Knight Frank report sees hope in the NCR residential market

The following is the report by Knight Frank Report.

New Gurgaon and Golf Course Extension Road emerge as top residential destinations in NCR with expectations of 47 per cent and 42 per cent price appreciation by 2020

Knight Frank India on Wednesday launched the second edition of its Residential Investment Advisory Report 2016 for the NCR market. This report identifies the top investment destinations in NCR for the next five years (till 2020) and also reviews the performance of the previously recommended destinations.

Key takeaways

• The average square foot price in Golf Course Extension Road, at `8,300, is expected to touch `11,800 by 2020.

The social and physical infrastructure push, enhanced connectivity and a strong, existing, incremental office space pipeline are set to make this corridor a prime residential destination for homebuyers.

• New Gurgaon, currently at an average square foot price of `4,700, is expected to touch `6,900 by 2020.

The influence of New Gurgaon, especially sectors 81–95, is expected to spearhead demand due to better connectivity to the well-established commercial corridors of sohna road, DLF Cyber City and Golf Course Extension Road, and will still be a relatively affordable catchment area in Gurgaon.

• Gurgaon, which accounts for 53 per cent of the total office stock in NCR, will witness approximately 13 million sq ft of incremental office space by 2018, which will translate into more than 100,000 jobs, giving it an edge over Noida.

• Delhi will continue to be a favourite among office occupiers; however, with limited scope for new supply, prices in the area will remain unaffordable.

• The lack of a self-sustaining, service-based economic driver, and the industrial tag have slowed the pace of development of the urban centres of Ghaziabad and Faridabad.

Dr Samantak Das, Chief Economist & National Director, Research, said, “Since our first edition in 2012, the residential market in NCR has bottomed out. Our previous recommendations of Dwarka Expressway (sectors 103–113) and Noida Extension in NCR have performed considerably below our expectations in terms of price growth. Infrastructure and real estate project delays, litigations and the overall slowdown in the economy have significantly wedged the growth of these areas. Going forward, we have identified new investment destinations, namely Golf Course Extension Road and New Gurgaon (sectors 81–95), which are likely to hold better investment potential in NCR, benefiting from the foreseeable infrastructure developments and incremental office supply in Gurgaon. These locations are expected to experience a price appreciation in the range of 42 pc to 47 pc till 2020.”

Mudassir Zaidi, National Director- Residential Agency, said, “Real estate industry is cyclical in nature and we anticipate that we are at the end of the cycle of slow down. The wave of positive sentiments is quite evident and the worst will be over soon. Delhi NCR as a market had far larger impact of slowdown due to the fact that a much larger proportion of pure investors are in the market that had deserted the same for want of better returns and thereby, considered alternative assets. The locations we have identified is anticipated to benefit from better connectivity and recovery of the market in tandem with the other markets of India and as a result emerged as potential destinations for investment. Golf Course Extension and New Gurgaon due to better connectivity to the well-established commercial corridors of Golf course road and Sohna Road are expected to see an upsurge in demand due to completion of projects, social and physical infrastructure being established, coupled with incremental office space in the pipeline.”

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