Of late, Surajkund has been hyped as an attractive real estate destination on the Delhi NCR map. Property prices here have been on the rise, inviting the attention of end-users and investors alike. Though there was very limited new residential supply in this area in the past, this market has been looking up with several residential projects in the pipeline across varied budget categories. Surajkund holds good long-term investment prospects from the perspective of real estate capital appreciation, especially in the affordable housing segment. However, does it have the potential to emerge as an alternative destination to south Delhi?
The true picture
Surajkund is a part of Faridabad, which is primarily an industrial town with minimal corporate activity. The manufacturing sector, which has been the main driver of the economy here, is currently also under tremendous stress. In other words, there is no other major growth driver for the region. The limited availability of better employment opportunities has resulted in only a relatively small proportion of middle and upper-middle class home buyers choosing Surajkund as a residential destination. The number of HNIs (high net-worth Individuals) hailing from the industrial sector and the Faridabad region’s more affluent families is also not significant. Given the absence of alternative growth drivers, this residential market, however upbeat it may be, will witness only limited growth for now.
Currently, luxury projects like Charmwood by Eros and Omaxe Forest by Omaxe - the only projects of their kind in the region - have seen massive appreciation, and their investment potential in terms of further appreciation has peaked. In fact, Surajkund is slowly losing its affordability tag due to the escalating prices, with overall scope of appreciation diminishing concurrently.
Budget-conscious investors will be more interested in other locations such as the Neharpar region (Sector 80 Faridabad and beyond) as the ticket sizes there are smaller, availability of affordable homes is higher and the prospects of returns on investment more encouraging. Also, civic facilities such as water, electricity and physical infrastructure are way below the baseline requirements of a promising growth corridor.
What works for Surajkund
There are definitely some factors that work for Surajkund, such as its abundant green cover and an undoubted location advantage. Surajkund does have the benefit of proximity to south Delhi, with Greater Kailash being a mere 15-20 minutes’ drive away. Also, it is well connected with Gurgaon via the Gurgaon-Faridabad road. The Mehrauli-Badarpur road further enhances its connectiv
ity with other NCR regions. Surajkund also has some good hospitals, malls and attractive hotels.
Surajkund has benefited from the fact that real estate in south Delhi and in other NCR regions such as Gurgaon comes at significantly high premiums.
This puts these prime areas beyond the financial appetite of many end-users and investors. Surajkund still has many affordable options to offer, which is why many middle class end-users and investors have shown interest in this region.
No comparison with south Delhi
One must keep in mind that unlike Gurgaon and pockets of south Delhi, its connectivity to the airport and the general lack of public transportation remain challenges
This means that Surajkund, despite its location advantage, is unlikely to emerge as an alternative to south Delhi for homebuyers.
South Delhi and Surajkund are two very different markets when we speak of available options as well as the kind of interest they are evoking. Only investors and end-users with limited financial appetite are considering Surajkund.
Not surprisingly, the price-gap between Surajkund and south Delhi is quite significant. On an average, rates in Surajkund are less than one-third of those in south Delhi.
Currently, a premium residential project in Surajkund commands a price in the range of R10000 to R12000 per sq ft, while a comparable property in south Delhi costs in excess of R30000 per sq ft. There is no likelihood of this gap narrowing significantly in the coming years.
(The writer is CEO - Operations, Jones Lang LaSalle India)