RoundUp Of Real Estate Market In NCR From Jones Lang LaSalle
By Sanjay Sharma, Section Gurgaon Real Estate Property
Posted on Sat Mar 12, 2005 at 08:26:50 PM EST
[djain128]This is an edited extract from the latest report on the Indian property market of Jones Lang LaSalle, international real estate consultants:
DELHI - Prime Residential Market
- In Delhi Vipul launched and sold more than 40 apartments in the prime south Delhi location of Aurobindo Marg. The project comprises of 4 BR and 5 BR apartments which were sold at approximately Rs. 7,000-7,500 per sq. ft.
- In Gurgaon DLF launched `Royalton' having 76 premium category apartments.
- Unitech Group launched its sixth phase of `Nirvana Country' which included `The Close' and `Espace'. `The Close' has more than 500 units comprising of 3 BR and 4 BR apartments which were launched at Rs. 2491 per sq. ft. and Rs. 2900 per sq. ft. respectively. `Espace' comprises of 400 villas priced at Rs. 8,000,000 and above.
- Unitech also launched 3 towers, with a total of 80 apartments in Unitech World City East at Rs. 2925 per sq. ft.
- Vipul launched `Villa Nova' which comprises of 164 premium quality apartments. These apartments are more than 5000 sq. ft. in area and cost Rs. 230 million or more.
- Sahara Grace was another premium residential project launched in Gurgaon. It comprises of 185 apartments, about 3600 sq. ft. each, 16 penthouses of 5337 sq. ft. or 5700 sq. ft. in size, and 6 villas each measuring 6000 sq. ft. in size.
- In Greater NOIDA, the Omaxe Group announced their premium residential complex Putting Greens two months ago. Within a month of its launch the project recorded a price escalation of approximately 18 per cent in face of high demand.
There was an overall escalation in the capital values in all micro markets of the National Capital Region from the levels prevailing in the beginning of 2004. This trend is likely to continue in the first half of 2005. Purchase prices for prime residential apartments in Gurgaon have appreciated more than 15 per cent during the second half of 2004.
- Amongst the key future projects, MGF Developments Ltd. is expected to launch its first residential project in DLF phase II, Gurgaon, in the first quarter of 2005. The entire project will cover 13 acres and its expected to be launched at Rs. 4, 250 per sq. ft.
- In the coming months, Unitech is expected to launch more apartments of 2300 sq. ft. in Unitech Garden on Sohna Road, Gurgaon.
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DELHI - Commercial
A TOTAL of 550,000 sq.ft. of grade A office supply with added to the stock in the National Capital Region (NCR) during the fourth quarter of 2004. The net absorption during this period was estimated at 875,000 sq. ft.
While no new construction activity was observed in the Central Business District, a net absorption of 46,000 sq. ft. was recorded in Grade `A' office space, reducing the vacancy levels to 3.65 per cent compared to 14.5 per cent in the beginning of the third quarter of 2004. This decline is vacancy levels has resulted in the escalation in quoted rents.
In the suburban micro markets, the majority of construction activity (250,000 sq.ft.) was recorded in Gurgaon. The current vacancy level in Grade A office buildings is approximately 12.4 per cent.
As a result of low vacancy rates and stable demand, there was no significant change in the rental and capital values.
In the suburban district of NOIDA, 300,000 sq. ft. of Grade `A' was added with the completion of Express Towers.
DELHI - Residential
Construction and launch of prime residential projects were observed in Delhi and the suburbs during the last six months.
Demands for independent bungalows continued to rise in prime locations in Delhi, though supply levels remained low.
- The second half of 2004 saw increased leasing of medium to high-end residential projects in Gurgaon. Amongst the prime residential projects, Unitech, Vipul and DLF have launched approximately 850 prime apartments, and 570 villas in Gurgaon over the last six months.
There was an appreciation of 10-15 per cent in the capitals values across all micro markets in the NCR from the levels prevailing in the second quarter of 2004. The rate of escalation in prices reduced marginally towards the end of the fourth quarter of 2004. The rentals across all micro markets were relatively more stable.
Outlook
There has been a substantial increase in transaction activity in the Central Business District while the Suburban Business Districts continue to record stable and high demand.
This trend is likely to continue during the first quarter of 2005, and result in low vacancy levels in both these business districts. This could result in a marginal escalation in quoted rents during the first quarter of 2005, especially in the Central Business District.
Despite total transaction volumes to the tune of 8,75,000 sq. ft. in Grade `A' office space during the last six months, rents in the suburban micro-markets remained stable with the supply levels matching demand.
We might see an upward movement of the rents in the long run, due to the decline in vacancy levels and if the economic fundamentals continue to improve as predicted.
The increase in interest rates and home loan rates may have an adverse impact on the residential demand this year.
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Launch of prime residential projects
