INVEST NOW IF YOU CAN WAIT

26 May, 2007


With low prices and ongoing infrastructure development, Kundli is ripe for investment, but don’t expect profits soon

Whenever a suburb of Delhi is selected for urban development, inevitable comparisons to Gurgaon and Noida are mad. Kundli is no exception. The difference here is, this place could rank close to its famous cousins sooner rather than later.

The first Indication of the promise is the infrastructure development taking place around the Kundli region. The other is a more concrete indicator. Major builders are putting money where their word is. Many of the big names are here. Construction, at least as a showcase, has begun. And the plans are also grand. The residential development here is not catering to a single class only. Even the smaller builders here are developing the entire spectrum of housing options – 2-BHK to 4-BHK and the penthouse is ubiquitous in most projects. Plots are also being made available in a wide range – 200 to 1,000 sq yd.

The Kundli region is already an established industrial belt, and major developers like DLF and Anantraj group have already come out with plans for IT parks.

GETTING THERE

Drive past the Maharana Pratap ISBT, and on to NH-1. After reaching Azadpur crossing, about 20 km after ITO, turn right on the GT Karnal road. The traffic is not very dense. The other good sign is that work on widening the highway is already in progress. Keep driving along and you will pass Alipur and Narela subcity. Check these out on another day. Drive another 2 km from Narela subcity, and you cross into Haryana at the Singhu border. About 4 km from Singhu border, across the road on your right, you can see the first project –TDI city. Projects here extend right up to Sonepat, but we will look at the Kundli-Rai corridor.

THE PLAYERS

While the big players are already marking their presence here, there are a number of smaller players as well, who have placed a stake in the future of this region. TDI is so far hosting the biggest project here. It currently has around 1,200 acres. Ansal API is also here with its Sushant City.  This 250 acres project is the most developed so far, with a few dwelling units already under habitation. CMD Pardesi is developing Ushay Towers on 8.5 acres. Parkar Residency, by Victory Buildwell is also a small project, and construction work has started here as well. If you go off the highway, and into the Rai area that borders Kundli, two more small projects are coming up – Green scape (A JV between Ansals and the Baderwals) and Tulip Grand, by Tulip Infratech.

THE ATTRACTION

It is a suburb, so the attraction is proximity to Delhi. But a dozen other places are close to Delhi. The industrial development being fostered by HSIDC is obviously an attraction here, but that is also happening in many places. For those with a longer horizon, however the upcoming Rajiv Gandhi City is now finally on track and the farmers’ agitation over acquisition of its land, have apparently being resolved.  The City will attract knowledge workers who will expect world-class residential amenities.

Work has not started on it, but when it is finally completed, it is proposed that this city would be about 7,000 acre wide. Currently 2068 acre has been acquired for it. The Motilal Nehru Sports School, Rai is already a recognized institution. The Kundli-Manesar-Palwal (KMP) expressway, which will help no-Delhi-bound traffic bypass Delhi, will improve the area’s connectivity with other areas of the region.

Besides the government initiatives, IT projects from private builders like DLF and Anantraj group are also going to come up.

INVEST NOW IF YOU CAN WAIT

They are likely to come up as a JV and offer IT parks over areas of 1,21,000 sq yd and 25 acres.

Proximity with north and west Delhi is also a big attraction. Pawan Jaju, GM marketing, Tulip Infratech says: “Kundli will be a major attraction for people currently living in north and west Delhi, just as Gurgaon has been for people living in south Delhi. These buyers can find in Kundli relatively economical housing, and the proposed and upcoming infrastructure projects such as the Metro, a new railway line, KMP expressway, and a wider NH will help them stay close enough to their current place of work.” These projects will of course help prices appreciate in the area. To cash in on the opportunity, a luxury hotel is also coming up in the area, being built by AMR group. However, an operator for the hotel has not been finalized yet.

A few malls are slated to come up between 2008 and 2010. Work on these malls is going ahead faster than on the residential units, as they can also cater to the Chandigarh bound traffic. Highway Plaza and Roman Court, in the Sushant City are likely to be ready by 2008. Malls in the TDI City could take a little longer as construction on them started about six months ago.

The slowdown, while a reality in Kundli, has not dampened the enthusiasm of the real estate market here, in which there are local as well as investors from outside the region. Pawan Kumar of Kuber Property, Kundli says: “The slowdown has affected only the residential properties. Trading in commercial properties in this corridor never slowed down.” There is also a view here that the slowdown is a cyclical phenomenon. It happens every summer and usually eases off by August or September.

THE DAMPENER

If any place in India could typify the current slowdown in real estate market, Kundli can. Rates are down. In fact, if an investor were to be desperate to cash out now, he may even have to do so at a discount. Though a lot of infrastructure is proposed, only the KMP expressway and widening of the NH are under progress. The Education City will take some years to even put up a few campuses on the ground. And while upbeat developers like TDI are going ahead with handing over possession of plots, homeowners are yet to start construction and the apartments are also in very early stages of construction in almost all the projects.

The status of projects can be gauged from the facts that apart from Ansals, the major players like TDI and Tulip have not come around to allotting their flats for the economically weaker sections yet. These houses should number 5-10 per cent of the dwelling units being built at the project, and Tulip proposes to take this number to 15 per cent, says Jaju.

What is worse, builders are unlikely to infuse any fresh supply while the current slowdown continues. Spaces in the IT projects of DLF and Anantraj have not made their way into the market. The reaction of Parveen Jain, Managing Director, Tulip Infratech sums up the situation best-while he has sold 65 per cent of the Kundli project, he would hold on to the rest. A sign that he sees promise in this area. Others like CMD Pardesi and Parkar Residence are all sold out.

BUYER PROFILE

No matter what the developers say, investors rule here. Even local investors play a big role here, perhaps buoyed by the money that has poured in here from selling agricultural land to residential and industrial developers. While investors have lapped up most of what was in the market, they obviously cannot have the holding power that can compare with the deep pockets of the builders and the developers. For the buyer therefore, this is a good time to buy property at relatively economical rates, which is complete in paper work, has been vetted by a third persons/broker, and is therefore secure, says Pawan Khurana of Ansh Property, Kundli. In fact, TDI has also set up a group of approved brokers and has provided them space inside its premises.

While Kundli started out as an ideal location for middle income buyers, it is no longer so for those who may have missed the first bus. The infrastructure plans for this place are out, and prices can only go up.

SHOULD YOU BUY?

You quite obviously cannot start living here from tomorrow onwards. But the day after, metaphorically speaking, this place promises to be a dream come true. The blessing is, infrastructure development here seems to be preceding the urban development. So that when this place is habitable, the resident would not have to put up with what the Gurgaon residents had to, with the construction of the controlled access highway being constructed on the NH-8.

When compared with prices in areas like Rohini, Pitampura, or even Sonepat, rates here are still low and at some point soon the difference would surely even out. In Sonepat, apartment rates are around Rs.15,000 per sq yd while in Kundli, ready for possession plots are going for about Rs.12,500 per sq yd. Differential with Delhi is of course much higher. So, if you can wait a bit for this area to develop, now would be good time to buy here. If you are looking to buy a house to rent or to move into it, you should look elsewhere.

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