Delhi realty: Watch out for New Gurgaon, Manesar in 2013

By Santosh Kumar

Looking ahead at 2013, this is what's in store for realty sector in Delhi.

Delhi- NCR Commercial Real Estate 2013

In 2013, the areas which are likely to perform best in terms of office space absorption are:

Sohna Road: This region will continue its appeal to office space occupiers in 2013 and beyond. Having already positioned itself strongly as a de-rigueur destination for office spaces, this region will see an increased influx of companies.

No significant quality retail supply is likely to hit the market in 2013. Reuters

Rentals in Cyber City are likely to be revised upward, placing it out of the budget appetites of many IT / ITeS companies whose comfort range of rentals is generally between Rs 30-40/sq ft.

This will also result in a closer consideration of Sohna Road as an office space destination for many more corporates already based out of Cyber City. The healthy supply of affordable, ready-for-occupation residential options will ensure a sustained demand for office spaces in this region.

Noida Expressway: Good rental affordability and relatively comfortable access to East and South Delhi, Faridabad, Ghaziabad and the population of Noida will continue to work well for this region in 2013. IT / ITeS companies with rental budget concerns will increase their focus on Noida Expressway for their office space requirements. Better infrastructure than in Gurgaon and more affordable housing will provide a clear advantage.

Delhi NCR Retail Real Estate 2013

No significant quality retail supply is likely to hit the market in 2013. Though Mall of India and Gardens Galleria are scheduled for launch in the late quarters of 2013, there is every possibility that their launch will actually slip into 2014. Select City, DLF Emporia and Promenade, and Ambience Mall will continue to lead the bandwagon and exhibit the best footfalls and sales figure in 2013.

Most of the malls in Noida, East and North Delhi and to some extent West Delhi will continue to languish under high vacancy, though the vacancy levels may reduce from current levels due to the lack of new supply.

Delhi NCR Residential Real Estate 2013

In 2013, the outlook remains promising for Dwarka Expressway because of its infrastructure advantages and the locational benefits it enjoys. Dwarka Expressway has been able to successfully withstand the heat that many other areas and pockets of NCR have faced. The price sustainability and appreciation trends of the recent past, and also its relative affordability, will continue to maintain investor interest and confidence.

Other important areas to watch out for in 2013 for residential realty will be New Gurgaon and Manesar. The increase in commercial developments, its developing infrastructure, continuing affordability and the proposed connectivity via Metro and the Expressway will put this region on radar in 2013.

Noida Extension and Noida Expressway will continue to generate interest. More and more IT / ITeS companies target Noida Expressway for its rental affordability when weighed against the upward rental trends that Cyber City in Gurgaon will display. The Noida Expressway will further increase its appeal as a residential hub. The comparatively better infrastructure, easy accessibility and availability of affordable options will appeal to both investors and end users. Supply in this region will not be an issue, and good levels of absorption with appreciation in capital values are a high possibility in 2013.

Tips To Real Estate Investors And End Users For 2013

The RBI has instructed scheduled banks to not allow a rollover of loans given to real estate developers into next financial year. This will mean that developers will see an urgency to dispose of their unsold inventory in order to be able to raise funds to pay back their loans. This holds the potential for a major correction in residential prices in the NCR region.

Moreover, the RBI has already given a cue of likely rate cuts in future monetary policy review. This will help in easing the liquidity situation. It is highly advisable for prospective buyers not to hurry their purchase decisions, but to wait and watch how the situation unfolds by the end of first quarter of 2013.

The author is CEO, Operations, Jones Lang LaSalle India