ncr residential market · 2014-09-10 · 3 ncr residential -september 2014 summary overview...
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NCR Residential -September 2014
InINdust B
NCR Residential Market Industry Coverage: September 2014
NCR Residential Market
ICRA RESEARCH SERVICES
Corporate Ratings
Contacts:
Rohit Inamdar
+91 124 4545 847
Shubham Jain
+91 124 4545 306
Manav Mahajan
+91 124 4545817
Shachi Prakash
+91 080 49225564
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NCR Residential -September 2014
WHAT’S INSIDE?
Summary Overview
Introduction to NCR
Gurgaon
Overview
Trends and Drivers
Supply and Demand
Gurgaon Micro Market Analysis
Golf course road
Golf course road extension
Sohna road
Dwarka expressway
New Gurgaon
Noida
Noida Micro market analysis
Noida
Greater Noida
Greater Noida west
Yamuna Expressway
Analysis of recent trends
Regulatory changes
Funding and liquidity issues
Weak macroeconomic indicators
Company Section
DLF Limited
Omaxe Limited
Unitech Limited
Parsvnath Developers Limited
Vipul Limited
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NCR Residential -September 2014
Summary Overview
Population migration to the capital is the major driver for real estate development in the region around New Delhi which is the hub of
bureaucratic power as well as the commercial centre of North India. Employment opportunities in the government sector as well as
development of various trading and service industries have given a big boost to the economy and population migration to the capital. Saturation
of office space in Delhi as well as need for additional room to accommodate the growing population led to the development of the National
Capital Region (NCR) which is spread over total area of around 34144 square kilometers1 and consists of the National Capital Territory(NCT) of
Delhi along with select urban areas from the neighboring states of Haryana, Uttar Pradesh and Rajasthan.
Out of the various regions of NCR, Gurgaon in the south and Noida and Greater Noida in the east have emerged as the key micro-markets.
Proximity to Delhi, availability of large land parcels, access to talent pool and enhanced connectivity by means of road and metro network have
made these satellite towns preferred destinations for corporates to set up their offices, driving the real estate activity in these regions.
The Gurgaon micro market can be subdivided into Golf Course Road, Golf Course Road Extension, Sohna Road, Dwarka Expressway and New
Gurgaon regions. The Golf Course Road and Sohna road markets are developed markets with product profile in mid to luxury segment, the other
micro markets of Dwarka expressway, New Gurgaon and Golf Course Extension are still in developing stage. The Gurgaon micro market is also
witnessing major infrastructure developments like development of Rapid Metro phase II, KMP expressway, Dwarka expressway, extension of
metro line from Dwarka sector 21 to New Gurgaon region, etc which are expected to create a positive impact on the overall market scenario.
Although there have been significant delays in completion of most of these infrastructure projects, the real estate market is expected to reap
significant benefits post completion of these projects. Thus while price affordability relative to Delhi, proximity to Delhi and employment
opportunities remain the major drivers, the overall development of the social and physical infrastructure in Gurgaon will remain a key
determinant of future growth.
Following the weak macro-economic scenario resulting in subdued real estate demand and rising cost structure, both developers and buyers are
taking a cautious approach. As per ICRA research2, golf course road extension and new Gurgaon have remained the most active micro markets in
Gurgaon witnessing maximum launches. The total area under development in the Gurgaon market stood at 66.11 million square feet (sqft) as on
March 2014 end. Of the total area, about 40.7% was in the New Gurgaon region followed by 31.6% million sqft in the Golf Course Road
1 As per 2012-13 annual report of National Capital Region Planning Board
2 ICRA Research has considered 44 ICRA rated projects across various micro markets in Gurgaon
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NCR Residential -September 2014
Extension region. ICRA Research also estimates total unsold inventory in Gurgaon at 18.82 million sqft with 63% unsold inventory being in the
Golf course road extension and New Gurgaon; commensurate with the surge in supply in these two regions in the backdrop of slowdown in real
estate demand. . We believe in the near term, improvement in sales velocity will take precedence over new launches
New Okhla Industrial Development Authority (NOIDA) is part of Uttar Pradesh sub region and was established in 1976 to be developed as an
industrial township. Over the years, this micro market has emerged as a major hub for IT and manufacturing industries leading to increased
population and work force participation, thus serving as a demand driver for real estate activity. With migration to the satellite town of Noida
exceeding the planned estimates, development extended to new regions of Greater Noida, Greater Noida West and Yamuna expressway. While
the Noida and Greater Noida markets are largely mature markets with limited new launches in the recent past, Greater Noida West and Yamuna
expressway have seen flurry of real estate activity. While developed infrastructure is one of the key drivers for real estate development in Noida
and Greater Noida region etc, protests by farmers and land acquisition issues have been a major dampening factor in the past. However with the
same now being resolved to a major extent, construction work has picked up pace. Limited fresh launches and stable demand are expected to
result in some price appreciation for the Noida and Greater Noida micro markets. On the other hand, micro markets of Greater Noida West and
Yamuna expressway which have witnessed several new launches from the second half of 2012 are showing appreciation of capital values,
indicating renewed interest in these markets. Like in Gurgaon, completion of planned and ongoing physical and social infrastructure facilities will
remain the key determining factors for the region.
On the regulatory front, approval of land pooling policy by Delhi Development Authority (DDA) is expected to unlock significant portion of land
for residential and commercial development. The increased supply in Delhi could have adverse impact on the real estate demand in the micro
markets of Gurgaon and Noida, although other factors like circle rates, infrastructure facilities will also play an important role. Further approval
for establishing real estate investment trusts(REITs) by SEBI would enable retail as well as institutional investors to channelize their investments
into India’s realty sector bringing in the much needed liquidity. The Union Budget 2014-15 also brings in various positives for the sector such as
reduction of FDI eligibility threshold, allocation of funds for development of smart cities and more focus on development of Public Private
Partnership(PPP) and SEZ projects. However tight monetary policy and weak economic growth is expected to keep the demand subdued in the
medium term. Profitability of developers to remain under pressure as cost inflation remains stubbornly high leading to rise in cost of key inputs
like steel and cement. Further funding avenues are expected to remain scare with tightening of lending norms by banks and reduced inflows
from other sources such as private equity investments.
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NCR Residential -September 2014
CORPORATE OFFICE Building No. 8, 2nd Floor, Tower A, DLF Cyber City, Phase II, Gurgaon 122002 Ph: +91-124-4545300, 4545800 Fax; +91-124-4545350 REGISTERED OFFICE 1105, Kailash Building, 11th Floor, 26, Kasturba Gandhi Marg, New Delhi – 110 001 Tel: +91-11-23357940-50 Fax: +91-11-23357014
CHENNAI Mr. Jayanta Chatterjee Mobile: 9845022459 Mr. Leander Rayen Mobile: 9952615551 5th Floor, Karumuttu Centre, 498 Anna Salai, Nandanam, Chennai-600035. Tel: +91-44-45964300 Fax: +91-44-24343663 E-mail: [email protected] [email protected]
HYDERABAD Mr. M.S.K. Aditya Mobile: 9963253777 4A, 4th Floor, Shobhan, 6-3-927/A&B, Rajbhavan Road, Somajiguda Hyderabad 500 082. Tel: +91-40-40676500 Fax: +91-40- 40676510 E-mail: [email protected]
MUMBAI Mr. L. Shivakumar Mobile: 9821086490 3rd Floor, Electric Mansion, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025 Ph : +91-22-30470000, 24331046/53/62/74/86/87 Fax : +91-22-2433 1390 E-mail: [email protected]
KOLKATA Ms. Vinita Baid Mobile: 9007884229 A-10 & 11, 3rd Floor, FMC Fortuna, 234/ 3A, A.J.C. Bose Road, Kolkata - 700020 Tel: +91-33-22876617/ 8839, 22800008, 22831411 Fax: +91-33-2287 0728 E-mail: [email protected]
PUNE Mr. L. Shivakumar Mobile: 9821086490 5A, 5th Floor, Symphony, S. No. 210, CTS 3202, Range Hills Road, Shivajinagar, Pune-411 020 Tel : +91- 20- 25561194, 25560195/196, Fax : +91- 20- 2553 9231 E-mail: [email protected]
GURGAON Mr. Vivek Mathur Mobile: 9871221122 Building No. 8, 2nd Floor, Tower A, DLF Cyber City, Phase II, Gurgaon 122002 Ph: +91-124-4545300, 4545800 Fax; +91-124-4545350 E-mail: [email protected]
AHMEDABAD Mr. Animesh Bhabhalia Mobile: 9824029432 907 & 908 Sakar -II, Ellisbridge, Ahmedabad- 380006 Tel: +91-79-26585049/2008/5494, Fax:+91-79- 2648 4924 E-mail: [email protected]
BANGALORE Mr. Jayanta Chatterjee Mobile: 9845022459 'The Millenia', Tower B, Unit No. 1004, 10th Floor, Level 2, 12-14, 1 & 2, Murphy Road, Bangalore - 560 008 Tel: +91-80-43326400, Fax: +91-80-43326409 E-mail: [email protected]
Please contact ICRA to get a copy of this report
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NCR Residential -September 2014
Please contact ICRA to get a copy of this report
ICRA Limited An Associate of Moody's Investors Service
CORPORATE OFFICE Building No. 8, 2nd Floor, Tower A; DLF Cyber City, Phase II; Gurgaon 122 002
Tel: +91 124 4545300; Fax: +91 124 4545350 Email: [email protected], Website: www.icra.in
REGISTERED OFFICE 1105, Kailash Building, 11th Floor; 26 Kasturba Gandhi Marg; New Delhi 110001
Tel: +91 11 23357940-50; Fax: +91 11 23357014
Branches: Mumbai: Tel.: + (91 22) 24331046/53/62/74/86/87, Fax: + (91 22) 2433 1390 Chennai: Tel + (91 44) 2434 0043/9659/8080, 2433 0724/ 3293/3294, Fax + (91 44) 2434 3663 Kolkata: Tel + (91 33) 2287 8839 /2287 6617/ 2283 1411/ 2280 0008, Fax + (91 33) 2287 0728 Bangalore: Tel + (91 80) 2559 7401/4049 Fax + (91 80) 559 4065 Ahmedabad: Tel + (91 79) 2658 4924/5049/2008, Fax + (91 79) 2658 4924 Hyderabad: Tel +(91 40) 4067 6500, Fax + (91 40) 4067 6510 Pune: Tel + (91 20) 2552 0194/95/96, Fax + (91 20) 553 9231
© Copyright, 2014 ICRA Limited. All Rights Reserved.
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NCR Residential -September 2014
All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable. Although reasonable care has been taken to ensure that the information herein is true, such information is provided 'as is' without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. All information contained herein must be construed solely as statements of opinion, and ICRA shall not be liable for any losses incurred by users from any use of this publication or its contents.