Realty Ears on the Ground Suggests that prime Gurgaon projects, have the dominant theme that came out from the discussions was a "price convergence" of South Delhi and Gurgaon. While at first instance this suggestion looks lofty, we note that price appreciation for DLF's Golf course and Ambience projects has been far better than South Delhi. DLF's finished golf course inventory now retails between Rs 20-30K (Aralias and Magnolias) psf and non golf course facing between Rs 11-14K psf (Belaire / Park place)
Residential volumes in the markets have been driven by infrastructure initiatives to improve the connectivity to Delhi and relatively affordable price points. Most project launches in these regions have met with good success and have seen sharp appreciation over the last 2 years. The demand at this point seems to be more investor driven and speculative. However, as commercial activity picks up in the region as envisaged in the master plan, end user demand should pick up in the medium term.
Overall sales activity in the city is much better than rest of the country. Inventory levels are reasonably sound. Gurgaon, however, is expected to witness large number of deliveries in 2012. This could potentially result in sales activity shifting to the secondary market from the primary market.
DLF has close to 40-45 msf in the Phase V location (residential/commercial etc) and above 100 msf in New Gurgaon. Indeed these two locations are the company's biggest projects and hence it should then be a prime beneficiary of these rising asset
values.
Further down Gurgaon, in Sohna Road, completed rates in Unitech and competition projects are between RSs 6-7K psf and this rate used to be between Rs 3500-4000psf during 2009 (Nirvana Country I). Land rates here are near 10-12cr/acre (township land parcels).
New Gurgaon Current Residential Market Price is between Rs 3,500-6,000 psft
Sohna Road Current Residential Market Price s between Rs 5000-7000 psft
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