While studying the real estate market in Delhi, it is pertinent to note that the country’s capital was – according to legend – destroyed seven times; each time, it came back to life like the proverbial phoenix. Of course, no such cataclysm has happened in recent times, nor is any expected to happen. Nevertheless, this fact goes some ways into explaining why the Delhi real estate landscape has always been in a state of steady metamorphosis.
Over the last 15 years, the face of Delhi real estate has changed visibly. Standalone houses have gradually been giving way to cooperative housing societies, private developer apartments and independent designer floors. In commercial real estate, sprawling business hubs have developed at a fair distance from the traditional city centre, Connaught Place.
The Delhi property market across the compass
Central Delhi has retained its character. In most aspects, it still epitomizes Lutyens’ Delhi with its Government accommodation, row houses around the CBD and the time-honored 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 monetizing their land assets, either via sale or agreements, to enhance the value of their real estate.
North Delhi has transformed from a low-income cluster to a region that edifies the aspirations of Delhi’s 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 popularization of independent floors on residential plots, and also denser inhabitation per square kilometer. North and West Delhi are home to the city’s 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 there over the last 8-10 years. The highest concentrations of these are in Pitampura, Janakpuri andRajendra 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 region’s 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.
The relatively recent development of the residential cluster of Dwarka actually began around 15 years ago, when it was promoted as an upcoming residential destination. The cooperative housing societies planned there 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 residential cluster that offers the advantages of proximity to the airport as well as the established office corridor of Gurgaon. These factors have added to Dwarka’s attractiveness to 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 for the swish set, to whom an address there represents a signal 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 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 catalyzed the residential property boom in these markets. Today, they together account for almost 90% to 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 Delhi’s 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, Delhi’s landscape has also been transformed by the Metro which spans the entire city. This major infrastructure enhancement has once again vitalized 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 monetizing their land holdings will yield a lot of mixed-use real estate around the city, as the demand for office and residential accommodation shows no signs of abating.
The author, Rohan Sharma is Manager, Research and REIS, Jones Lang LaSalle India
