Master plan gives new life to Gurgaon

Published: August 21, 2009

Gurgaon has emerged as one of the most modern cities of India, with state-ofthe-art commercial buildings, posh residential condominiums and large malls. It has emerged as the first choice for a large number of multinational companies opening their offices in the country. The township has benefited hugely from its proximity to India’s capital and power centre at Delhi.

In the last ten years, Gurgaon has had a number of MNCs opening their offices here. This has led to a rapid growth in real estate in the city, and today, it has emerged as a major residential, commercial and retail hub. Favorable government policies, good connectivity with Delhi, and its upcoming infrastructure has enabled Gurgaon to position itself as an industrial & IT/ITeS hub. A number of IT/ITeS companies, auto and auto ancillaries and garment export industries are operating out of this place.

The city’s proximity to the domestic and international airports, quality of real estate developments coupled with proactive government policies have helped it to grow faster than any other competing suburbs of Delhi, says Samir Jasuja of PropEquity, a real estate research firm. The commissioning of NH-8 (Delhi-Gurgaon Expressway) has further fuelled developments in Gurgaon. The Metro link, currently under construction, will further strengthen Gurgaon’s position in the NCR by providing muchneeded quality public transport connectivity. The city has also benefited from the government’s enhanced focus on a comprehensive infrastructure development plan for the 2010 Commonwealth Games in the NCR. However, Gurgaon has still a long way to go in terms of social and physical infrastructure as it faces severe power shortages and traffic bottlenecks.

Jasuja says the city is all set to witness a fresh residential supply of 97.60 million sq ft during 2009-2011, 80% of which has already been sold. However, the slowdown in economy for the last one year has affected its rate of absorption. The slowdown in absorption or sale of residential units has led to a significant price drop, in the range of 30% to 45%, for projects getting completed in 2010-2011, and 20% to 30% for projects nearing completion in 2009, Jasuja says. The completed projects are also witnessing a price drop of 10% to 15%. On the other hand, drop in prices have led to an increase in real estate activities as residential sales have picked up due to this significant price correction since the first quarter of 2009. It has also lured developers to launches residential projects in the affordable price bracket.

The slowdown has also affected commercial office market, which witnessed a drop in demand with corporates deferring expansion plans owing to changed business environment. Commercial office market witnessed corrections in terms of capital values and lease rentals. According to a report of PropEquity, the city saw a supply of 7.3 million sq ft in 2008, of which only 63% was absorbed. The gap between demand and supply is expected to widen in the current year as a lot of projects that were scheduled to be operational by 2008, have been delayed and are now likely to get completed in 2009, resulting in an increased supply at 20.9 million sq ft of commercial space in 2009.

The retail market has been affected due to a decrease in consumer spending, as a result of the ongoing slowdown. The earlier expansion plans of retailers are likely to be revised. In fact, retailers are using the slowdown as an opportunity to renegotiate existing leases at lower rentals. With high vacancy levels, developers are evaluating revenue sharing models to attract retailers. But, with the correction in prices, construction activities are picking up. The new Gurgaon-Manesar Master Plan, in fact, is fuelling a boom in developments. It has brought in fresh areas under development and given a lease of life to the city.

The city, says Jasuja, is expected to grow along the southern peripheral area where Sohna Road and Golf Course Road extension are the major growth corridors. With the local civic body - Haryana Urban Development Authority (HUDA) introducing the Gurgaon- Manesar Master Plan 2021, the availability of land for development and avenues for new growth corridors has opened up. Sector 8, 11, 12, 12A and Palam Vihar comprise the old section of Gurgaon. Sector 4, 5, 14, 15, 29, 56 and 57 are amongst the most developed HUDA sectors in Gurgaon. Areas like DLF Phase I-V, Sushant Lok I-III and Golf Course road are the prime residential areas commanding the highest real estate prices. Concentration of new development is mainly in the new sectors, Jasuja points out. Dharuhera, Sohna Road, Pataudi Road, DLF Phase V are the emerging growth corridors.

Total city-level supply by 2011, a report by PropEquity says, is 107.56 million sq ft, including a completed stock of 9.95 million sqft spread across 111 projects, comprising apartments and villas. As per the new master plan, 14,930 hectare of land has been allotted for residential use with an addition of 58 new sectors. 27 per cent of the proposed residential land is under the process of licensing.

Source: Economic Times

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