Rise of Suburbia

[JamesPaul00]

Notwithstanding the overheated property market and India Real Estate which witnessed over 100 percent escalation in prices, Delhi and suburbia continue to rock as a hot destination for real estate investment.The year 2004 was a good year for the property market in Delhi and suburbia. Residential property prices had a dream run and went up by 60-120 percent in the last two years. An interesting feature in the entire real estate boom in Delhi and suburbia is that price appreciation has been mainly led by premium residential developments. The rise of suburbia is the story in Delhi-NCR where suburban towns of Gurgaon and Noida offer superior and a large variety of premium housing in the form of condominiums, independent villas and penthouses. And these high-end homes have been the main driver of realty in Delhi and suburbia.

The national capital has been losing steadily to its suburban counterparts in office market share primarily due to poor quality of buildings and high real estate cost in the CBD. On the other hand, offtake in the NCR market was to the tune of 3 msf in 2004 fuelled by IT companies in Noida and Gurgaon.The retail sector has witnessed high leasing activity in 2004 sustained by new mall developments in Delhi and NCR towns of Gurgaon, Noida, Faridabad, Ghaziabad and Indirapuram. Approximately, 15.4 msf of supply is coming into the market over the next Year. Gurgaon alone is adding around 4 msf by the end of 2006.

There are bright prospects of realty in Delhi and suburbia in the coming months. The residential property is going to witness increase in prices on the strength of high-end housing. IT/ITES and BPO companies will continue to fuel growth in office leasing with their expansion plans. Even the rentals in CBD are expected to go up with Delhi Metro becoming operational in that area this year. Demand for the retail sector is also expected to remain strong with as many as 100 mall projects proposed in the NCR, creating 20 msf of retail space in the next two years.