Corridor of growthCorridor Description and Rating

N E W G U R G A O N

Areas Included: Sectors 76, 77, 78, 79, 79A, 79B, 80, 81, 81A, 82, 82A, 83, 84, 85, 86, 88, 88A, 88B, 89, 89A, 90, 91, 92, 93, 95 and 95A

Fig 1: Map of the corridor

Corridor of growth (COG)02

About the CorridorIntroduction: New Town Gurgaon consists of development across Sectors 76 to 95B of the Gurgaon-Manesar Urban Complex-2031 Master Plan. In total there are 30 sectors which cover development in residential, commercial and public & semi-public segments. National Highway-8 (NH-8) divides the corridor into two parts. Part one consists of the area under Sectors 76 to 80 which falls towards the south of NH-8. Other Sectors (81 to 95B) are towards the north of the highway with the Delhi-Rewari Railway Line forming the northern boundary of this part.

The Northern Peripheral Road (NPR) or Dwarka Expressway forms the eastern boundary of part two and is contiguous with Sectors 83, 84, 88, 88A and 88B. Once completed, it will join NH-8 at Kherki Dhaula. While Dwarka Expressway will enhance connectivity with this part of the corridor, connectivity is not limited to it. The sector roads of 81A/82A and 82A/83 open into service roads on the side of NH-8. These sector roads also provide access to other sectors situated away from NH-8. Pataudi Road is another existing road which provides connectivity to old Gurgaon.

A 3.2-km Central Peripheral Road (CPR) is planned which will connect Dwarka Expressway with the Southern Peripheral Road at intersection of Sectors 84 and 88.

The main access road for Sectors 76 to 80 is NH-8 and the sector roads are planned to open on the service roads on the side of NH-8 at three locations. As per the Master Plan the sector road of 78/80 and 77/78 will connect directly with the sector roads across NH-8. A 60-meter wide road is planned which will connect Sectors 76, 77, 78, 79, 79A and 79B to the Southern Peripheral Road.

Current Status: Sectors north of NH-8 are not dependent only on Dwarka Expressway for connectivity to other parts of Gurgaon. Because of this, many projects in these sectors have obtained complete or partial Occupancy Certificates (OC) and families have already starting living here.

From the budget perspective, 63% supply in the re-sale segment in the corridor is in the Rs 60 lakh to Rs 1 crore budget segment with Rs

60-80 lakh and Rs 80 lakh-Rs 1 crore having almost equal share. The 3BHK is the dominant format with more than 50% share of supply. The corresponding share of 2BHK segment is 28%. The average covered area of 3BHK units is 1750 sq ft while that of 2BHK is 1200 sq ft.

The average price in the corridor is Rs 4,958 per sq ft. The average price on both sides of NH-8 is almost the same. The large average size of apartments means that even for manageable capital value (Rs/sq ft), the total acquisition cost (in Rs Lakh) will be high.

Sectors 82, 83 and 86 are the top three sectors in terms of supply and consumer preference. They account for almost 40% of consumer preference as well as supply in the corridor.

Infrastructure: The Haryana Urban Development Authority (HUDA) is in the process of acquiring land for various development works like laying of sector roads, water supply, storm water drainage, recycled water circulation and sewerage system in these sectors. In case of Sectors 81 to 95, it had fixed the compensation amount for land acquisition in November 2015. This land is to be used to implement infrastructure like sector roads and water distribution network.

For Sectors 68-80 (of which 76-80 fall in the corridor), water supply network is likely to be implemented by the mid of next year. HUDA was facing land acquisition issues in these sectors for laying the infrastructure.

Many projects at present rely on ground/bore-well water and water tankers. Electricity in some cases is also being supplied through generator sets till power connection is made available. Therefore, it is advisable that buyers do a thorough check on these parameters in the projects they are exploring.

New Development Policies & Impact on Dwarka Expressway :The Haryana Government has introduced two new policies which will impact the real estate sector in terms of supply and price levels.

These policies are:

a) New Integrated Licensing Policy 2015 (NILP-2015): Under NILP-2015, the minimum

area norms for developing a residential plotted colony has been reduced from 100 acre to 25 acre. Earlier the residential development was restricted to 20% of the net planned area of a sector and the balance land remained unused. Under NILP-2015, licenses will be granted for area beyond 20% allowed in each sector for Group Housing. Land which was hitherto lying unused will become available for developing residential colonies.

b) Transit Orient Development (TOD) Policy: The state government has come out with the Transit Orient Development Policy which aims to encourage commercial & residential development along the Mass Rapid Transit System (MRTS) Corridor. Under the policy, areas which fall under certain distance on either side of the MRTS Corridor will be eligible for increased Floor Area Ratio (FAR). This will be available even if applicable FAR as per original development norm for the area has been exhausted.

Dwarka Expressway has a Metro Corridor planned along its alignment. The area to the west of the expressway in the corridor will be eligible for higher development. This will put more residential and commercial developments in the market.

Present Status: The Northern Peripheral Road (NPR), more famously known as the Dwarka Expressway, is a 150-meter wide and 18-km long road which will connect Dwarka in Delhi with Kherki Dhaula on the National Highway-8 (NH-8) in Gurgaon. The project was commissioned in 2007 and while most of the project (14 km out of 18 km) has been completed, it has not become operational as some key patches of the alignment are stuck in litigation.

We present below the key points which summarize the present scenario with respect to NPR and also highlight the key challenges holding up the completion of the road.

a) Ministry for Road Transport, Highways and Shipping has recently announced the granting of National Highway status to NPR. As and when this actually happens, the land acquisition, construction and management of the road will be undertaken by the National

Properties available in the corridor

New town Gurgaon is a big corridor and comprises of projects spread across 26 sectors. Therefore, a wide variety

of supply across different formats, sizes and price points is available. The dominant

budget segments are the Rs 60-80 lakh and Rs 80 lakh-Rs 1crore brackets with 33% and 30% share, respectively. The higher budget segment of Rs 1-1.4 crore contributes further 18% supply. The average per sq ft rate in

the corridor is under Rs 5,000 per sq ft. The higher acquisition cost is because the average size of apartments is on the higher side. This increases the overall purchase cost. Another indication of larger sized apartments

Overall Connectivity Social Infrastructure Security/Water

Fig 2: Distribution of properties by price Fig 3: Distribution of properties by delivery status Fig 4: Distribution of properties by bedroom configuration

Corridor of growth (COG)03

Highway Authority of India (NHAI). This is expected to speed up clearance of pending issues. NHAI is in the process of undertaking a Detailed Project Report (DPR) of the expressway. However, the timelines for actual process of final notification and takeover by NHAI are not clear at present.

b) HUDA is planning to make 13.5 km stretch of Dwarka Expressway operational by August 2016. This stretch is free of any litigation and most of the work has been completed. It will connect to NH-8 at Kherki Dhaula through an underpass or a flyover. This will provide the much required connectivity between sectors and other areas of Gurgaon through NH-8 as well as the existing access roads.

c) A Central Peripheral Road (CPR) will connect NPR with SPR. Land acquisition for implementing this project is under progress.

d) The Haryana Urban Development Authority (HUDA) had reached a settlement with residents in New Palam Vihar and Kheri Dhaula whose homes were to be acquired for implementation of the NPR. The litigation had been holding up road construction activity in Sector 110 towards Delhi and Kherki Dhaula

near NH-8. As part of the settlement plan, HUDA will allot alternate plots to around 700 families in Sectors 37C and 110A. However, this process has not yet been completed due to difference of opinion between litigants and HUDA on various aspects of the land allotment plan. Consequently, construction activity on the incomplete stretches has not yet started.

e) The final 1.3 km stretch of the Dwarka Expressway which connects to Delhi actually falls in Delhi and development here is the responsibility of the Delhi Development Authority (DDA). However, DDA has not yet acquired land for implementing this stretch of the road. No clear timelines are available on when this will be completed. Therefore, even if HUDA completes its part of the Dwarka Expressway, connectivity to Delhi might still not be available.

f) The Railway-Over-Bridge (ROB) on the Delhi-Rewari Line is yet to be completed. As the ROB ends towards Sector 99, a factory exists in the alignment of NPR. This factory is yet to be removed for work to be completed.

g) There are other flyovers planned at some critical junctions along the expressway but

their development timelines are not clear.

Outlook: New Town Gurgaon offers a relatively less expensive residential option to consumers along with integrated development of commercial and retail segments. The biggest strength of this corridor is that it does not rely on the Dwarka Expressway becoming operational for beginning habitation in the projects. Dwarka Expressway becoming operational will add to the convenience of the consumers.

Accessibility is an issue with additional cost having to be incurred by way of toll plaza at Kherki Dhaula. However, there are discussions to remove the toll plaza or remove the need to pay toll by residents in the area.

From a price perspective, this is a buyer’s market. There is over-supply in the market and transactions have been slow. In such a scenario, a buyer can negotiate good discounts from the seller, bth in the primary as well secondary markets.

In terms of development, the corridor will take 3-4 years to evolve into a mature residential hub.

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Sectors which have scored high on consumer preference in terms of rental demand are those which have already

seen habitation. That is why the top 5 sectors

account for 71% share of rental demand. Many buyers have taken possession of their homes and are living in these sectors. These sectors also have access roads which connects them

with National Highway-8 (NH-8) and through it with other parts of Gurgaon as well as office hubs. The sectors lack in support infrastructure but make up for that by way of low rentals.

dominating the supply is the fact that 56% apartments are in the 3BHK format, with another 15% in the 4BHK & above category. Only 28% supply is in the 2BHK format, while 64% of 3BHK units are in the 1600-2000 sq ft range while 82% of 4BHK & above format is in the 2200 sq ft to over 2,600 sq ft range. As opposed to this, bulk of the 2BHK supply is in the 1000-1200 sq ft range.

The top 5 sectors by supply account for 54% as development activity is not even across the corridor. The price is also not uniform across the sectors and depends upon the relative location of the sector in the corridor. Buyers have a choice between under-construction and ready-to-move-in properties.

Sales Price Covered Area ( Lacs) (Sq.ft)

1 BHK 14-40 550-700

2 BHK 35-80 1000-1500

3 BHK 58-150 1300-2500

4 BHK and Above 85-225 1900-3800

Best sectors to invest in a home Based on rental demand in sectors

Table 1: Sizes and prices of flats available for various room configurations

Based on home buying demand in sectors

Fig 5: Top 10 sectors by consumer for renting a house

Fig 6: Top 10 sectors by consumer for buying a house

Best bedroom configurations to buy Preferred buying and renting options

Buying Renting Total (BHKs) Total (BHKs)

1 BHK 1% 0%

2 BHK 28% 25%

3 BHK 56% 60%

4 and Above 15% 15%

Table 2: Demand distribution for buying and renting

Consumer preference by sectors for home purchase follows almost the same pattern as the home renting scenario.

There are only few minor variations because unlike rental housing where consumers will

go only for sectors with ready-to-occupy properties, home purchase can happen for under-construction projects as well. However, consumers continue to prefer sectors which have seen some habitation and have existing

access roads. Within these sectors, buyers can choose between ready and under-construction properties. Sectors with relatively low capital value feature in buyer preference but with low share of demand.

Consumers prefer the 3BHK format in the corridor. About 56% consumers are looking for 3BHK format in the

Rs 60 lakh-Rs 1crore bracket.

The most preferred configurations in the corridor is the 3BHK category in terms of demand and the 2BHK is the second most

preferred format with bulk (28%) of the demand in the Rs 40-60 lakh segment. The demand distribution for 1BHK and 4BHK is less as compared to 2BHK and 3BHK in this corridor.

In fact, the rental options are avialble mostly in the 2BHK and 3BHK category.

Price changes and future prospects Historic Price movement

6 monthly change Yearly change

-2% -3%

Table 3: Historical Price changes

In line with general market trend in Gurgaon, the average capital value in New Town Gurgaon corridor has seen a decline over last

5 quarters. The decline in overall price level is due to various factors.

Gurgaon real estate market has historically witnessed strong investor participation. This segment is no longer active with many investors trying to exit by offering properties at discounted rates.

This is one the reasons for price decline. Other is that end-user has been vary because of infrastructure issues which impact liveability. Sales have been down and incentives by way of cash discounts or attractive payment schemes have been offered by developers to attract buyers.

Fig 7: Historical Price changes of corridor

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Price movement for top sectors by Consumer Preference

The quarterly price drop in the sectors with highest demand mirrors the general trend in the corridor and the Gurgaon market. These sectors account for most of the development in the corridor. In

addition, many end-users have already started living in some of the apartment projects.

There is unsold inventory in the market as well as considerable supply in re-sale market. Price drop can be on account for existing owners/investors offering discount to exit their investments.

These discounts are more likely to happen for under-construction properties as buyers prefer ready-to-move-in options to guard against development risks. This way they don’t have to pay EMI as well as rent which adds to financial burdenFig 8: Price changes in top sectors by consumer demand

Master Plan

The zone comprises of residential, commercial and institutional sectors. Except for Sectors 87, 88 and 89B, all

others are residential in nature. While Sectors 87 and 89B are public and semi-public in nature, Sector 88 is a commercial sector.

A commercial belt runs along the Dwarka Expressway in the corridor. A similar commercial belt exists between NH-8 and Sectors 81A, 82A and 83. A 75-meter wide road with a 60-meter wide multi-utility corridor on one side is planned which will connect part of the corridor to IMT Manesar.

This road will further connect to the Southern Peripheral Road through the proposed Central Peripheral Road.

Corridor of growth (COG)06

Fig 9: Land use of various sectors in the corridor

RESIDENTIAL COMMERCIAL PUBLIC AND SEMI-PUBLIC INDUSTRIAL OPEN SPACES

Is New Gurgaon the new investment hot spot?

New Gurgaon comprises the newly developed sectors. It is well connected with three major highways, which are National Highway 8 (NH8), Kundli–Manesar–Palwal Expressway and Dwarka-Gurgaon Expressway. The workforce of Manesar and Gurgaon are eyeing at the new developing sectors. The three main corridors NH-8, Dwarka-Gurgaon Road (Northern Peripheral Road) and Gurgaon-Sohna Road (Southern Peripheral Road) connect Gurgaon with other parts of NCR. This indicates that the area is equipped in terms of physical infrastructure. New Gurgaon posses like schools, shopping marts, restaurants and hospitals which make it a well attributed locality.

n Source: Magicbricks Bureau

NH8 - A viable investment corridor

NH-8 covers a stretch of 15km through Haryana and presents multiple options for investors in search of early-bird investment opportunities. This location holds great investment potential due to the enhanced connectivity that NH-8 provides to Manesar and Dwarka. As prices soar in new locations of Gurgaon like Dwarka-Gurgaon Expressway, Golf Course Extension Road, and Main Gurgaon Sohna Road buyers have started looking at these alternative locations. Delhi-Mumbai Industrial Corridor, which lies on NH-8, is one of the prime factors helping attract buyers and investors to this region. The government of India, in collaboration with the Japanese government, is developing the project.

n Source: The Times of India

New Gurgaon holds great promise

One of the key attributes of New Gurgaon is its connectivity with Delhi through the expressway, the proposed Metro link and bus services. It is also well connected through the expressway to Neemrana, which includes a 1,200-acre Japanese zone, and to Jaipur. It has emerged as one of the favourite destinations for real estate development in the NCR after the toll for commuters between Delhi and Gurgaon was discontinued and traffic became smoother on NH-8.The master plan of Gurgaon has planned the physical infrastructure comprising roads, power, sewage disposal mechanism, sanitation and water supply well. Social infrastructure comprising schools, colleges, malls and entertainment avenues have been planned.

n Source: The Times of India

Godrej sells over 200 flats in 3 weeks

Godrej Properties Ltd, the real estate development arm of the Godrej Group, announced that it has sold over 200 apartments, with an area over 400,000 sq. ft. in Sector 89A/88A of Gurgaon. Spread over 9 acres, Godrej Icon consists of 9 towers including a 32 storey Iconic tower. Godrej Icon will offer various amenities including a modern 17,000 sq. ft. club houses and infinity pool, 130 feet high skywalk, services by Club Concierge, Four Fountains Spa and Holyfield Gyms.

n Source: Magicbricks Bureau

IN NEWS

Corridor of growth (COG)07

Infrastructure UpdatesDwarka Expressway

The Ministry for Road Transport, Highways and Shipping has recently announced ‘in principle’ the granting of National Highway status to NPR

NHAI is in the process of undertaking a Detailed Project Report (DPR) of the expressway.

Receipt of National Highway status should help to expedite the completion of the expressway.

Infrastructure Development

In case of Sectors 81 to 95, HUDA is in the process of land acquisition for implementing infrastructure like water, sewerage, sector

roads etc. It had fixed the compensation amount for land acquisition in November 2015.

For Sectors 68-80 (of which 76-80 fall in the corridor), water supply network is likely to be implemented by the mid of next year.

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