Gurgaon is still an investor’s gold mine
Feb 12, 2014
Source : The Times of India

 

DELHI: Gurgaon—one of the most promising realty markets in India—began its innings as the Millennium City with the creation of high-quality commercial spaces.

The value-for-money pricing in this suburb, along with large floor plates, attracted corporates to shift from the country’s capital, making Gurgaon a prime commercial address in a short span of time.

Backed by a strong corporate and industrial base, Gurgaon has emerged as an independent micromarket from New Delhi, with the third highest per capita income in the country.

Gurgaon stands tall now, as an outsourcing hub for many global Information Technology (IT) and IT-enabled Services (ITeS) companies and serves as north India’s commercial centre. Thus, many people prefer to work and stay in Gurgaon owing to its employment opportunities. Some of the finest condominiums and gated communities, offering world-class amenities, have come up here to cater to the demand from this aspiring educated professionals.

Focused infrastructural development initiatives including development of the Gurgaon Rapid Metro rail and the Southern and Northern Peripheral roads, have added to the appeal of the city, positioning Gurgaon as a prime investment opportunity for corporates, hospitality chains, and other institutional real estate developers. Gurgaon’s proximity to the airport is an added advantage.

The properties have thus far fetched good returns and Gurgaon is a favourite market for investors, second-home owners, NRIs, and global Indians. Many speculators and short-term investors have made overnight riches here in the last couple of years. However, with the nervous macroeconomic situation, both globally and domestically, Gurgaon is going through a mixed mood this year. To be sure, there are five things that investor should be clear about before investing in Gurgaon.

One, absorption is better in the affordable and mid-income segment of Gurgaon’s residential market. “Anything which is affordable and mid-segment ranging from Rs 3,000 per sq ft to Rs 5,500 per sq ft, anywhere in the NCR today, is moving and will continue to be absorbed because this is the product people are looking for and it is in short supply,” Sandeep Katiyar, CEO of Century 21 India, says. So, if you are investing with the right brand of developer, offering the right product mix at the right price, you will gain in the long term.

Two, Gurgaon is not the market for speculators any longer. Traders in property have been scared out of the market by their perception of lack of instant returns, according to some experts. Genuine end users and buyers looking to use the property as their primary residence are driving current demand, they say.

Three, Gurgaon market has entered a very interesting phase in its evolution-a phase of maturity and consolidation.

Samarjit Singh, MD of India-Homes, says: “Many micro markets have seen turbulent times but demand for prime Gurgaon remains robust and even the limited launches are meeting with great success provided location and price point are perceived to be good value.”

The emergence of new micro markets like Dwarka Expressway presents opportunities for middleclass and upper middle-class buyers, with a budget range of Rs 3,500-7,500 per sq ft, to invest in residential real estate for end use and capital gains in Gurgaon.

Four, even though luxury is going slow, Gurgaon will always see its fair share of luxury launches. The prospects will improve from 2014 end. With corporate honchos staying in Gurgaon with big fat salary packages, branded homes is a segment which will stay with brand Gurgaon in the future too, experts say.

Recently, Yoo Worldwide LLP-a global design, development, and branding firm-announced its partnership with Supertech to create two luxurious residential projects in Gurgaon’s Sectors 68 and 79.

John Hitchcox, chairman of Yoo, says: “Yoo is excited to work with Supertech, India’s leading real estate developer on this unique project. Jade has a special relationship with India and the country’s culture and style having lived here for over 20 years. She and Steve are two of the very best designers and will create two beautiful residences in this buzzing city.”

DLF has launched yet another luxury project, Camellias, which will offer apartment of 7,400-9,500 sq ft and penthouses of 13,000 and 16,000 sq ft-the average value of a flat is Rs 20-25 crore, all inclusive depending on size.

Ansal Buildwell has come up with a new series of Florence Residency in Sushant Lok II and III, in Sectors 56 and 57, Gurgaon. The new series of Florence Residency offer luxurious lifestyle and exclusive elegance to residents. It offers a choice of 4BHKs with well-designed living spaces, spread over three independent floors at ground, first, and second floor. The ground floor offers owners the privilege of lush green front and rear lawns, whereas the first and second floor residents will have the advantage of spacious balconies.

Five, the biggest opportunity lies in the investor’s market-majority of them are willing to exit at 10-20% lower than the market rate.

Finally, even though consumer confidence will remain subdued during the first two quarters of 2014, however, after the general election, fence-sitting investors are likely to become active. The increase in absorption of residential units will help reduce the currently large inventory holdings of developers.

This could help prices to strengthen gradually in the second half. Therefore, across India, residential real estate prices are likely to grow at 10-12% year-on-year, factoring in input-cost inflation and a gradual pick-up in demand.

It would be a fair assumption that while the Gurgaon property gold rush may be over, it is still possible for diligent long-term investors to continue to mine the market for golden

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