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India's No.1 Property Site __________
State of the Real Estate
Market – National Capital
Region
Part I – Gurgaon
DISCLAIMER:
The information in this document and all annexure are confidential and intended solely
for the addressee. The data analysis is based on research across multiple sources of
brokers, developers, development authority, end users and professionals such as
lawyers, Transaction Experts, CAs. The analysis done by MagicBricks may be taken as
an indicative and MagicBricks takes no responsibility either for accuracy of this data or
authentication of it since it is from unstructured sources.State of the Real Estate Market – National Capital Region Part I - Gurgaon CONTENTS OVERVIEW .................................................................................. 3 INTRODUCTION .......................................................................... 4 ECONOMIC DRIVERS ............................................................... 11 INFRASTRUCTURAL DRIVERS ................................................ 15 ECONOMIC INDICATORS ......................................................... 15 MASTER PLAN .......................................................................... 23 LOCATION WISE ....................................................................... 30 VALUES ..................................................................................... 48
State of the Real Estate Market – National Capital Region Part I - Gurgaon OVERVIEW The National Capital Region (NCR) comprises of the National Capital Territory of Delhi and suburban towns of Faridabad and Gurgaon in Haryana and NOIDA, Greater NOIDA and Ghaziabad in Uttar Pradesh. Much of the new real estate development is witnessed in these towns. Most of the property transactions here involve resale of old properties. MagicBricks (MB) brings to you a series of reports on the state of real estate markets in the Delhi-NCR. We begin the series with an in-depth study of Gurgaon, the city of corporates and premium real estate. As a trend-setter in the region, the future of the city’s real estate depends on how well the economic and infrastructural drivers evolve. These include Special Economic Zones, IT-ready buildings, adequate telecom infrastructure and good transit linkages including the metro, expressways and road networks. Gurgaon, one of the country’s most prominent outsourcing and off-shoring hubs, is also famous for its shopping malls and entertainment facilities. MB has compiled a Situation Analysis on the basis of an extensive street by street, building by building research. The report will provide an analysis of how real estate values serve as a monitor to the number of economic drivers, quality of services and infrastructure and efficiency of civic services.
State of the Real Estate Market – National Capital Region Part I - Gurgaon INTRODUCTION The Gurgoan market is characterized by structured real estate. There are 8 broad parameters that impact the efficiency of the real estate which is reflected in the values. These include 1) Location 2) Quality of building and maintenance 3) Façade 4) Internal services such as high-speed capsule lifts 5) Adequate water and power with 100% back-up 6) Accessibility and transit corridors 7) Parking 8) Social infrastructure such as residential areas in vicinity Location The initial driver of property sale in Gurgaon was its proximity to Delhi. Currently it is driven by accessibility and facilities. As a result, the developments of malls, offices and residential locations have moved from the arterial MG Road and NH8 to inner sector roads or erstwhile far flung areas such as Sohna Road, Sushant Lok Phase II & III and South City II. The first and most critical parameter for any property is its location. The definition of location has changed and evolved over the last decade. Today location really means accessibility through wide roads, preferably with inner service lanes, well lit roads, not very close to urban villages, with adequate arrangements for security. Façade & Maintenance The Gurgaon market set the trends for maintenance of facilities by developers. While the first step was erecting beautiful steel and glass facades, the winners today are the one who also evolved stringent parameters to keep the facilities looking good too. Issues such as optimum use of glass with more energy efficient structures to reduce cooling costs are being tackled at the level of developers as well as users. Developers such as DLF, Unitech, Vipul, Vatika, and Parsvnath have their own facility management companies while those like Sahara and Ambience Infrastructure have chosen to outsource these facilities to consultants and other property management companies. Structured maintenance charges are the norm in most developer run properties. They range between Rs 11-15/ Sq Ft/ month for offices, Rs 18/ Sq Ft/ month for air conditioned malls and Rs 0.75-2/ Sq Ft for residential apartments. Where the developer is investing in generators to provide back-up power, costs in residential areas can go up to as much as Rs 6/ unit. Shopping complexes typically charge about Rs 2-4/ Sq Ft for maintenance and are managed by Market Associations. Maintenance typically includes facade cleaning, landscaping, housekeeping, garbage disposal, upkeep of mechanical and electrical equipments and power and air
State of the Real Estate Market – National Capital Region Part I - Gurgaon conditioning. The cleanliness of the building and its surroundings as well as the landscaping features within it impact values. High Speed Capsule Lifts The time taken to reach the floor of your choice has been impacting off take of space and the quality of users coming into buildings both offices and residential. As a result, even good Cooperative Group Housing Societies (CGHS) are investing in high-speed larger lifts. This is only possible where there are economies of scale and usage or where the users are willing to pay a premium for the same. Water and Power with 100% back-up In a city where water has traditionally been a problem area, a guarantee of 24-hour water supply was a big deal. In an effort to ensure proper supply of water Haryana Urban Development Authority (HUDA) has come up with certain measures such as setting up of control rooms which will work 24 hours and will tackle complaints relating to water and sewage. Currently HUDA has about 100 cusec of drinking water through canal-based scheme at Basai Water Treatment Plant. The authorities have now planned to enhance it to 180 cusecs. This would be sufficient to service the needs of the city as the current requirement stands at about 160 cusecs. HUDA is also taking steps to check the leakages and misuse of drinking water. HUDA has also set up a committee to monitor whether the rainwater harvesting systems installed by colonies and institutions are functioning. Power, however, continues to be a problem area and solutions seem few and far between. Residential apartments with power back-ups (either from developers or through CGHS) have become preferred locations. In retail and office complexes, 100% back-up power has already become the norm. In many instances, the developers generate and supply all the power with nothing provided by the authorities. Transit Corridors Any cluster of development by private developers largely revolves around existing or future transit links. The partial completion of the Expressway project on National Highway 8 was the first such trigger. This resulted in erstwhile unwanted areas such as the Sohna Road witnessing frenzied land deals and hectic construction schedules. The sanction of the Delhi Metro line from Gurgaon to Central Delhi through South Delhi has also resulted in several offices shifting base to the suburban city. This has translated or is expected to translate into an upgrade of quality of foot falls coming into the malls. This change is reflected in the kind of brands that occupy the retail space along the transit corridors. In some cases they also boost up the values of retail properties. Values of retail properties are also dependent on the demographic profile of the neighborhood and its accessibility from premium residential neighborhoods. Parking Parking is a key factor when it comes to choosing real estate. This has not fully evolved yet and there is heavy intake of space in places such as DLF Cyber Greens, where parking is inadequate. However, a brand of developers such as Vipul, Unitech and
State of the Real Estate Market – National Capital Region Part I - Gurgaon Ambience Infrastructure is using parking as a USP. Developers such as JMD and Vatika have started increasing the ration of parking space to saleable area in their commercial complexes. The mandatory parking ratio or ECS (Equivalent Car Space – 1ECS for 100 Sq. Mtr.) is 1.2ECS for Residential and 2ECS for Public Use. Developers are now realizing the importance of adequate parking and demanding sanctions for a third basement dedicated to parking which does not add up to the FAR (Floor Area Ratio). HUDA has identified parking lots for dedicated multi level parking to be developed by private developers. These are expected to ease the pressure on parking. Also clusters of retail development have been found to be a solution to concentrated demand for parking space. An example of this is the Sahara Mall end on MG Road where the development of more malls actually resulted in reduction of traffic jams as users started parking in multiple malls and walking from one to the other. Social Infrastructure In residential areas, social infrastructure includes schools, hospitals, transit corridors and shopping and recreational facilities. In offices the social infrastructure includes rings of residential and retail developments. Hotels and medical facilities are a bonus. In retail areas, access to either large volumes of residential and office hubs or accessibility to a large volume of high-spending affluent shoppers is the key. While currently these indicators have not started directly affecting property values, or are doing so only to some extent, MB research anticipates significant fluctuations to be witnessed on these parameters in the short to medium term.
State of the Real Estate Market – National Capital Region
Part I - Gurgaon
THE GURGAON MARKET
RESIDENTIAL
There are three types of residential apartments available in Gurgaon; Group Housing
Societies; Condominiums built by developers and Single Floor built on Independent
Plots.
Group Housing Societies: These are built on land allotted by the development
authority to registered group housing societies. These are clustered in 3 pockets across
Gurgaon Sector 15and 17, 21-23, 32, 43-47 and 53–57.
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June, 2007
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- 23State of the Real Estate Market – National Capital Region
Part I - Gurgaon
Condominiums: These are clustered in developer promoted sectors such as DLF
Phases 1 – 5, Sushant Lok I, II, III, Palam Vihar, South City I, Nirvana Complex, Sohna
Road and Golf Course Road.
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June, 2007
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DState of the Real Estate Market – National Capital Region
Part I - Gurgaon
Single Floors: These are developed across plotted areas developed by HUDA or
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demand for these properties on a rental basis. DLF Phase I – V, Sushant Lok I-III, Palam
Vihar, South City I & II, Nirvana, Mayfield Gardens and Ardee City, Huda Sector 3 – 9,
14, 15 & 17, 21 – 23, 38-40, 45, 47 and Sohna Road
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June, 2007
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COMMERCIAL
The commercial market can be broadly divided into office and retail developments.
Office
The Gurgaon office market is probably the most evolved in the country with at least 48
customised office complexes developed by private developers and over 100 more in the
old industrial sectors. Leading this trend is the DLF group, which has created over 13
office complexes covering at least 12 million Sq Ft. Close on its heels is the Unitech
group with 8 office complexes. Other groups developing office complexes in the
Gurgaon region include Ansal-API, Vipul, Vatika, Alpha G-Corp, Bestech, BPTP and
Emaar-MGF.
Gurgaon scores over all other suburbs in terms of the size and quality of office property
developments. The large floor plates, IT-ready buildings with sufficient power back-up
and other infrastructural facilities have resulted in a record number of corporate offices
shifting to the city. The recent demolition drive in the NCT of Delhi against unauthorized
office spaces has also resulted in a quantum jump in the number of offices in the city.State of the Real Estate Market – National Capital Region Part I - Gurgaon Retail As a premium suburb, Gurgaon also scores in retail space. It has at least 30 retail malls and premium shopping complexes spread across HUDA sectors and private developments. This is in addition to the over 100 neighbourhood markets across the old and new parts of the city.
State of the Real Estate Market – National Capital Region Part I - Gurgaon ECONOMIC DRIVERS Gurgaon has witnessed a lot of development during the last two decades. Many of these can be attributed to various developments that happened in and around Gurgaon. These are IT and ITES services, Retail explosion, Negative sentiment in Delhi because of the sealing drive, focus on hospitality and availability of good population demographics. IT and ITES Till the mid-90s, Delhi remained a preferred option for business units as it proved to be a single location city, with office concentration in the Central Business District of Connaught Place and a few low-end secondary business districts such as Nehru Place, Bhikaji Cama Place and Rajendra Place. However, with the opening up of the economy in 1991 and the rapid growth of a diverse range of multinational offices in India, the demand shifted from prime, expensive, poorly managed CBD space to relatively affordable, premium quality large floor unit spaces in the suburbs. This was further augmented by the rapid growth of the IT industry first in the form of the Dot-Com boom in the late 1990s and then the Business Process Outsourcing (BPO) of the the early 2000s. During the past five years, the scenario has changed dramatically with corporate houses from Delhi’s Connaught Place and other areas are moving to suburban locations like Gurgaon. This movement has been largely driven by the IT and the ITES companies. The recent sealing drive by the Municipal Corporation of Delhi against unregistered retail and office space has resulted in this demand surging even among non-IT companies. A large chunk of these companies have moved to suburban locations as the cost factor has taken a greater importance, especially over the last few years, when the global economy saw a downturn. Many corporate houses, to optimize operational costs, moved from Delhi to Gurgaon. On an average the costs of business units in Gurgaon are 30- 50% cheaper as compared to Delhi. Developers in Gurgaon are offering good quality buildings, large floors spaces, 100 per cent power back-up and air conditioning at lower rental values. A premium large-unit size office space in Gurgaon is available for upto Rs 130-150/ Sq Ft in Gurgaon while in the CBD poorly managed space is now commanding rental values of upto Rs 350-400/ Sq Ft. Gurgaon, being a new development, offers a wider variety of choices of real estate and hence the companies can customize to suit their requirements. A combination of all factors has made locating and re-location to suburbs an optimum choice for such corporate. So, what are the specific real estate and infrastructure requirements of an IT or an ITES company? Typically, such a company requires a building with large floor plates, reasonably good floor-to-ceiling height (at least about 3.75 mts), good column grids (at least about 11m x 11m).
State of the Real Estate Market – National Capital Region Part I - Gurgaon Secondly, since they operate on a 24 hours shift basis, building maintenance becomes the key here. Typically they look at 100% power back-up and air-conditioning to be made available 24x7x365. According to Sandeep Singh, Business Head, Total Project Management (TPM), “A breakdown of 15 minutes translates to losses of a few million dollars. So the building’s engineering side has to be very efficient so far as the back-ups are concerned.” Thirdly, since they operate on lesser operating margins, they look at efficient floor space and minimum real estate & operational costs. The minimum space per person is 75 Sq Ft per person. Ideally the space should be as rectangular (never oval or circular) as possible to enhance the space efficiency. Fourth, a good, affordable residential support in the neighbourhood and a social infrastructure is an essential component. Most of the employees in a call centre are young boys and girls from various cities and they invariably like to be closer to their office, especially given their untimely working hours. Fifth, even though majority of BPOs/ call centres provide transport facilities to their employees, they also prefer to have public conveyance, which would ease their burden a little. With relocations happening from the CBD of Delhi to Gurgaon, the residential sector got a boost as the additional workforce need accommodation. Executives working in BPO and ITES sectors look for modern houses coupled with facilities like security, clubs, swimming pool and gardens. These people have changed the concept of living in built- up house to independent units/apartments. Also, because of the outsourcing of high-end jobs to India, Non-Resident Indians (NRI) are coming back to the country. This spurred the demand for international quality real estate space. Retail Organized retailing has become a key driver for real estate development in the city. The growth in organized retailing has not only driven the construction of malls but such construction has also acted as a catalyst for other real estate development in that area. Where there is such a development, the surrounding areas witness an increase in the property prices. A classic example is the MG Road where the mushrooming of a large number of retail malls has led to the ballooning of value of property along this route. Malls in Gurgaon have the capacity to draw in at least a third of the Delhi shoppers, besides many from adjoining rural hinterland in the states of Haryana, Rajasthan and even Punjab. Gurgaon's proximity to Indira Gandhi International airport makes it the ideal destination for tourists as well. Gurgaon now is fast progressing beyond simply providing air-conditioned space for shoppers to make their purchases in. Speciality malls have now become destination points for shopping during specific occasions such as wedding and festivals. Developers are coming up with specialized malls that cater to customers that visit these malls for a specific product. These malls provide a cluster of shops that sell products that compliment each other. This includes the Gold Souk in Sushant Lok I, and the Wedding Mall on Sohna Road, developed by Omaxe Developers. While the former offers customized gold retail from a host of jewelers from around the country and abroad, the
State of the Real Estate Market – National Capital Region Part I - Gurgaon latter offers the visitors a range of products and services that are needed while arranging a wedding. A major problem that malls face is that of parking. On an average each mall in Gurgaon, during weekend draws about 2750 to 3000 cars and about 750-800 two wheelers. In comparison, the combined parking capacity of the operational malls stands around 600 to 800 cars and 450 to 500 two-wheelers. Bearing in mind that shoppers spend about four hours within a mall, the number of cars at a time ranges from 1,000 to 1,500. The HUDA plans to augment these services with specialized multi-level parking lots. Hotel space This clustering of retail options in an area accessible easily from the airport has resulted in a large number of developers investing in the creation of hotel space in the city ahead of the Commonwealth Games in 2010. This availability of premium hotel space will also act as a further boost to growth of organized retail in the city. Good demographic profile One of the principle reasons for Gurgaon becoming the preferred choice for mall development in the NCR is the demographic profile. In addition to the local affluent populace, there is a large floating population with which already travels to the city for work. It is therefore natural that they will travel to the city for weekend shopping as well. This includes large numbers of buyers from affluent South Delhi colonies where the number of malls currently available are limited. Negative Sentiment in Delhi After the MCD drive in Delhi to close shops and offices built illegally in residential neighborhoods, retail and commercial options have become further curtailed. Delhi Vs Gurgaon The suburbs including Gurgaon have developed rapidly because Delhi, which has old road plans, bad traffic situation and high real estate cost, was not a feasible option to meet the urgent demand. Development in Gurgaon became an alternative due to the pace at which the demand for both, commercial and residential property was met. Gurgaon has grown as Delhi’s twin city as it offers something for everybody with high-end villas to apartment complexes for both high-end and budget buyers. Gurgaon also has an upper hand where cost is a concern. The rates in Gurgaon may be touching skies at the moment but still they are around one fifth to that in Delhi’s posh colonies. For instance, in South Delhi, on an average, the rate is around Rs1 Crore for a 1600 Sq Ft house. Even at such a high prices the flats do not usually sport good interiors, well designed bathrooms and kitchens. Also outside the house, there is a fight for parking area. Security is usually an area of concern. If one spends the same amount in Gurgaon, he can buy an apartment for about 3,000 Sq Ft. Also additional packages such as good ambience, proper water and electricity supply back-ups, sufficient parking area and a well maintained park can be expected.
State of the Real Estate Market – National Capital Region Part I - Gurgaon Another reason that is attracting investors to Gurgaon is the fact that since the property is new and purchased directly from the developer, purchases are made through cheques. This is beneficial for young buyers/investors, who opt for a loan when they consider buying a house. In contrast most deals in Delhi, which are in the secondary market, are in cash for which bank finances are not available. Infrastructure woes However, infrastructure still remains a problem. Companies are ensuring that they get the best internal infrastructure within their buildings. But on a macro level, infrastructure requirements like transportation, roads, electricity, etc. affect these companies. An infrastructure requirement, particularly public transport, needs to be augmented. There is also the need to improve basic utilities such as power. However, the rising real estate cost and availability of space is causing alarming situations for BPO company, which is making them think of other suburbs of NCR as well as other cities in the long term. Of late, there have been examples of companies located in Gurgaon who have actively started looking at Noida as an option. Companies such as Oracle, Hewitt etc. have already taken up space in Noida. Noida has been emerging as an alternate destination for IT/ITES companies because of its proximity to Delhi and more realistic suburban prices. The reason for this trend is the rising real estate cost. Today the rental rates are hovering around Rs 70 to Rs 85/Sq Ft/ month in builder sectors, while it is Rs 40 to Rs 45/ Sq Ft/ month in Udyog Vihar, which is perhaps not at all viable for a BPO set up.
State of the Real Estate Market – National Capital Region Part I - Gurgaon INFRASTRUCTURAL DRIVERS Gurgaon has gained the position of a preferred location for office space and retail ventures. Being closest to Delhi and to the international airport, Gurgaon is the preferred area where large facilities can be set up. However, this clustering of a large number of corporate offices, industrial facilities and back-office operations in the city has led to an unprecedented scale of development. While global quality real estate has been setting the standards for on-site infrastructure, off-site infrastructure had for long been neglected. This combined with the large floating population in the city has resulted in glaring shortfalls in transport, power and other utility services. Given the critical corporate office availability situation in Delhi because of Supreme Court driven sealing by the Municipal Corporation of Delhi of unauthorized commercial facilities, any space available in Gurgaon for the next year or so has already been taken up. Any cluster of development by private developers largely revolves around existing or future transit links. The partial completion of the Expressway project on National Highway 8 was the first such trigger. This resulted in erstwhile unwanted areas such as the Sohna Road to witness frenzied land deals and hectic construction schedules. The sanction of the Delhi Metro line from Gurgaon to Central Delhi through South Delhi has also resulted in several offices shifting base to the suburban city. The power situation, however, is presently a cause for concern. While the HUDA authorities are making efforts to augment the supply with a new facility in Jhajjar, there are no short-term solutions in sight. Currently, developers are taking matters into their own hands and either providing large DG sets to provide back-up or total power or relying on the surplus from industrial supply to channel to residential areas and townships. Water problems in parts of Gurgaon have been addressed but more needs to be done. An action plan to tackle the problem of incomplete sewerage systems has been drawn up but still needs to be executed. Transportation According to a survey conducted by RITES in 2005, Gurgaon witnesses a total of 11 Lakh vehicular trips, out of which 3 Lakh are intra-city each day. The daily total number of trips from Gurgaon to Delhi and back are 2.8 Lakh and 2.98 Lakh respectively. RITES projects that the state vehicular trips within, as well as to and from Gurgaon, will increase to 39 Lakh by 2021. Of these, 15 Lakh will be intra-city and 23 Lakh inter-city. The Delhi–Gurgaon section of highway carries more than 150,000 passenger car units a day and this is likely to increase by over 7% per annum. Gurgaon is connected to Delhi via the National Highway No. 8 (NH8), Mehrauli-Gurgaon Road (MG Road) and Delhi-Kapashera Road. The MG Road and NH 8 remain the lifeline for the city, whereas, the Kapashera Entry point connects Delhi to Old Gurgaon.
State of the Real Estate Market – National Capital Region Part I - Gurgaon To improve transportation HUDA has proposed widening of vital link roads and also new Arterial routes will be drawn. HUDA has proposed the following new road links between Delhi and Gurgaon: 1. 90 meter wide road link between Vasant Kunj in Delhi to Mehrauli road in Gurgaon. 2. 90 meter wide road link from Andheria Mor in Delhi to Gurgaon – Faridabad road in Gurgaon. 3. 150 meter wide road link between Dwarka residential complexes of Delhi to Palam Vihar of Gurgaon. HUDA has also proposed the following to smoothen flow of traffic in the city: 1. For smooth flow of inter-city traffic and intra-city traffic of Gurgaon, a 150 meter wide northern peripheral road and a 90 meter wide southern peripheral road has been proposed. 2. For all new areas, the widths of all sector dividing roads have been kept as 75 meter and 60 meter. Other Initiatives: 1. Authorities have also developed an Auto Market in Sector 10 in an area of 16 hectares. 2. A Transport Nagar has also been developed by HUDA in an area of 28 hectares in Sector 33. 3. An additional “Mass Rapid Transit System Corridor” along the 150 meter northern link to Delhi extending from Dwarka has been proposed in the MPD 2021, extending upto Inter State Bus Terminal proposed near Kherki Daula. 4. Another “Mass Rapid Transit System Corridor” has been proposed along the Mehrauli road, 60 meters road of sector 28–29, the same is proposed to be extended upto the 90- meter link road (Andheria Mor to Gurgaon–Faridabad road) and then further along the said 90-meter link road upto Inter-State bus Terminal. 5. The HUDA is also recarpeting all the master roads which have been constructed before 1995. 6. The HUDA has also taken up the task of widening the Gurgaon-Mehrauli road from four lanes to eight lanes. Gurgaon is severely hit as far as public transport is concerned. All the public transport buses of Haryana Roadways originate from and terminate at the Bus Stand, which is located in the Old City. Buses do not service large parts of the newly developed millennium city. City cabs and auto-rickshaws have to pay taxes across borders despite the fact that there is a huge floating population traveling from and to Delhi from Gurgaon. As a part of the government initiative to improve public transport, the Haryana Government is expected to start a comprehensive CNG bus service between Gurgaon and Delhi by July end, 2007. Initially 20 CNG buses will be put into service between Gurgaon and Delhi. Seven CNG outlets have also been proposed to service this CNG bus fleet. Haryana Roadways has also planned ten low flooring CNG air-conditioned bus services in HUDA Sectors on different routes. For this HUDA authorities have allocatted Rs 3 Crore.
State of the Real Estate Market – National Capital Region Part I - Gurgaon By 2010, Gurgaon will have a 15 km elevated line, which would have eight stations. The stations would be Chhattarpur, Ghitorni, Arjan Garh (last station in Delhi), Garden Estate, Sikandarpur, DT City Centre, IIFCO Chowk and Sushant Lok. HUDA has also proposed an extension of the Metro track from the Sushant Lok till the IMT Manesar area via residential areas such as Sushant lok III and South City II, where there is almost no public transport available currently. Also the extension of Dwarka line to IMT Manesar area has been proposed. Water and Electricity Another problem is that of water supply and sewerage systems. While at the time of development there had been land enough to connect the existing systems with newly laid ones, enforcement was weak and encroachments ensured that what should have been just a few kilometers long had to be taken around illegally constructed colonies. Both the time delay and the longer pipelines resulted in cost overruns. In an effort to ensure proper supply of water HUDA has come up with certain measures such as setting up of control rooms which will work 24 hours and will tackle complaints relating to water and sewage. Currently HUDA has about 100 cusec of drinking water through canal-based scheme at Basai Water Treatment Plant; the authorities have now planned to enhance it to 180 cusecs. This would be sufficient to service the needs of the city as the current requirement stands at about 160 cusecs. HUDA is also taking steps to check the leakages and misuse of drinking water. HUDA has also set up a committee to monitor whether the rainwater harvesting systems installed by colonies and institutions are functioning. At present, two water treatment plants of 20 MGD capacity are functional in Gurgaon. Keeping in view the future requirement, the third sewage treatment plant has also been recently constructed near village Dhanwapur with capacity of 68 MLD (million liters per day). Gurgaon is worse hit by electricity shortages than any other suburb in the NCR. According to the Superintending Engineer, DHBVN, there is a demand of 1 crore units per day, while the supply is 80 lakh units per day. The Haryana power department has anticipated a shortfall of roughly 20-30 lakh units per day during June and July. According to the officials of DHBVN, there is a shortfall of 20 lakh units per day in Gurgaon as the demand is quite high. Residents end up paying heavily for generators and invertors as power cuts for as long as 6 hours is a usual in the city. Some developers have taken the onus on themselves and have started producing there own electricity where per unit charge is higher than that charged by government. A 100% power back-up is now considered a normal feature in the developer establishment. Its not only the residents that are hit by erratic power supply. Corporate houses spend hefty amounts to ensure that operations in swank new offices run uninterrupted. For instance, Ranbaxy moved to a cutom-built 115,000 Sq Ftbuilding in Gurgaon from a rented office in New Delhi. Since then (March 2005), power costs have surged and monthly spending on backup power has jumped sevenfold to Rs 11 Lakh. Similarly, Genpact, which employs more than 6,000 people at two Gurgaon contact centers, spends Rs 10 Lakh per month on power.
State of the Real Estate Market – National Capital Region Part I - Gurgaon Haryana’s power requirement has been projected at 766 lakh units against availability of roughly 730 lakh units in May. During the month of August the demand shoots up by 21% and reaches 930 lakh units whereas, the supply is boosted by just 12% and reaches only 821 lakh units. During the months of April – August, the demand shoots up by 8% in many cities but in Gurgaon the demand is up by more than 12%. This is largely the result of premium office, retail and residential lifestyles in the city. Recently, the Dakshin Haryana Bijli Vitran Nigam (DHBVN) has made it mandatory for the new domestic and commercial connections to use energy saving lamps. According to DHBVN, if each of the 18 lakh consumers replace one conventional bulb with CFL, it would result in saving of roughly 300 MWs of power. The Haryana Government is planning to enforce a policy where it is asking property developers, including HUDA, to provide the land required for setting up power sub- stations in the state. Developers will be asked to earmark and transfer the land required for setting up power substations. Some developers have already allocated space to accommodate these. Additionally, to manage the space crunch, the authorities are planning to construct gas-insulated substations in the state, which require less space as compared to conventional stations. HUDA’s Role in Gurgaon’s development In spite of all the infrastructural backlogs the HUDA hasn’t failed totally. The issues are still at a stage that they can be addressed. HUDA has earmarked Rs 776 Crore for its three years External Development Plan. HUDA has allocated money for services like water supply, roads, society welfare development, sewerage, building, street lights, horticulture and fire fighting. The pain areas for HUDA remains water supply and roads but a significant amount has been earmarked for services like society welfare development, horticulture, building and sewerage. Though nominal, but services like street lights and fire fighting have also been taken into consideration. It would be interesting to note that HUDA has set aside more money for services like horticulture rather than sewerage which is a major issue in metros like Mumbai and Delhi.
State of the Real Estate Market – National Capital Region
Part I - Gurgaon
Total Service Wise Composition of Rs. 776 Crore in 2007-09
Horticulture Fire Fighting
Street lights 7% 1% Roads
1%
13%
Buildings
6%
SWD
13%
Sewerage
6%
Water Supply
53%
HUDA’s desperation of improving the water supply in the city can be gauged from the
fact that it will be spending about Rs 400 Crore or 53% of the total amount on
development of water supply. HUDA would be pumping in more money each year to
improve the situation from Rs 36.20 Crore upto 2007, Rs 50 Crore in 2007-08 and a
whooping Rs 271 Crore in 2008-09.
Even though HUDA plans to spend only Rs 100 Crore or 13% of the total amount on
development of roads, it is on the top priority of the authorities as Rs 60 Crore would be
spent upto 2007, Rs 21 Crore in 2007-08 and a mere Rs18 Crore in 2008-09. The
amount earmarked for roads is diminishing as laying of roads is an one time expenditure
and once incurred it only need to be maintained, which involves lesser cost.
Chat with Mr SP Gupta, Ex-Administrator, HUDA, Gurgaon.
With the new masterplan under its belt, the Haryana Urban Development Authority
(HUDA) promises to bring about uniform development in Gurgaon catering to all
segments of the society. Administrator S.P Gupta tells about HUDA’s development plans
for Gurgaon.
Q1) What, in your perspective, is the most salient feature of the new masterplan
for Gurgaon (2021)?
A. The revised new masterplan, which be ready by the end of this month, contrary to the
prior masterplans is much more flexible and people-oriented. It emphasizes on public-
private partnership. Earlier, for instance, commercial development within the sectors was
held to be the government’s domain. But we do not have funds enough for that.
According to the new masterplan, in each of the sectors, 50 per cent of the commercial
development will be assigned to private developers on first-come-first-serve basis. Any
private developer who has purchased land can apply for the change of land use and
construct commercial development. HUDA will start acquiring the land for the 50 perState of the Real Estate Market – National Capital Region Part I - Gurgaon cent development that we have to undertake, once the plan gets finalized. This partnership would ensure large-scale commercial activity. Q2) How does this masterplan intend catering to all segments of the society? A. To include all segments of the society, within one sector, we would be providing options for all - commercial, residential (high-middle-low-EWS), public conveniences etc. For this, HUDA would be selling plots for residential development and auctioning for commercial spaces. Q3) How do you plan to upgrade your utilities to international standards? A. We will be resorting to advertising for this purpose. We would also be improving city’s infrastructure by providing dustbins, guide maps, signage, public toilets and mobile/catering vans in each market. Q4) Presently, where the encroachment rate is high, what steps are being taken to remove them? A. With the support of the Ministry for Poverty Alleviation and the beneficiaries, HUDA has proposed for a slum rehabilitation programme - “Aashiana” for upgrading the slums and EWS. HUDA will pay some amount of the funds, the ministry will support us with funds and some funds will be paid by the beneficiaries. But this land will be given on a leasehold basis. We will not convert them to freehold unless the user has been staying there for at least 15 years. We intend to create a system of inspection twice a year for this purpose. This, we hope will eliminate the prospect of those plots being sold at market values. I am also proposing a 1 lakh houses scheme where the repayments would be Rs 100 per month for families below the poverty line(BPL), Rs 1,000 per month for Economically Weaker Section Families and Rs 2,500-3,000 per month for those in the Lower Income Group category. Q5) You have recently directed that construction should be completed on plots which were allotted over 15 years ago. What has been the response? A. Regarding the vacant plots, if the construction on them does not finish within a given timeframe (thirteen plus two years), the plots will be resumed by HUDA. We have already received over 3,000 application for sanction of building plans. This will eliminate speculators. Already it has started impacting values of plots in Gurgaon. Even in our new schemes we want to eliminate speculation and want end users to purchase and stay here. For this purpose, we are keeping the prices of the plots very nominal. We have also schemes for sanction of plots wherein only one applicant can apply for one plot. Q6) Inter and intra city transportation and traffic congestion are today issues of prime concern in Gurgaon. What is being done to improve the transportation facilities? A. We will be starting the inter and intra city C.N.G bus services by February. For this we are proposing world class bus shelters as well, whose advertisements would be on air and in print from next week. Restricted use of the small transportation like autos, taxis and cycle rickshaws will be allowed where ever it is needed. The construction of the national highway would be completed by September 2007, which will considerably cut down on the traffic congestion except at the Hero Honda zone, which will be taken care off by a separate flyover.
State of the Real Estate Market – National Capital Region Part I - Gurgaon Also, the service road construction with pedestrian green belts on either side on the MG road which is in full swing will clear much of the traffic and even provide the central verge free for Metro groundwork. Particularly, in Sikanderpur, to cut down the traffic, alternate route (9A) from the MG Road to Faridabad road is being developed and will be ready in six months. Q7) What is being done to alleviate the existing water shortage, inefficient storm water drainage and sewerage system? A. There are many deficiencies in the existing water supply, storm water drainage and sewerage systems. For this we have appointed consultants who will be making suggestions and accordingly we will be making our estimate so that all deficiencies are dealt with in one go. This will be done in 2007 itself. We are also promising a uniform street light system in Gurgaon within one year time. The specific quantum of light as per the area requirement will be given to all areas through computerized systems. Q8) There is immense power shortage in Gurgaon. What do you have to say about this? A. A power plant from Jhajjar has also been signed by the Haryana State Electricity Board (HSEB). Q9) How well is Gurgaon prepared to for welcoming the Metro? A. The service road construction on the MG road is in full swing will provide the central lane free for Metro groundwork. We will also be acquiring 3-4 sites for parking on MG road on emergency basis. Further, to avoid any inconvenience due to power shortage in the construction of Metro sub-stations (440, 220 and 66) will be installed at some sites such as MG road sector 57 and Sikanderpur. Q10) Any hopes of extending the Metro from Dwarka to Gurgaon? A. The Haryana Government wants it, but it entirely depends on the Delhi Government. Q11) What all development work is being carried out at Gurgaon in anticipation of the Common Wealth Games? A. With the latest meeting with the Central Government, it was known that there is a requirement of 1, 33,000 rooms. But with barely 10,000 rooms at our disposal, we are developing more hotel sites. For this, almost every month, we are auctioning one hotel site to the private developers. Q12) Gurgaon has an edge over other N.C.R areas because of its proximity to the domestic and national airports. How do you propose to improve the existing links? A. The new masterplans’s highlight is the improved connectivity for Gurgaon by providing three new road linkages which have been sanctioned: - a link between Palam Vihar and Dwarka (it would be the biggest road of 210 meters with 150 meter of road and 60 meter of green belt on either side). - a link between Nelson Mandela Road and DLF ( MG road). - a link between Andheria Mor and Gurgaon Faridabad road. This will ease the traffic to a great extent and also efforts are being undertaken to develop the Old Delhi-Maruti road as one of the best industrial roads.
State of the Real Estate Market – National Capital Region Part I - Gurgaon Q13) Gurgaon, having become the commercial hub, what has been the significance in terms of excise revenues? A. With the increasing number of retail outlets, there has been a significant increase in the excise and tax revenues. Even the huge software exports contribute to this. The impact can be assessed by the fact that a commercial site was auctioned for Rs 1,400 crore, over 4 times the revised reserve price. This is why we are able to plough all this revenue back into improving the city. Q14) What is the impact of SEZ on Gurgaon? A. This has definitely led to the boost in production in every sector and given rise to township and employment to a large number of people. Q15) How about enhancing the rail connectivity to and within Gurgaon? A. The Railway Authority will be introducing new express trains to Gurgaon to be inter- connected to Metro. Besides, chances of having cargo hubs in SEZ are also there. Q16 How do you plan to revive the old water-bodies and hillocks of Gurgaon which can well serve today as recreational centers for the people? A. We have applied to the Defence Ministry for developing a big vocational center near the old Golf Course (HUDA) in 10,000 square yard area along with a Leisure Valley Park. Besides, in sector 52, we will be having water-bodies along with a botanical garden. We also intend to rename our roads, streets and round-ups on the names of the national leaders .
State of the Real Estate Market – National Capital Region Part I - Gurgaon ECONOMIC INDICATORS Gurgaon a part of the National Capital Region, is one of Delhi's four major satellite cities. This southern-most district of Haryana, is bounded by Rohtak and Delhi on its north, Faridabad on its east, Rewari and the State of Rajasthan on its west and it shares boundaries with the states of Uttar Pradesh and Rajasthan on its south. The present Gurgaon district comprising nine blocks Tauru, Nuh, Pataudi, Nagina, Punhana, F.P.Jhirka, Sohna, Gurgaon & Farrukhnagar was created on 15 August, 1979. Located at 28.47° N 77.03° E, Gurgaon has an average elevation of 220 metres (721 feet). As of 2001 India census, Gurgaon had a population of 173,542. Males constitute 54% of the population and females 46%. Gurgaon has an average literacy rate of 77%, higher than the national average of 59.5%: male literacy is 81%, and female literacy is 73%. The Haryana State Government is giving utmost priority to the IT Sector and Information Technology Enabled Services (ITES) and is laying due stress on promoting IT in all Government Offices so as to improve efficiency, transparency and the public services delivery. For making the economy of the State IT driven and for ushering in IT culture in the State, the Haryana Government has formulated IT Policy under which there is a provision for various special incentives for IT, ITES and Business Process Outsourcing (BPO) industries like preferential allotment of land for IT industry, relaxation in FAR, priority in time-bound loan, relaxation in pollution control, rebate in stamp duty, exemption from electricity duty for 5 years to new IT units , self-exemption from various other rules and regulations etc. The State Government has also announced policy for Technology Parks, in which considerable flexibility is being given for setting up Technology Parks and IT Corridors. Gurgaon has emerged as the preferred destination for private entrepreneurs especially in the sectors of IT, ITES and BPO companies. The export of Software from Haryana has increased from Rs. 890 Cr in 1999-2000 to Rs. 10070 Cr in 2005-06. The State economy continued to record an excellent growth during 2005-06. At current prices, the Gross State Domestic Product of Haryana has been estimated at Rs. 100675.55 Cr in 2005-06 as against Rs. 89430.64 Cr in 2004-05, recording a growth of 12.6 percent. The excellent growth of 8.1 percent in the Gross State Domestic Product in real terms during 2005-06 is mainly attributed to impressive performance of Construction, Transport, Trade, Other Services, Communication and Manufacturing Sectors. During 2006-07, the highest growth of 17.1 percent was recorded in Construction Sector followed by 14.7 percent in Transport Sector, 12.9 percent in Trade Sector, 11.7 percent in Other Services Sector, 11.2 percent in Communication Sector and 9.1 percent in Manufacturing Sector. Haryana’s new Industrial Policy of 2005 has played a prominent role in creating a global platform for industries in Haryana. Excellent law and order situation, cordial labour
State of the Real Estate Market – National Capital Region Part I - Gurgaon relations, better infrastructure facilities, simplified rules & procedures and cosmopolitan ambience has made Haryana a perfect destination for investment. Today, Haryana has 1290 large and medium units and about 80000 small scale units. The exports from Haryana during the year 2005-2006 has crossed Rs. 25000 Cr. The State has received 72 proposals for setting up Special Economic Zones (SEZs) with an investment of more than Rs.175000 Cr and employment potential for more than 20 lakh persons. 49 proposals have been granted in principle formal approval by Government of India. During the year 2006-2007 (upto December,2006), 65 SEZ proposals were received with an investment of Rs. 166238 Cr and employment potential for 1600000 persons. During the year 2006-2007, a number of projects under Public-Private- Partnership mode have been initiated in the State viz. Nano-City at Raipur Rani (Panchkula) with an investment of Rs.2000 Cr, multi-product SEZ by Reliance Industries Ltd. with an investment of Rs.40000 Cr, multi-product SEZ at Gurgaon by M/s DLF Universal Limited with an investment of Rs.26000 Cr, multi product SEZ at Ambala by M/s DLF Universal Limited with an investment of Rs.1950 Cr, multi-product SEZ by M/s Unitech Haryana SEZ Ltd. at Kundli with an investment of Rs.22000 Cr. For better management of law and order situation in the State, the State Government has already established Police Wide Area Network connecting all Range Headquarters, District Headquarters, Police Stations and State Crime Record Bureau (SCRB), Madhuban. On-line Khazana System (OTIS) Registration of Property (HARIS) and Computerization of Land Record System (HALRIS) processes are going in a big way. E- Disha, a single point multi-service delivery system for Haryana is also being set up. These centres have been set up in 18 districts of the State for providing citizen centric services like driving license, registration of vehicle, registration of births and deaths, caste and residence proof and are being launched in other district as well. The State Government mobilises financial resources through State’s own tax and non- tax revenue, share in central taxes and grant-in-aid from Central Government to meet the expenditure on administration and developmental activities. The Total Revenue Receipts of Haryana Government are estimated at Rs. 13746.65 Cr in 2006-07 (Budget Estimates) as against Rs. 13853.31 Cr in 2005-06 and Rs.11149.06 Cr in 2004-05. Tax revenue (State's own taxes and share in central taxes) is estimated at Rs.10685.85 Cr in 2006-07 (B.E.). It was Rs.10279.62 Cr in 2005-06 and Rs. 8059.53 Cr in 2004-05. Tax revenue is estimated to 77.73 percent of total revenue receipts in 2006-07 (B.E.). This percentage was 74.20 in 2005-06 and 72.29 in 2004-05. Tax revenue is estimated to increase by 3.95 percent in 2006-07 (B.E.) over 2005-06. The share in central taxes is estimated at Rs.1103.55 Cr in 2006-07 (B.E.) as against Rs 1200.97 Cr in 2005-06 and Rs.619.26 Cr in 2004-05 which 100 shows that the share in central taxes is likely to be decreased by 8.11 percent in 2006-07 (B.E.) over 2005-06. The grant-in-aid from Central Government is estimated at Rs. 1079.84 Cr in 2006-07 (B.E.) as against Rs. 1115.13 Cr in 2005-06 and Rs. 545.16 Cr in 2004-05. It indicates that the grant-in-aid is likely to be decreased by 3.16 percent in 2006-07 (B.E.) over 2005-06.
State of the Real Estate Market – National Capital Region Part I - Gurgaon According to Economic Classification of the Haryana Government Budget, the total expenditure is estimated at Rs. 15978.60 Cr in 2006-07 (Budget Estimates) as compared to Rs. 14815.49 Cr in 2005-06 (Revised Estimates) showing an increase of 7.85 percent in 2006-07 (B.E.) over 2005-06 (R.E.) whereas this increase was 18.91 percent in 2005-06 (R.E.) over 2004-05 . Administrative Departments of the Government are estimated to constitute 87.82 percent expenditure in 2006-07 (B.E.) as against 87.64 percent in 2005-06 (R.E.) and 88.48 percent in 2004-05 .Departmental Commercial Undertakings of the Government are estimated to constitute 12.18 percent expenditure in 2006-07 (B.E.) as compared to 12.36 percent in 2005-06 (R.E.) and 11.52 percent in 2004-05 . The Deputy Commissioner, an officer belonging to the Indian Administrative Service, is the overall in-charge of the General Administration in the district. He is assisted by a number of officers belonging to Haryana Civil Service and other Haryana state services. The Superintendent of Police, an officer belonging to the Indian Police Service, is responsible for maintaining Law & Order and related issues in the district. He is assisted by the officers of the Haryana Police Service and other Haryana Police officials. The Deputy Conservator of Forests, an officer belonging to the Indian Forest Service, is responsible for the management of the Forests, Environment and Wild-Life in the district. He is assisted by the officers of the Haryana Forest Service and other Haryana Forest officials and Haryana Wild-Life officials. Sectoral development is looked after by the district head/officer of each development department such as PWD, Health, Education, Agriculture, Animal husbandry, etc. These officers are from various Haryana state services. On the connectivity issue, an eight lane toll expressway between Gurgaon and New Delhi, operational in May 2007 now provides non-stop connectivity to the International Airport and Dhaula Kuan in Delhi over a distance of 28 kilometers (18 miles), and includes 7 flyovers and 5 underpasses along the stretch. The Main Bus Depot of the city is the oldest and most used. It connects not just to nearby Delhi but all neighbouring towns. The buses to Delhi are the most frequent and have a choice of routes between AIIMS (via Mehrauli) and Dhaula Kuan. It also connects to Rohtak (2h15"), Jammu (12h), Faridabad (45min") to name a few. The bus service has remarkably improved after the construction of Golden Quadrilateral — a four lane highway passing through the city. Gurgaon has its railway station located at the extreme corner of the city. The rails connect to both Rewari on one side and Delhi Cantt on other. Daily commuters using the trains either come using two wheelers and buy a monthly parking ticket or use the shared auto rickshaws that do trips between the station and the main bus depot. Plans to extend the Delhi Metro to Gurgaon have now been formally approved by both Delhi and Haryana governments, both having reached a cost sharing arrangement. The work have already started in isolated pockets along the route. Hence, Delhi Metro to Gurgaon can now be expected by year 2010. The metro underground work has started at Sikandarpur, Sushant Lok, DLF in Gurgaon. The Delhi Metro is expected to reach Rajiv Chowk very soon.
State of the Real Estate Market – National Capital Region Part I - Gurgaon The city is home to a Number of reputed educational institutions - MDI, ITM (Insitute Of Technology and Management), Indian Institute of Law, The State Bank training Academy, The Fertiliser Development Institute, Potash Research Institute, The Ansal Institute Of Higher Education, Gurgaon Institute Of Dental Sciences, Dronacharya College Of Engineering, Apeejay College Of Engineering, Institute for International management and Technology (IIMT)which is in colaboration with Oxford Brookes University, UK. Gurgaon is also home to some of the very best residential and day schools like - Ryan International School, Delhi Public School, Blue Bells Model School,Colonel's Central Academy, Our Lady of Fatima Convent High School, DAV Public School, Amity International School, Shalom Hills International School, The Heritage School, Scottish High International School, Tagore International School, Suncity World School, The Sriram School, Shikshantar School etc.
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