Delhi real estate: a saga of metamorphosis

The Property Market Across The City

Central Delhi has retained its character. In most aspects,it still epitomises Lutyens Delhi with its government accommodation,row houses around the CBD and the time-honoured shopping and office hub of Connaught Place. However,even the corridors of power now feature more contemporary commercial buildings,and swanky modern houses have been built on plots for residential development. This happened when older landowners saw the advantages of monetising their land assets,either via sale or agreements,to unlock the value of their land holdings.

North Delhi has transformed from a low-income cluster to a region that edifies the aspirations of Delhis middle-income group. Plotted row houses predominate,but the relatively lower land values have recently led to the launch of the first handful of apartment projects in this precinct. The result is a perceptibly taller skyline. Changing FSI norms have also led to a more rational development spread,resulting in bigger,better residential units and projects.

With land at a premium across most parts of the city and demand for quality spaces on the increase,joint development agreements have become a norm. This has led to the popularity of independent floors on residential plots,and also denser inhabitation per square kilometre. North and West Delhi are home to the citys traditional business class,which migrated there from the Old Delhi region. This fact reflects in the sprawling bungalows and designer floors which are driving residential demand there.

With a larger component of the middle-income group gravitating to these residential clusters,office developments have also sprung up over the last 8-10 years. The highest concentrations of these are in Pitampura,Janakpuri and Rajendra Place,with a gradual progress towards Rohini.

East and North East Delhi present a melange of well-planned plotted colonies and narrow-laned,unplanned residential clusters. Cooperatives and DDA-promoted apartment projects in Mayur Vihar and IP Extension stand juxtaposed to plotted row house colonies. A notable phase in the evolution of this regions real estate development have been the Commonwealth Games Village and the host of infrastructure improvements it brought with it. These have added significantly to the lifestyle quotient of this residential corridor,which has one of the highest population densities in Delhi.

Dwarka began development as a residential cluster around 15 years ago. The cooperative housing societies planned were expected to address,at least partially,the exploding demand for housing in the city. Over the last decade,Dwarka has been added to the Delhi real estate map as a thriving sub-city that offers the advantages of proximity to the airport as well as the established office corridor of Gurgaon. These factors have added to Dwarkas attractiveness for home buyers.

South Delhi has its own distinct identity,with big,lavish houses sharing walls and boundaries with urban villages. It continues to be the address of choice,a symbol of having arrived in life.

Limited plots have fueled real estate prices in South Delhi,and independent designer floors are the configuration of choice by both developers and buyers to yield maximum monetary benefit.

The district centers of Jasola and Saket have added more office space inventory to the traditional office hub of Nehru Place and office space uptake in the Okhla and Mathura Road industrial clusters. This has led to a spurt in commercial real estate demand and also established business destination addresses for corporates who were initially averse to operating out of the suburbs.

Gurgaon and Noida

The suburbs of Gurgaon and Noida emerged as alternative office and residential destinations to the prime city,owing largely to their relative affordability. Residential real estate growth in these clusters was a by-product of the commercial office development,which catalysed the residential property boom in these markets. Today,they together account for almost 90 per cent of the new residential units that are added to the NCR residential market.

With the massive white-collar workforce employed in Gurgaon and to a lesser extent in Noida,commuting time to work is a vital factor in real estate decisions. This is the primary driver for the demand for accommodation in these clusters. The considerable availability of land banks has boosted the creation of these urban agglomerations on Delhis periphery. A mix of office and residential projects has brought the skyline closer,while the prime city maintains its inherent structure albeit cosmetically enhanced in response to the need of changing times and trends.

Today,Delhis landscape has also been transformed by the Metro which spans the entire city. This major infrastructure enhancement has once again vitalised property development and,in turn,added value to real estate assets in the city. Continuing land availability limitations and stringent FSI norms mean that the future commercial office space development will be increasingly restricted.

Residential demand will continue to grow exponentially,and the results can be seen in the various residential apartment projects being launched by the DDA. Also,the fact that a host of government agencies such as the Railways and the Transport Authority are monetising their land holdings will see a lot of mixed-use real estate development around the city,as the demand for both office space and residential accommodation shows no signs of abating.

Author is Manager,Research and REIS,Jones Lang LaSalle India