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  • 1. VIJYA RESEARCH AND ADVISORY aa ‘GURGAON CALLING’ Gurgaon Real Estate as Investment Destination 2011  Gurgaon Growth Story  Infrastructure  Corporate presence  Best residential properties  Top Developers  Legal issues  Financing
  • 2. Gurgaon in Ten Years – Investment and DevelopmentGurgaon…the millennium cityGurgaon, one of the most happening cities have clearly preferred Gurgaon over Delhi toof North India, is a classic example of set up their offices with availability ofurbanization fuelled by industrial and modern office space, superior infrastructureeconomic development. From a village on and proximity to Southern Delhi, Gurgaonoutskirts of national capital, with has also become a natural choice for peoplepopulation of 8.7 lakh in 2001, Gurgaon has looking to move their residences with thetransformed in to a bustling city of heavy city offering ample job opportunities. Thecorporate activity, will all the nerves now city is now lured as the ultimate destinationshifting from Delhi to Gurgaon. As MNCs by one and all.Area(Gurgaon district) 1,253 (Gurgaon city) 738 sq. kmLiteracy rate (2011) 84.4%Population (2001) 870,664Population (2011) 1,514,085 Rural 472,085 Urban 1,042,000Population Growth (2001- 73.9%2010) Rural -15.8% Urban 236.5%Growth of urban population 44.3%– HaryanaMunicipal Wards 35
  • 3. Urbanization in Gurgaon...How a average, daily 2 lakh passenger carsvillage turned into 21st century commute through this road to reachMetropolitan their office places. Indeed, a large part of these daily commuters also weave the In 2001, only 35.6% of the Gurgaon dream of owning their residences in the district was urbanized. Rapid growth in city. last ten years has increased  Gurgaon was the place to bring urbanization level to 69%. While growth shopping mall culture to the national in Delhi’s population has slowed down capital territory. One of the first set of between 2001 and 2010, population of malls in NCR region was developed in NCR cities like Gurgaon has jumped Gurgaon. heavily.  Gurgaon, the residence of elite and Gurgaon, at present, accounts for 6% of upper middle class, houses the best of the total population of Haryana state. entertainment places, clubs, bars and Haryana is 16th largest state in India lounges. and fourth largest state in North India in terms of population size. Gurgaon economy…growing stronger Last 5 years have seen considerable and larger! migration from Delhi to Gurgaon, lured  Gurgaon today is a vibrant by the charm of modern living, and commercial centre, large modern facilities matched up to manufacturing hub in north India international standards. Key attraction and base for corporate activity. point for Gurgaon was building of Delhi  Gurgaon district has been growing international airport which is only 16 at average 16 % in GDP terms kilometer away from mainland during last ten years. Gurgaon.  Another striking feature of Gurgaon Given its strategic location, economy is equal presence of infrastructure facilities and optimum services and manufacturing share. property prices, the city soon turned out Gurgaon is also the hub for be the work place of the Fortune 500 manufacturing companies, companies and became IT hub of North especially, auto parts, garments, India. rubber, plastic. Next turning point came in history of  Leading job portals show far higher Gurgaon was building of toll road job creation in Gurgaon as covering 24 kilometers with capital city compared to other NCR cities like in matter of mere 20 minutes. On an Noida and Faridabad.
  • 4. Gurgaon GDP size (at market prices) 3,000,000 2,500,000 Rs. lakh 2,000,000 1,500,000 1,000,000 500,000 0Gross domestic product (GDP) reflects the value of economic activities in the given territory.Amongst the four NCR cities- Gurgaon, Faridabad (Haryana); Noida, Ghaziabad (Uttar Pradesh)Gurgaon has maximum GDP and also highest growing GDP. In Gurgaon, GDP has registered12% growth in past 5 years which is far higher than other NCR cities. Higher GDP growthreflects rapidly rising economic and commercial activity in the city which makes it even morelucrative investment destination. ve GDP of Gurgaon and NCR cities 14% 1,600,000 12% 1,400,000 1,200,000 10% 1,000,000 8% 800,000 GDP 6% 600,000 4% Average 400,000 Growth 2% 200,000 0% - Gurgaon Faridabad Noida Gaziabad
  • 5. Industrial Development in Gurgaon as an Auto Hub by the Centre and the state government.Gurgaon has unique advantage of havingindustries closely located. Out of 34 SEZs Table below highlights top companiesbeing awarded to Haryana, 30 are located operating from Gurgaon. With Gurgaonin Gurgaon. Tall office buildings in Gurgaon gaining importance as corporate centreare base of multinationals and large Indian with more and more companies openingcompanies across various sectors. IT, ITes their office in the city, this will further pushamongst the service sector and auto in up the demand for residential property, thusmanufacturing sector have maximum promising good returns on investment inpresence in Gurgaon. Gurgaon-Manesar- residential property.Bawal region of Haryana has been identifiedSector CompaniesIT/ITES TCS, HCL, Aricent Technologies Holding Ltd, Convergys India Services Pvt Ltd, Evalueserve, IBM Global Process Services, Microsoft Corporation India Pvt Ltd, NIIT Ltd, Oracle India Pvt Ltd, Sapient Corporation, GenpactAuto Bajaj Motors, General Motors India Pvt Ltd , Honda Motorcycle and Scooter India Pvt LtdAuto Ancilliary Apollo Tyres, DELPHI Automotive System, Minda Industies Ltd, Niko Auto Ltd , Rico Auto IndustriesBanking Standard Chartered Bank, HSBC, American Express Banking CorporationTelecom Aircel, Airtel, Alcatel Lucent, Ericsson India , Micromax Informatics, ZTE Telecom India Pvt LtdConsumer Durables Videocon, Philips Electronics India Ltd, Samsung India Electronics Ltd, Whirpool India LtdConsumer goods Bata India Ltd, Coca Cola India Pvt Ltd, GlaxoSmithkline Consumer Healthcare, Reebok, RJ Corp (Pizza Hut)FMCG Nestle India Ltd, Pepsi Foods Pvt Ltd, Reckitt Benckiser (India) LtdInfrastructure Kaefer Punj Llyod Ltd, Punj Lloyd Ltd, RITES Ltd
  • 6. Upcoming Investments in Gurgaon Government plans for Gurgaon CityAs result of strong economic growth and 1. Haryana Urban Developmentemerge of modern facilities, Gurgaon is the Authority (HUDA) has proposed to launchfavored destination of real estate and an Amusement Park in Gurgaon and hashospitality players which have massive selected International Amusement Limited.plans for investment in the city to cater to The Park will be in two sections of the city.increasing demand for residential and One of the parts of the park will be incommercial places. sector 29 while the other one will be in  Anant Raj Industries is planning to sector 52. The plot size for the amusement launch its largest township project in park in sector 29 is 25 acres while in that of Central Gurgaon which is a mix sector 52 it is around 17 acres. With the development township located in amusement park passing through phases, Central Gurgaon spread over 125 the property prices in and around the area acres. The company will have a are expected to see hike in prices. saleable area of 6 million square 2. Haryana government is planning to feet in this project. set up 3 solar projects (225 kw) in  Alpha G:Corp will develop a group Gurgaon. Two solar projects will have a housing project in Gurgaon at an capacity of 100 kw and third one will be of investment of Rs 400 crore. There 25kw capacity. The project will entail an would be 670 housing units on a investment of Rs. 590 million. 12.5 acre land, which is owned by Magnum International. Infrastructure  Tata Housing Development Co Ltd announced the launch of its new With the continued efforts by the residential project in Gurgaon - government, the city had seen rapid Primanti, a premium luxury housing changes in infrastructure development complex. Primanti is a green haven which has boosted connectivity within the with 80 per cent of the property city and with surrounding areas. reserved for open spaces.  Golden Tulip Hospitality Group plans 1. Gurgaon has fine network of roads as to open hotel in Gurgaon. NH8 expressway connects the city with Delhi while there is also a parallel Delhi Metro connecting it with the capital city with lakh of passengers daily commuting to Gurgaon for work.
  • 7. 2. Kundli Manesar Palwal expressway 3. Special Economic Zones (SEZs) – therewill connect Manesar which is the are 3 operational SEZs in Gurgaon – a)industrial heartland of Gurgaon district, DLF Cyber City, DLF Cyber Space, DLFwith other parts of Haryana. This will also Ltd.ease the traffic congestion at Gurgaon The growth story of Gurgaon is unabatedexpressway. The localities like DLF city, with the innumerable factors driving city’sSouthcity etc will get direct benefit as development. We are marking few pointstraffic congestion caused by trucks coming which are booming Gurgaon as preferablefrom Mumbai and Jaipur will ease with investment commercial hub and preferreddiversion of their route through the new choice for residence by upper middle andKMP expressway. upper income class.Growth Drivers for Gurgaon, the Global City  Gurgaon is the planned city falling in state of Haryana. While on one hand it benefits from its proximity to Delhi, it has major advantage of being part of the prosperous and growing state.  IT, ITES, manufacturing sectors and boom of Special Economic Zones  Proximity to Delhi- the capital city and commercial centre of north India  Globally connected, preferred choice of white collar class  About 2,00,000 vehicles enter and exit from the city every day.  Abundance of land as compared to Delhi where all land sources are exhausted  Enhanced connectivity with launch of metro services  Lack of supply of residential properties in Delhi leading to high level congestion with high rate of migration in the city.  Haryana boasts of a very transparent land acquisition policy  Gurgaon - Industrial heartland of North India  International standard of living
  • 8. GURGAON Residential Property - Return and Growth OpportunityOwing to its rapid economic growth and spurt in commercial activity marked by expansion oforganized sector, Gurgaon has become an ideal real estate destination. There are about 45ongoing projects in Gurgaon. All the renowned developers like DLF, Unitech, Emaar MGF,BPTP, Ansal API have set up their residential projects in Gurgaon.Owning property in Gurgaon is a symbol of status as top executives and businessmen reside inGurgaon localities. Sector 67, MG Road, and Golf Course Road are the most expensivelocations in Gurgaon with their prices per square ranging from Rs. 10,000 per square feet toRs. 20,000 per square feet.Most expensive real estate locations in GurgaonLocation April- June 2011 (in Rs. per square feet)Sector-67 19,888M G Road 10,602Golf Course Road 10,190DLF City Phase V 9,583DLF City Phase IV 9,179Sector-31 8,932Sector-30 8,778DLF City Phase II 8,729Sector-65 8,652South City I 8,576
  • 9. Rentals in GurgaonGurgaon has been able to fetch highest rentals in North India with unrelenting demand comingfrom the migrants working in Gurgaon based companies. Sector 42 in Gurgaon has highestrentals which is as high as Rs. 38,000 for 1000 square feet. MG Road, Sushant Lok, Sector 28are another posh locations in Gurgaon demanding high rentals.Rental in Gurgaon (end of September2011)Locality in Gurgaon Monthly Rent per 1000 square feet (Rs.)Sector-42 38,462M G Road 30,004Sushant Lok-II 29,106Sector-28 26,923Rosewood Block- C 25,962DLF City Phase I 25,217Rosewood Block- D 25,063Heritage City 25,013DLF City Phase IV 24,345
  • 10. Localities in Gurgaon with maximum yearly price increaseLooking at real estate as an investment option, an obvious and most important factor is thelevel of return a property fetches to the investor. While on one hand we have highlighted theoverall significance of Gurgaon as realty investment destination, it is also important to look atthe locations which have been fetching maximum return. We have analyzed such locations onbasis of their price trend and approximate returns the in investors in these properties wouldhave made.Table 1: Top rising real estate Locations in Gurgaonlocation Average Annual Price Return (%) (Rs. per square feet)Gurgaon - Faridabad 6,869 121.40RoadSushant Lok- Sector-43 6,370 85.67Sector-65 8,652 83.30Sector-39 7,600 63.80Rosewood Block- D 8,002 55.88Sector-66 5,575 54.24South City I 8,576 48.51Golf Course Road 10,190 48.36South City II 5,893 47.37Sector-69 4,167 45.70Sector-61 5,329 44.17Sector-33 5,470 42.67Sushant Lok-I 7,644 41.39Sector-70 4,168 41.25Sector-23 40.77Sector-31 8,932 40.68Dlf City Phase V 9,583 39.96Sector-47 5,845 39.91Sector-30 8,778 38.35Orchid Petal 5,854 37.79Sector-52 5,180 37.52Dlf City Phase II 8,729 35.93Sector-28 35.49South City I- Sector-30 35.30Sector-55 4,575 31.97Sector-56 4,841 31.72
  • 11. Properties in GurgaonThe largest and most experienced developers of India have set up their projects in Gurgaon toavail the market demand for high end residential projects. However, slowly the trend hasmoderated and developers are also entering the medium income segment to tap the marketdemand there.Top 15 projects in Gurgaon with highest property ratesProject Developer Location Price (Rs. Per square feet)The Verandas Saluja Construction Sector-54, Gurgaon- 14,000 Limited Sec-84The Hibiscus SS Group Sec-50, Gurgaon-Sec- 9,000 50IREO SKYON Ireo Victory Valley Pvt. Sec-60, Gurgaon-Sec- 7,473 Ltd 60Indiabulls-Enigma Indiabulls Construction Sec-110, Gurgaon- 7,319 Sec-110Sovereign Apartments Vatika Limited Sec-49, Gurgaon-Sec- 6,499 49South City-II Unitech Group Sector-50, Gurgaon- 6,470Independent Floo.. Sec-84Florence Residency Ansal Buildwell Gurgaon-Sushant 6,245 Lok-II & IIIFreedom Park Life BPTP Limited Sec-57, Gurgaon-Sec- 5,878 57INXT Floors Vatika Limited Sec-82, Gurgaon-Sec- 5,834 82Harmony Nirvana Unitech Group Sec-50, Gurgaon-Sec- 5,828Country 50Mansions,Park Prime BPTP Limited Sec-66, Gurgaon-Sec- 5,499 66Esencia-Sovereign Ansal API Sec-67, Gurgaon-Sec- 5,263Floors 67Bestech Park View Bestech India Pvt. Ltd Sec-81, Gurgaon-Sec- 5,074Ananda 81Palm Gardens Emaar MGF Sec-83, Gurgaon-Sec- 5,027 83Mahindra Aura Phase- Mahindra Lifespace Sec-110 A, Gurgaon- 4,737III Developers Ltd Sec-110 A
  • 12. Ten Most Economical Residential Projects in GurgaonProject Developer Location Price (Rs. Per square feet)Ansal Heights Ansal Housing & Construction Sec-92, Gurgaon- 2,599 Ltd. Sec-92Aster Court Orris Infrastructure Pvt. Ltd. Sec-85, Gurgaon- 2,880 Sec-85The Coralwood SS Group Sec-84, Gurgaon- 2,930 Sec-84NCR Greens Sidhartha Buildhome Pvt. Ltd. Sec-95, Gurgaon- 3,026 Sec-95Park Serene BPTP Limited Sec-37D, Gurgaon- 3,132 Sec-37DCarnation Orris Infrastructure Pvt. Ltd. Sec-85, Gurgaon- 3,148Residency Sec-85Lavanya Vipul Limited Sec-81, Gurgaon- 3,258Apartments Sec-81SKYZ Ramprastha Promoters & Sec-37D, Gurgaon- 3,449 Developers (Pvt) Ltd Sec-37DSpire Flexihomes Spire World Sec-68, Gurgaon- 3,603 Sec-68Lumbini Terrace Brisk Infrastructure & Developers Sec-109, Gurgaon- 3,617Homes Pvt. Ltd Sec-109
  • 13. There has always been this debate, from the pure investment perspective, whether to invest inan apartment or in a land plot or in a residential house. The data collected by our research hasshown that in Gurgaon, plots have yielded maximum return. The pr prices in 2011 had almostdoubled in a year’s time. However at the same time, only selected investors can invest in plotsdue to difficulty in obtaining finance and limited availability Banks, in India, as per RBI rules, availability.cannot give loans for investing in land plots. Hence, investors looking for invvesting lump sumwith investment horizon of over 4 5 years, can choose land plots as investment instrument. 4-5 Where to invest 100.00 94.72 90.00 80.00 70.27 70.00 60.00 50.00 2011 40.00 32.45 2010 30.00 16.80 20.00 11.57 7.54 10.00 0.00 Apartment Plot Residential house
  • 14. FEATURING GURGAON….Demand for residential segment depends on investment in malls, schools, hospitals and otherentertainment facilities. Big players in all categories have come with their projects in Gurgaonand many are expected to come in future as well. Below is list of few such players in thesesegments.5 Star Hotels in Gurgaon Malls in Gurgaon  Leela Kempinski  Ambi Mall (NH8)  Marriott  Ansals Plaza  Trident  DLF City Centre  Oberoi Hotel  DLF Grand mall  Courtyard Hotel  DLF Mega mall  JW Marriott, Hyatt Andaz and Hyatt  Gold Souk mall (Specialty mall) Place, Dusit D2, Pride Hotel , Pullman,  Gurgaon Central Red Fox, Lemon Tree, Ibis, Holiday Inn  JMD Regent Plaza and Novotel will be operational by  MGF Mega City mall 2012.  MGF Metropolitan  Omaxe Plaza (SRS),Sohna RoadEntertainment  Sahara mall  Kingdom of Dream  Senior Mall  Fun and Food Place  The Galaxy mall  32 Mile Stone  The Landmark Mall  The Plaza (Speciality mall)  MGF Metropolis Mall  The Wedding mall  Raheja Shopping mall  Centre Plaza mall  Metro Mall in GurgaonTop Schools in Gurgaon - There are 219 high Top Hospitals in Gurgaonschools/senior schools, 148 middle schools and  Medanta- The Medcity
  • 15. 602 pre-primary and primary schools. primary  Artemis Hospital  Max Hospital  Amity International School  Paras Hospital  Blue Bells Group of Schools  DPS Gurgaon  Banyan Tree  Heritage School  Summer Fields  Scotish High International Gurgaon Real E Estate - loans and legal issuesAs the housing demand has increased multifold in Gurgaon, the housing loans have also beengrowing at 16 % annual rate. Also, average size of loan has increased by 32 % in last five years. Loans for Housing (Rs. lakh) 25,000,000 22,128,203 20,000,000 17,630,773 18,272,427 14,929,932 15,000,000 11,677,331 10,000,000 5,000,000 - 2006 2007 2008 2009 2010Interest rates have important impact on demand for real estate as rise in interest rates increase demandthe cost of money. While interest rates have reduced from 2007 to 2010, RBI started increasinginterest rates in 2010 due to high inflation rate. Increasing interest rate trend has continuedsince then and has affected the deals which have slowed down. nd
  • 16. Average Prime Lending Rate 15 10 5 0 2007 2008 2009 2010 2011Home loan mechanism and schemesIn India, home loans are provided by banks and NBFCs. There are two types of home loans: 1. Fixed rate home loans – when the rate of interest is fixed on home loan for entire tenure of the loan period, it is known as fixed rate home loans. A few banks come out with teaser home loans which have interest rate for first few years. However, as per RBI’s recent quidelines, banks have to keep higher asset provisioning for such loans in order to discourage the banks. 2. Floating rate home loans – The interest rates on the loan change with changing interest rates by the regulator. Overall, the fixed rate home loans have higher interest rates than the floating rate home loans.Prevailing home loan rates as on Nov 2011Bank Maximum Loan Maximum Term Fixed RateHDFC Bank 80% of the cost of the 20 years 10.75%-11.75% property (including the cost of the land)ICICI Bank 80% of the cost of the 20 years 10.5%-11.75% property or the cost of constructionAxis Bank Varies 25 years 11.75%Source: Various bank websitesBuying any property will involve two components of cost: basic cost + additional cost. Generallydevelopers do not disclose additional cost, stamp duty and other government charges whichare part of additional price. The stamp duty rates are decided by state government, and thus
  • 17. vary from one city to another. So it is important to incorporate the cost of samp duty hilelooking any property investment.Stamp Duty rate in GurgaonParticulars Applicable duty rateon sale/purchase of 6 % on the conveyance amountimmovable propertylease of immovable property 1.5 % of the average annual rent reservedfor 3 yearslease of immovable property 1.5 % of the average annual rent reservedfor 3 to 5 yearslease of immovable property 6 % on the consideration equal to the amount or value offor 5 to 10 years the annual average rent reservedlease of immovable property 3 % on the consideration equal to four times the amount orfor more than 30 years value of the annual average rent reserved
  • 18. About usVijyalaxmi Group operates in space of real estate investment sector powered by research andinformation services. It operates through- Vijya Realty Services and Vijya Research & Advisory.Vijya Realty Services’ prime objective is to provide the clients with information basedconsultancy services in real estate sector to ensure unbiased knowledge on various investmentoptions across different segments. Vijya Research & Advisory undertakes economic andbusiness research on industries, sectors, products, geographies and development studies.Services of Vijya Realty Services:1 Property Location Advisory – We have expertise in profiling localities at city level and sub-city level. Vijya Realty Services helps client in scanning different localities based on range ofimportant parameters. We help understand the profile of locality, its advantages anddisadvantages, infrastructure facilities, law and order situation which become crucial factors inselecting property location.2 Project Investment Advisory – Rapid growth in real estate has fuelled starting up of largenumber of projects in residential, commercial and retail segment. Vijya Realty Services providedetailed, unbiased and fair knowledge on different set of projects which empowers the client tomake decision. Our project advisory service includes:  Growth prospects of projects  Comparative Analysis  Pricing  Developers Profile  Distance Analysis3 Knowledge Services –Real estate is the most dynamic sector of all where price movement is rapid and is governed bydynamic factors. We service our clients throughout pre-transaction and post-transaction phases.We keep clients updated of price changes of their property status on periodic basis and alsokeep updating them about project completion and possession status.4 Rental Management- A large section of real estate investors make continuous income sourcefrom renting out the property to tenants. We provide rental management services to our clientsin which we undertake complete end to end dealing with tenants. Our rental managementservices include:  Undertake rental deed  Monthly rental collection  Tenant interaction  Periodic reporting
  • 19. 5 Transaction AdvisoryReal estate transactions are complex, time-consuming and require expertise from legal and taxperspective. We manage complete real estate transaction management on behalf of our clientsfrom stage of negotiation till property handover. Our transaction advisory services include:  Short listing projects  Negotiating with developers  Legal advisory  Taxation advisory  Possession status report6 NRI Services – Vijya Realty upholds a special cell dedicated to meet the needs of Non-Residents of India to invest in real estate of India which is seen as most profitable investmentinstrument back home by NRIs. We help NRIs select the property best suited to their investmentneeds, with potential to yield maximum return. We undertake entire process of deal making onbehalf of them to ensure a smooth and hassle free investment process. We serve NRIs acrosscountries with our services which include:  Investment Planning  Real Estate Advisory  Transaction Management  Rental Management  Financial and Taxation Advisory  Legal AdvisoryContactPiyush JainVijyalaxmi GroupEmail : piyush.jain@kapsole.comMobile: 9818771446