Unlocking Delhi’s land potential
The Delhi opportunity means improved quality of life for its residents and affordability through the Master Plan’s vision of integrated sub cities. The Capital’s land supply is likely to be launched at R4,000 per sq ft to R5,500 per sq ft in some of the new zonesrealestate Updated: Mar 13, 2013 12:10 IST
The Master Plan 2021 envisages creation of five new sub-cities within Delhi, bigger than Dwarka and Rohini and with almost 60,000 hectares to be unlocked for development or redevelopment. This includes areas in the green belt, existing unauthorised colonies and various farmhouse developments in south Delhi.
The Gurgaon-Noida story was based on the premise of lack of availability of land in Delhi. Absolute shortage of land in Delhi forced people to look for options in the periphery. The new Master Plan is likely to change all that. What one knows as NCR (National Capital Region) could soon be redefined as the NCT (National Capital Territory).
For the uninitiated, the National Capital Territory of Delhi is divided into 15 zones as per the new Master Plan. Out of these, A to H, P, M and K1 are in urban Delhi and J, K2, L, N and P2 fall in what is known as urban extension. Also, with the population expected to rise to 2.36 crore by the end of this decade and the projected housing demand pegged at more than 2 lakh dwelling units a year (a requirement that government authorities may not be able to fulfill), the new plan seeks to focus on public-private partnerships and has a provision that provides for entry of private developers in the acquisition and development of ‘new’ Delhi land.
“We require 15 lakh dwelling units by 2020. The government does not have the capacity or the wherewithal to accomplish this task. Hence, the need for the private sector to step in,” points out AK Jain, former Delhi Development Authority (DDA) planning commissioner.
Interestingly, several leading private developers have already begun acquiring land in some of these new zones. Private equity funds are also eyeing these new opportunities being made available in Delhi.
The challenges - what needs to be done
If implemented well, the Master Plan could turn out to be the biggest real estate opportunity of recent times. However, the challenge, say realty experts here, is how soon the government facilitates the participation of the private sector through clearances and level playing fields.
The impact- rationalisation in prices
Real estate experts are of the view that the new residential opportunities that the new Master Plan offers is likely to lead to rationalisation of residential prices in the surrounding areas.
Delhi will throw up the largest supply of housing at all price points in the R10 lakh and over R1 crore price band due to the advantage associated with buying land cheap today. Developers and investors who buy land now can afford to profitably provide supply in this price band.
Delhi will compete with areas such as Gurgaon and Noida. The largest demand lies in the mid- and affordable housing segment. This is because of favourable land pricing. The surrounding markets are creating low-cost/affordable housing projects almost 60-80 km away from the CBD areas of Delhi, with low infrastructure and transportation connect. The Delhi opportunity would improve quality of life and affordability through the MPD vision of integrated sub cities.
If one were to analyse the current real estate market scenario, one will find that while Gurgaon’s and Noida’s residential prices have shot up, the huge land supply in Delhi may see projects being launched at R4,000 to R5,500 per sq ft in some of these new zones due to tough competition.
There are two urabn express roads that will connect these new zones with the existing urbanised area of Delhi. The first UER1 will originate at NH1 and terminate at NH8. UER2 is a 100 m road originating on NH1 and cutting through NH10, NH8. It will go up to NH2 and be the lifeline of all these new zones. This road has already been tendered and construction has started. It would be what the Noida-Greater Noida Expressway is for the eastern suburbs. Once the 100 meter UER2 is ready, getting to Rohini would just mean a 20-minute drive from the airport and South Delhi. The two UERs should are likely to be completed before 2016.
MPD 2021 has a provision for the cluster block approach wherein existing plot owners can pool in their individual properties and redevelop them into apartments with better amenities and greater FAR.
For the uninitiated, the MPD has provisions to encourage redevelopment through private participation – to redevelop either single units or through amalgamation. It also calls for voluntary participative development in the rural areas. The cluster block approach allows existing plot owners to pool in their properties to arrive at the magic number of 3000 sq m, the minimum requirement as far as the size of the plot is concerned. Likewise, for tapping into the land in the villages, unauthorised colonies and resettlement colonies, the MPD envisages a policy for 2000 sq m.
The Master Plan also seeks to incentivise the redevelopment process. “To incentivise and redevelop, a maximum overall FAR of 50% over and above the existing permissible FAR on individual plots will be allowed – subject to a maximum of 400. Higher FAR shall not be permissible in redevelopment of Lutyens bungalow zone, Civil Lines bungalow areas and monument regulated zone,” it says.
The beneficiary would be the end-user who would get products at the ideal price points, while the developer would benefit from faster cash flows. The land owner benefits from capital appreciation of his land assets. Overall, it’s a win-win situation for all.
As per the scheme, redevelopment and renewal is to be identified on the basis of the presence of physical features such as the Metro, roads, drains, high-tension lines and control zones such as monuments and heritage areas. In short, this means that there should be adequate provision of infrastructure and the area to be redeveloped should not be located close to a heritage site.
As per the MPD, the government’s redevelopment efforts are targeted at unauthorised, resettlement and rehabilitation colonies but are more likely to happen in areas where large contiguous plots are available, places which may allow for easy aggregation of 3000 sq m land parcels. The state government has initiated the process of regularisation for 895 illegal colonies in September last year at one go. The state cabinet gave in-principle approval this month to regularise 205 unauthorised colonies that had come up on ASI and forest land over the years in the city.
For regularisation, infrastructure has to be extended to these colonies and certain lands would also have to be ceded to facilitate infrastructure.
The new green belt
MPD 2021 envisages a number of changes related to the location (in the green belt) and construction of such types of properties. Out of the 15 zones, A to H, P, M and K1 are in urban Delhi and J, K2, L, N and P2 fall in ‘urbanisable’ area or urban extension. The document stipulates that land up to the depth of one peripheral village revenue boundary along the border of NCT would be maintained as green belt. New farmhouses will only be allowed in this green belt.