gurgaon report vijyalaxmi group

aa

VIJYA RESEARCH AND ADVISORY

2011

‘GURGAON CALLING’ Gurgaon Real Estate as Investment Destination

Gurgaon Growth Story Infrastructure Corporate presence Best residential properties Top Developers Legal issues Financing

Gurgaon in Ten Years – Investment and Development

Gurgaon…the millennium city

Gurgaon, one of the most happening cities of North India, is a classic example of urbanization fuelled by industrial and economic development. From a village on outskirts of national capital, with population of 8.7 lakh in 2001, Gurgaon has transformed in to a bustling city of heavy corporate activity, will all the nerves now shifting from Delhi to Gurgaon. As MNCs

have clearly preferred Gurgaon over Delhi to set up their offices with availability of modern office space, superior infrastructure and proximity to Southern Delhi, Gurgaon has also become a natural choice for people looking to move their residences with the city offering ample job opportunities. The city is now lured as the ultimate destination by one and all.

Area(Gurgaon district) 1,253 sq.km.

Area (Gurgaon city) 738 sq. km Literacy rate (2011) 84.4%Population (2001)

870,664 Population (2011)

1,514,085 Rural

472,085 Urban

1,042,000 Population Growth (2001-2010)

73.9%

Rural -15.8% Urban 236.5%Growth of urban population – Haryana

44.3%

Municipal Wards 35

Urbanization in Gurgaon...How a village turned into 21st century Metropolitan

In 2001, only 35.6% of the Gurgaon district was urbanized. Rapid growth in last ten years has increased urbanization level to 69%. While growth in Delhi’s population has slowed downbetween 2001 and 2010, population of NCR cities like Gurgaon has jumped heavily.

Gurgaon, at present, accounts for 6% of the total population of Haryana state. Haryana is 16th largest state in India and fourth largest state in North India in terms of population size.

Last 5 years have seen considerable migration from Delhi to Gurgaon, lured by the charm of modern living, and modern facilities matched up to international standards. Key attraction point for Gurgaon was building of Delhi international airport which is only 16 kilometer away from mainland Gurgaon.

Given its strategic location, infrastructure facilities and optimum property prices, the city soon turned out be the work place of the Fortune 500 companies and became IT hub of North India.

Next turning point came in history of Gurgaon was building of toll road covering 24 kilometers with capital city in matter of mere 20 minutes. On an

average, daily 2 lakh passenger carscommute through this road to reach their office places. Indeed, a large part of these daily commuters also weave the dream of owning their residences in the city.

Gurgaon was the place to bring shopping mall culture to the national capital territory. One of the first set of malls in NCR region was developed in Gurgaon.

Gurgaon, the residence of elite and upper middle class, houses the best of entertainment places, clubs, bars and lounges.

Gurgaon economy…growing stronger and larger!

Gurgaon today is a vibrantcommercial centre, large manufacturing hub in north India and base for corporate activity.

Gurgaon district has been growing at average 16 % in GDP terms during last ten years.

Another striking feature of Gurgaon economy is equal presence of services and manufacturing share. Gurgaon is also the hub for manufacturing companies, especially, auto parts, garments, rubber, plastic.

Leading job portals show far higher job creation in Gurgaon as compared to other NCR cities like Noida and Faridabad.

Gross 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. 12% growth in past 5 years which is far higher than other NCR cities.reflects rapidly rising economic and commercial activity in the city which makes it even more lucrative investment destination.

0500,000

1,000,0001,500,0002,000,0002,500,0003,000,000

Rs. l

akh

Gurgaon GDP size (at market prices)

0%

2%

4%

6%

8%

10%

12%

14%

Gurgaon Faridabad

GDP of Gurgaon and NCR cities

Gross domestic product (GDP) reflects the value of economic activities in the given territory. Gurgaon, Faridabad (Haryana); Noida, Ghaziabad (Uttar Pradesh)

GDP and also highest growing GDP. In Gurgaon, GDP has registered 12% growth in past 5 years which is far higher than other NCR cities. Higher GDP growth

rapidly rising economic and commercial activity in the city which makes it even more ve investment destination.

Gurgaon GDP size (at market prices)

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

Faridabad Noida Gaziabad

GDP of Gurgaon and NCR cities

Gross domestic product (GDP) reflects the value of economic activities in the given territory. Gurgaon, Faridabad (Haryana); Noida, Ghaziabad (Uttar Pradesh)

GDP has registered Higher GDP growth

rapidly rising economic and commercial activity in the city which makes it even more

GDP

Average Growth

Industrial Development in Gurgaon

Gurgaon has unique advantage of having industries closely located. Out of 34 SEZsbeing awarded to Haryana, 30 are located in Gurgaon. Tall office buildings in Gurgaon are base of multinationals and large Indian companies across various sectors. IT, ITes amongst the service sector and auto in manufacturing sector have maximum presence in Gurgaon. Gurgaon-Manesar-Bawal region of Haryana has been identified

as an Auto Hub by the Centre and the state government.

Table below highlights top companiesoperating from Gurgaon. With Gurgaon gaining importance as corporate centre with more and more companies openingtheir office in the city, this will further push up the demand for residential property, thus promising good returns on investment in residential property.

Sector Companies IT/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, Genpact

Auto Bajaj Motors, General Motors India Pvt Ltd , Honda Motorcycle and Scooter India Pvt Ltd

Auto Ancilliary Apollo Tyres, DELPHI Automotive System, Minda Industies Ltd, Niko Auto Ltd , Rico Auto Industries

Banking Standard Chartered Bank, HSBC, American Express Banking Corporation

Telecom Aircel, Airtel, Alcatel Lucent, Ericsson India , Micromax Informatics, ZTE Telecom India Pvt Ltd

Consumer Durables Videocon, Philips Electronics India Ltd, Samsung India Electronics Ltd, Whirpool India Ltd

Consumer 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) Ltd

Infrastructure Kaefer Punj Llyod Ltd, Punj Lloyd Ltd, RITES Ltd

Upcoming Investments in Gurgaon

As result of strong economic growth and emerge of modern facilities, Gurgaon is the favored destination of real estate and hospitality players which have massive plans for investment in the city to cater to increasing demand for residential and commercial places.

Anant Raj Industries is planning to launch its largest township project in Central Gurgaon which is a mix development township located in Central Gurgaon spread over 125 acres. The company will have a saleable area of 6 million squarefeet in this project.

Alpha G:Corp will develop a group housing project in Gurgaon at an investment of Rs 400 crore. There would be 670 housing units on a 12.5 acre land, which is owned by Magnum International.

Tata Housing Development Co Ltd announced the launch of its new residential project in Gurgaon -Primanti, a premium luxury housing complex. Primanti is a green haven with 80 per cent of the property reserved for open spaces.

Golden Tulip Hospitality Group plans to open hotel in Gurgaon.

Government plans for Gurgaon City

1. Haryana Urban Development Authority (HUDA) has proposed to launch an Amusement Park in Gurgaon and has selected International Amusement Limited. The Park will be in two sections of the city. One of the parts of the park will be in sector 29 while the other one will be in sector 52. The plot size for the amusement park in sector 29 is 25 acres while in that of sector 52 it is around 17 acres. With the amusement park passing through phases, the property prices in and around the area are expected to see hike in prices. 2. Haryana government is planning to set up 3 solar projects (225 kw) in Gurgaon. Two solar projects will have a capacity of 100 kw and third one will be of 25kw capacity. The project will entail an investment of Rs. 590 million.

Infrastructure

With the continued efforts by the government, the city had seen rapid changes in infrastructure development which has boosted connectivity within the city and with surrounding areas.

1. Gurgaon has fine network of roads as 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.

2. Kundli Manesar Palwal expresswaywill connect Manesar which is the industrial heartland of Gurgaon district, with other parts of Haryana. This will also ease the traffic congestion at Gurgaon expressway. The localities like DLF city, Southcity etc will get direct benefit as traffic congestion caused by trucks coming from Mumbai and Jaipur will ease withdiversion of their route through the new KMP expressway.

3. Special Economic Zones (SEZs) – there are 3 operational SEZs in Gurgaon – a) DLF Cyber City, DLF Cyber Space, DLF Ltd.

The growth story of Gurgaon is unabated with the innumerable factors driving city’s development. We are marking few points which are booming Gurgaon as preferable investment commercial hub and preferred choice for residence by upper middle and 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

GURGAON Residential Property - Return and Growth Opportunity

Owing to its rapid economic growth and spurt in commercial activity marked by expansion of organized sector, Gurgaon has become an ideal real estate destination. There are about 45 ongoing 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 in Gurgaon localities. Sector 67, MG Road, and Golf Course Road are the most expensive locations in Gurgaon with their prices per square ranging from Rs. 10,000 per square feet to Rs. 20,000 per square feet.

Most expensive real estate locations in Gurgaon Location April- June 2011 (in Rs.

per square feet)Sector-67 19,888 M G Road 10,602 Golf Course Road 10,190 DLF City Phase V 9,583 DLF City Phase IV 9,179 Sector-31 8,932 Sector-30 8,778 DLF City Phase II 8,729 Sector-65 8,652 South City I 8,576

Rentals in Gurgaon

Gurgaon has been able to fetch highest rentals in North India with unrelenting demand coming from the migrants working in Gurgaon based companies. Sector 42 in Gurgaon has highest rentals 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 38,462 M G Road 30,004 Sushant Lok-II 29,106 Sector-28 26,923 Rosewood Block- C 25,962 DLF City Phase I 25,217 Rosewood Block- D 25,063 Heritage City 25,013 DLF City Phase IV 24,345

Localities in Gurgaon with maximum yearly price increase

Looking at real estate as an investment option, an obvious and most important factor is the level of return a property fetches to the investor. While on one hand we have highlighted the overall significance of Gurgaon as realty investment destination, it is also important to look at the locations which have been fetching maximum return. We have analyzed such locations on basis of their price trend and approximate returns the in investors in these properties would have made.

Table 1: Top rising real estate Locations in Gurgaon

location Average Price (Rs. per square feet)

Annual Return (%)

Gurgaon - Faridabad Road

6,869 121.40

Sushant 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

Properties in Gurgaon

The largest and most experienced developers of India have set up their projects in Gurgaon to avail the market demand for high end residential projects. However, slowly the trend has moderated and developers are also entering the medium income segment to tap the market demand there.

Top 15 projects in Gurgaon with highest property rates

Project Developer Location Price (Rs. Persquare feet)

The Verandas Saluja Construction Limited

Sector-54, Gurgaon-Sec-84

14,000

The Hibiscus SS Group Sec-50, Gurgaon-Sec-50

9,000

IREO SKYON Ireo Victory Valley Pvt. Ltd

Sec-60, Gurgaon-Sec-60

7,473

Indiabulls-Enigma Indiabulls Construction Sec-110, Gurgaon-Sec-110

7,319

Sovereign Apartments Vatika Limited Sec-49, Gurgaon-Sec-49

6,499

South City-II Independent Floo..

Unitech Group Sector-50, Gurgaon-Sec-84

6,470

Florence Residency Ansal Buildwell Gurgaon-Sushant Lok-II & III

6,245

Freedom Park Life BPTP Limited Sec-57, Gurgaon-Sec-57

5,878

INXT Floors Vatika Limited Sec-82, Gurgaon-Sec-82

5,834

Harmony Nirvana Country

Unitech Group Sec-50, Gurgaon-Sec-50

5,828

Mansions,Park Prime BPTP Limited Sec-66, Gurgaon-Sec-66

5,499

Esencia-Sovereign Floors

Ansal API Sec-67, Gurgaon-Sec-67

5,263

Bestech Park View Ananda

Bestech India Pvt. Ltd Sec-81, Gurgaon-Sec-81

5,074

Palm Gardens Emaar MGF Sec-83, Gurgaon-Sec-83

5,027

Mahindra Aura Phase-III

Mahindra Lifespace Developers Ltd

Sec-110 A, Gurgaon-Sec-110 A

4,737

Ten Most Economical Residential Projects in Gurgaon

Project Developer Location Price (Rs. Persquare feet)

Ansal Heights Ansal Housing & Construction Ltd.


2,599

Aster Court Orris Infrastructure Pvt. Ltd. Sec-85, Gurgaon-Sec-85

2,880

The Coralwood SS Group Sec-84, Gurgaon-Sec-84

2,930

NCR Greens Sidhartha Buildhome Pvt. Ltd. Sec-95, Gurgaon-Sec-95

3,026

Park Serene BPTP Limited Sec-37D, Gurgaon-Sec-37D

3,132

Carnation Residency

Orris Infrastructure Pvt. Ltd. Sec-85, Gurgaon-Sec-85

3,148

Lavanya Apartments

Vipul Limited Sec-81, Gurgaon-Sec-81

3,258

SKYZ Ramprastha Promoters & Developers (Pvt) Ltd

Sec-37D, Gurgaon-Sec-37D

3,449

Spire Flexihomes Spire World Sec-68, Gurgaon-Sec-68

3,603

Lumbini Terrace Homes

Brisk Infrastructure & Developers Pvt. Ltd


3,617

There has always been this debate, from the pure investment perspective, whether to invest in an apartment or in a land plot or in a residential house. shown that in Gurgaon, plots have yielded maximum return. The prdoubled in a year’s time. However at the same time, only selected investors can invest in due to difficulty in obtaining finance and limited availabilitycannot give loans for investing in with investment horizon of over 4

32.45

94.72

11.57

0.0010.0020.0030.0040.0050.0060.0070.0080.0090.00

100.00

Apartment

Where to invest

There has always been this debate, from the pure investment perspective, whether to invest in an apartment or in a land plot or in a residential house. The data collected by our research has shown that in Gurgaon, plots have yielded maximum return. The prices in 2011 had almost

year’s time. However at the same time, only selected investors can invest in to difficulty in obtaining finance and limited availability. Banks, in India, as per

give loans for investing in land plots. Hence, investors looking for invhorizon of over 4-5 years, can choose land plots as investment instrument.

94.72

70.27

16.807.54

Plot Residential house

Where to invest

2011

2010

There has always been this debate, from the pure investment perspective, whether to invest in The data collected by our research has

in 2011 had almost year’s time. However at the same time, only selected investors can invest in plots

Banks, in India, as per RBI rules,vesting lump sum

5 years, can choose land plots as investment instrument.

FEATURING GURGAON….

Demand for residential segment depends on investment in malls, schools, hospitals and other entertainment facilities. Big players in all categories have come with their projects in Gurgaon and many are expected to come in future as well. Below is list of few such players in these segments.

5 Star Hotels in Gurgaon

Leela Kempinski Marriott Trident Oberoi Hotel Courtyard Hotel JW Marriott, Hyatt Andaz and Hyatt

Place, Dusit D2, Pride Hotel , Pullman, Red Fox, Lemon Tree, Ibis, Holiday Inn and Novotel will be operational by 2012.

Entertainment

Kingdom of Dream Fun and Food Place 32 Mile Stone

Malls in Gurgaon

Ambi Mall (NH8) Ansals Plaza DLF City Centre DLF Grand mall DLF Mega mall Gold Souk mall (Specialty mall) Gurgaon Central JMD Regent Plaza MGF Mega City mall MGF Metropolitan Omaxe Plaza (SRS),Sohna Road Sahara mall Senior Mall The Galaxy mall The Landmark Mall The Plaza (Speciality mall) MGF Metropolis Mall The Wedding mall Raheja Shopping mall Centre Plaza mall

Metro Mall in Gurgaon

Top Schools in Gurgaon - There are 219 high schools/senior schools, 148 middle schools and

Top Hospitals in Gurgaon

Medanta- The Medcity

602 pre-primary and primary schools.

Amity International School Blue Bells Group of Schools DPS Gurgaon Banyan Tree Heritage School Summer Fields

Scotish High International

Gurgaon Real E

As the housing demand has increased multifold in Gurgaon, the housing loans have also been growing at 16 % annual rate. Also, average size of loan has increased by 32 % in last five years.

Interest rates have important impact on demanthe cost of money. While interest rates have reduced from 2007 to 2010, RBI started increasing interest rates in 2010 due to high inflation rate. Increasing interest rate trend has continued since then and has affected the deals which have slowed down.

11,677,331 14,929,932

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

2006

primary and primary schools.

Amity International SchoolBlue Bells Group of Schools

Scotish High International

Artemis Hospital Max Hospital

Paras Hospital

Gurgaon Real Estate - loans and legal issues


Interest rates have important impact on demand for real estate as rise in interest rates increase the cost of money. While interest rates have reduced from 2007 to 2010, RBI started increasing interest rates in 2010 due to high inflation rate. Increasing interest rate trend has continued

nd has affected the deals which have slowed down.

14,929,932 17,630,773 18,272,427

22,128,203

2007 2008 2009 2010

Loans for Housing (Rs. lakh)


d for real estate as rise in interest rates increase the cost of money. While interest rates have reduced from 2007 to 2010, RBI started increasing interest rates in 2010 due to high inflation rate. Increasing interest rate trend has continued

22,128,203

2010

Home loan mechanism and schemes

In 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 Rate

HDFC Bank 80% of the cost of the property (including the cost of the land)

20 years 10.75%-11.75%

ICICI Bank 80% of the cost of the property or the cost of construction

20 years 10.5%-11.75%

Axis Bank Varies 25 years 11.75%

Source: Various bank websites

Buying any property will involve two components of cost: basic cost + additional cost. Generally developers do not disclose additional cost, stamp duty and other government charges which are part of additional price. The stamp duty rates are decided by state government, and thus

0

5

10

15

2007 2008 2009 2010 2011

Average Prime Lending Rate

vary from one city to another. So it is important to incorporate the cost of samp duty hile looking any property investment.

Stamp Duty rate in Gurgaon

Particulars Applicable duty rate

on sale/purchase of immovable property

6 % on the conveyance amount

lease of immovable property for 3 years

1.5 % of the average annual rent reserved

lease of immovable property for 3 to 5 years

1.5 % of the average annual rent reserved

lease of immovable property for 5 to 10 years

6 % on the consideration equal to the amount or value of the annual average rent reserved

lease of immovable property for more than 30 years

3 % on the consideration equal to four times the amount or value of the annual average rent reserved

About us

Vijyalaxmi Group operates in space of real estate investment sector powered by research and information services. It operates through- Vijya Realty Services and Vijya Research & Advisory. Vijya Realty Services’ prime objective is to provide the clients with information based consultancy services in real estate sector to ensure unbiased knowledge on various investment options across different segments. Vijya Research & Advisory undertakes economic and business 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 of important parameters. We help understand the profile of locality, its advantages and disadvantages, infrastructure facilities, law and order situation which become crucial factors in selecting property location.

2 Project Investment Advisory – Rapid growth in real estate has fuelled starting up of large number of projects in residential, commercial and retail segment. Vijya Realty Services provide detailed, unbiased and fair knowledge on different set of projects which empowers the client to make decision. Our project advisory service includes:

Growth prospects of projects Comparative Analysis Pricing Developers Profile Distance Analysis

3 Knowledge Services –

Real estate is the most dynamic sector of all where price movement is rapid and is governed by dynamic 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 also keep updating them about project completion and possession status.

4 Rental Management- A large section of real estate investors make continuous income source from renting out the property to tenants. We provide rental management services to our clients in which we undertake complete end to end dealing with tenants. Our rental management services include:

Undertake rental deed Monthly rental collection Tenant interaction Periodic reporting

5 Transaction Advisory

Real estate transactions are complex, time-consuming and require expertise from legal and tax perspective. We manage complete real estate transaction management on behalf of our clients from stage of negotiation till property handover. Our transaction advisory services include:

Short listing projects Negotiating with developers Legal advisory Taxation advisory Possession status report

6 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 investment instrument back home by NRIs. We help NRIs select the property best suited to their investment needs, with potential to yield maximum return. We undertake entire process of deal making on behalf of them to ensure a smooth and hassle free investment process. We serve NRIs across countries with our services which include:

Investment Planning Real Estate Advisory Transaction Management Rental Management Financial and Taxation Advisory Legal Advisory

Contact

Piyush Jain

Vijyalaxmi Group

Email : [email protected]

Mobile: 9818771446