­ing one of the big­gest real-es­tate mar­kets in In­dia, it is the most un­sta­ble of all the met­ros and worst im­pacted by de­mon­e­ti­za­tion, RERA and GST. As per Knight Frank In­dia, hous­ing sales fell 26% in Delhi-ncr in the first half of 2017. This is de­spite the 20% price cor­rec­tion in the past 18 months. Com­ment­ing about the same, Pradeep Ag­gar­wal, Chair­man – Sig­na­ture Global In­dia & Na­tional Af­ford­able Hous­ing Coun­cil – AS­SOCHAM, said, “De­vel­op­ers have re­alised the hard way that the real-es­tate sec­tor is a cus­tomer driven mar­ket and the cus­tomer to­day de­mands rea­son­ably priced hous­ing. In met­ros, the trend is now of ver­ti­cal devel­op­ment that of­fers more units in a given land par­cel and the tran­sit ori­ented devel­op­ment that ad­dresses the com­mut­ing prob­lems of the cit­i­zens. Also, Gu­ru­gram is the hub for em­ploy­ment op­por­tu­ni­ties thereby at­tract­ing work­force and de­mand for am­ple amount of af­ford­able hous­ing.” Sig­na­ture Global has pres­ence in Gu­ru­gram, Kar­nal and Ghazi­abad. As per Ag­gar­wal, their com­pany has launched over 10,000 units of af­ford­able hous­ing in north­ern In­dia in­clud­ingncr’s first af­ford­able hous­ing project by the name of Sig­na­ture Global Sol­era in Sec­tor – 107, Gu­ru­gram. Like Mum­bai, in Delhi-ncr too, Tran­sit-ori­ented Devel­op­ment (TOD), also known as the Mixe­duse Model is slowly but steadily gain­ing pop­u­lar­ity. The main driv­ers for such de­vel­op­ments are Delhi’s air and noise pol­lu­tion, short­age of wa­ter sup­ply and traf­fic con­ges­tion. Pa­cific In­dia with res­i­den­tial foot­print in Dehradun and Mo­rad­abad is de­vel­op­ing large sale res­i­den­tial de­vel­op­ments.

The TOD model of com­mu­nity devel­op­ment en­tails de­vel­op­ing hous­ing as well as busi­ness spa­ces, in­clud­ing re­tail, en­ter­tain­ment, bou­tiques, restau­rants, house­hold or pro­fes­sional ser­vices, con­sumer goods, and health­care fa­cil­i­ties within a walk able neigh­bour­hood. Ab­hishek Bansal, Ex­ec­u­tive Di­rec­tor, Pa­cific In­dia, said, “The ur­ban devel­op­ment au­thor­i­ties are en­cour­ag­ing mixed use town­ships that com­bine res­i­den­tial, cul­tural, re­tail and com­mer­cial es­tab­lish­ments for a more sus­tain­able city in­fra­struc­ture.” For the mid­dle-in­come seg­ment, New Gur­gaon –area near Kherkid­haula, Dwarka and Noida are the favourite des­ti­na­tions pri­mar­ily be­cause of the af­ford­able prices and rea­son­ably good con­nec­tiv­ity with other parts of the city. Dwarka, Kalkaji, Vikaspuri, De­fence Colony and Ch­hatarpur, the prom­i­nent lo­cal­i­ties in the cap­i­tal and Gu­ru­gram have seen some price im­prove­ment. Buy­ers are show­ing in­ter­est in Sec­tor-137 and Sec­tor-78 in Noida for ready-to-move-in op­tions but prop­er­ties along NH-8 and Dwarka Ex­press­way have seen a dip in prices. Kar­nalis be­ing touted as the new NCR town due to its prox­im­ity to Delhi and lever­age of its Knowl­edge-based en­ter­prises and Start-up ac­tiv­i­ties that are cre­at­ing new em­ploy­ment op­por­tu­ni­ties and im­prov­ing its in­fra­struc­ture. Bhi­wadi also is the next big-real es­tate in­vest­ment op­por­tu­nity in Delhi-ncr as it is just 40 km from Mil­len­nium city Gu­ru­gram and sits on the Delhi-mum­bai In­dus­trial cor­ri­dor. “There is no de­nial to the fact that the Delhi NCR’S real es­tate con­tin­ued to re­main fraught with con­stant stock­pile of hous­ing units. But, it is now slowly mov­ing to­wards re­cov­ery. The fo­cus on af­ford­able hous­ing and the im­pe­tus pro­vided to the real-es­tate sec­tor will def­i­nitely trans­late into op­por­tu­ni­ties for the res­i­den­tial mar­ket,” opined Nayan Raheja, Ex­ec­u­tive Di­rec­tor, Raheja De­vel­op­ers, the real-es­tate com­pany that en­joys strong pres­ence in NCR since 1990. The com­mer­cial real-es­tate in Delhi wit­nessed an over­all ab­sorp­tion of 0.26 mil­lion sqft in Q3 2017. And about 3.0 mil­lion sqft of new sup­ply is likely to be com­pleted over the next three years. The dearth of grade-a sup­ply has en­sured high de­mand. In Gu­ru­gram due to con­tin­u­ous ad­di­tion of new sup­ply, the com­mer­cial space mar­ket re­mains sta­ble. The over­all va­cancy re­mains high around 28%. The de­mand in Noida is con­cen­trated in the in­sti­tu­tional and in­dus­trial Sec­tors 62to 65 and Noida Ex­press­way and is driven by ten­ants look­ing for large floor­plates at af­ford­able rents.

Delhi-ncr is a rel­a­tively more ma­tured re­tail mar­ket than Mum­bai. In terms of ge­o­graph­i­cal area, Delhi is much big­ger and there are quite afew ar­eas that are un­der­served by or­gan­ised re­tail space, which con­trib­utes to the re­tail mar­ket po­ten­tial of the city. Al­though Delhi-ncr and Mum­bai MMR con­tinue to con­sist the lion’s share in the In­dian realty mar­ket, in­creased ur­ban­i­sa­tion has changed the realty sce­nario in other cities. What’s in­ter­est­ing to note is that ac­cord­ing to the re­search re­ports by CBRE and Out­look, the bulk of sales in 2017 first quar­ter were not in the prime met­ros of Mum­bai-mmr and Delhi-ncr but in cities such as Chen­nai, Kolkata, Hyderabad, Bengaluru and Pune. de­vel­oped in­fra­struc­ture, con­nec­tiv­ity, ex­pand­ing-eco­nomic ac­tiv­i­ties along with favourable gov­ern­ment poli­cies and avail­abil­ity of af­ford­able and mid-seg­ment hous­ing are the fac­tors driv­ing this in­ter­est­ing trend.

Ac­cord­ing to the quar­terly in­dus­try re­port in May this year, 22% of Delhi’s lo­cal­i­ties wit­nessed an up­ward trend fol­lowed by 26% in Ghazi­abad, 27% in Gur­gaon, 37% in Noida and 41% in Greater Noida.

delhi

pradeep Ag­gar­wal

Kaizad ha­te­ria

gopal SARDA

mum­bai

nayan raheja

Ab­hishek BANSAL,

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