Commercial and Residential Real Estate in NCR

Commercial Property

Commercial Property consists of any property which can be used for commercial purposes which generate income such as retail shops, office spaces, food courts, cineplex, parking structures, conference plazas, warehouses, factories, IT Data Centres, & other shops. They are different from property that may be used for residential or agricultural purposes that although may generate income, are primarily developed for personal, not industrial or commercial use.

From an investment point of view, there are several advantages of investing in a commercial property than a residential property in India. They include:

  • Commercial properties are generally developed after a lot of research. The developer takes into account things like cost of land acquisition, construction and other costs to derive their profit margins. The property is thus generally at a location that is easily accessible and well connected, amid a catchment area with few competing projects.
  • It is easier to lease commercial property for longer duration to corporates creating stable, assured rental income for life.
  • A large office space can be divided into smaller sections if need be, ensuring financial viability of the investment.
  • Property management in commercial properties can be managed by professionals and be paid by tenants ensuring reduced stress for the investor as compared to a commercial property.
  • The return on investment on a commercial property is generally between 9-21%, while for most residential property investments the returns are 1-3%.

Speaking specifically about the Real Estate Sector in the National Capital Region, the residential property rates are stuck at the 2013-2014 levels. There is massive inventory with the developers with some reports suggesting it might take over 4 years for the inventory to clear.

The commercial property sector meanwhile is faring much better with prices up nearly 45% from 2013 levels and vacancy rate below 5% in many micro pockets in Gurgaon. The demand of office space from corporates, ITeS, and retail are the key drivers of this phenomenon.

Residential Property

Residential property is should be the property one buys for their own personal needs. Various types of residential properties include Villas, Apartments, Luxury Condominiums, Bungalows, or plots of land which one plans to develop later. Generally, a person buys residential property only once or twice in their lifetime. Hence one should take their time researching about the property and do so with a clear picture of their current and future requirements in their minds.

Some requirements of residential property are:

  • It should be in a residential area. Buying a residential property in a commercial area makes little sense as one would be constantly disturbed by noises of vehicles coming and departing, of factory activity, and other commercial activities. From a security point of view too, a commercial area has a large floating population which is difficult to monitor.
  • It should be free from all claims and liens. Buying a property without doing due diligence is asking for trouble. At any point someone may stake a claim or raise objections which may take years to settle later and cost a fortune in legal fees.
  • It should be a quality construction. If buying built up property it is essential to check the builders previous projects and have an independent inspection of the property from professionals to assess quake resistance and take ample measures to prevent water seepage from cracks and joints.
  • It should be close to amenities. A recent research has found that most of the house buyers are young couples as their parents already have a house of their own. Independent nuclear families who plan to have children in the future and a big thing to plan for in India is the school where the children will go to. In fact people give more weightage to having a good school nearby than to markets, religious places, and even hospitals.
  • Other things to look for are the price of the property, law and order condition of the area, water and electricity supply to the property, & distance from work among others.

So we see that the two different types of properties cater to different people with their own needs. While the commercial property is bought with an aim to invest & perhaps either rent or sell later, a residential property is bought primarily for self. In both cases it is important to identify the needs or the reason for buying the property, doing due diligence, partnering with the right developer who is honest, has the expertise, and understanding of the local market to get you the best possible deal.

Know About The Real Estate Market of Delhi NCR

The Delhi NCR region has been the preferred choice of real estate developers and buyers for more than a decade. The saturation of Delhi in terms of real estate and subsequent spiraling property prices in Delhi made many move to the capital’s peripheral areas.

Nearly two decades ago Gurgaon witnessed a real estate boom. Now, it seems that Noida, Greater Noida and Ghaziabad are undergoing a similar transformation. Numerous real estate companies are investing in these places with an aim to tap the huge potential of this market.

According to reports, the Greater Noida Industrial Development Authority (GNIDA) plans to connect Greater Noida and the Indira Gandhi International Airport via a metro link. There are also widespread reports of the Delhi Metro Rail Corporation planning to extend the Blue Line from Noida City Centre to cover parts of Greater Noida. These are clear signals that Noida and Greater Noida are all set to become the most popular destinations for people looking for dream homes and lavish lifestyles at affordable prices. The well-connectivity factor makes up the jewel in the crown.

Having sensed the residential and commercial opportunities that places like Noida, Greater Noida and Ghaziabad are teeming with, major and minor real estate companies are expanding or launching their projects in these areas to attract customers from varying strata of society. Such projects include sprawling mansions spread over acres of lush green lawns, luxury condominiums housing clubs, swimming pools and gyms, modest housing complexes with 2 and 3 BHKs or entire townships provided with all the amenities of a world-class city. The many well-known construction companies based in Noida and Ghaziabad are diversifying into all kinds of real estate ventures. While many of such condominiums and apartments have already been constructed and even occupied by respective owners, dozens more are under construction and scores still in the planning stage.

Noida and Greater Noida have especially witnessed an increase in the supply and demand of luxury condominiums and housing units, the reason being their relatively affordable prices as compared to apartments provided with the same amenities in the heart of Delhi. Several big names in the Delhi NCR real estate industry are investing in projects like these, hoping to cash in on their surging popularity.

The year 2013 has been somewhat disappointing in terms of investment for the real estate market in India. All the same, the coming of an industry-friendly government at the centre this year coupled with an economic slowdown in the recent past ignite hope that the government will rouse the real estate industry from its current dormant state. There is also the hope of the inevitable that a gloom shall be followed by a glut in the market. Indeed, the hopes and spirits of real estate companies are justifiably high as the future of this industry looks bright and sanguine.