Buyers guide to properties in Gurgaon
In December 2011, I was in Gurgaon to invest in its real estate market. I had visited the region after 6 years. The pace of the new developments there and people's attitude in the growing consumerist culture absolutely amazed me. It cemented my belief in investing in India, particularly in Gurgaon.
Note that our budget was in the 75 lacs-1 cr range for a 3 bedroom apartment. Also, our investment horizon was up to 5 years. For that budget and time, following sectors looked reasonable: 103-109, 77-91, and sector 61 (golf course extension). Take a look at the following 2025 master plan of development in Gurgaon to locate those sectors.
Let me now compare those locations based on three key decision-making parameters:
1) Location,
2) Builders, and
3) Price.
1) Location: In Gurgaon, good location is dependent on proximity to the following: a) NH8, b) Dwarka-Expressway, c) City Center (sectors 29-49 in the map)
Based on those attributes, Sectors 77-91 appeared to be clear winners. Here's why.
a) NH8: The new Gurgaon City, ie sectors 29-71, developed around NH8. Thus, there is a good chance that future development will continue along NH8 and consequently around sectors 71-91. These sectors are easily accessible via NH8 from the city center. Most sites already have well developed sectors roads. Also, they have close proximity to Manesar and surrounding Reliance SEZ. And, the anticipated Expressway will serve most of these sectors.
Based on those calculations, my hypothesis was that these sectors will continue to develop at a much faster rate than the other sectors - 103-109 or 61. From appreciation and rentability standpoint, these sectors were clear winners.
b) Dwarka-Expressway: Dwarka-Expressway may be completed in the next year or so - most developments in sector 103-109 are based on that. However, currently, those sectors have poor commute. There are only rural roads that connect the city center to those sectors. Moreover, there are no sector roads that connect different areas within those sectors. As a result, my analysis was that those sectors will take a long time to develop and thus will likely have slow rate of appreciation. Here's the caveat though: If you are willing to wait long (~10 years), the appreciation may be great since these sectors are closer to the IGI airport and the anticipated Diplomatic Enclave near Dwarka. But from the 5 years investment horizon, we chose to steer clear of these sectors.
2) Builders: I checked the following builders: Ansals, ATS, Bestech, Chintals, DLF, Rahejas, and Spaze. Here's my analysis on each of them.
a) Ansals: Ansals were good at some point, but they continue to maintain the old school development philosophy. As a result, their new constructions are not contemporary. They have a value proposition in Kundli, but certainly not in Gurgaon.
b) ATS: They are well reputed builders from Noida, however, they have no track record in Gurgaon. They have couple of properties under construction in sectors 109 (Kocoon) and 104. Sector 104 was in the pre-booking stage - too early to make reasonale assessment. For its location, I found Kocoon to be over priced. Most importantly, they have a joint venture with Chintals that raised red flags. Here's why: i) Chintals are land grabbers and not really real-estate developers, ii) In a JV such as this, if there's a fall-out between the two partners, consumers/buyers will be most hit, iii) Moreover, they were not ready to hand us the agreement. Also, there was this strange arrangement where we pay them but get ownership of the property from ATS. As a result 104 and 109 were thrown out of the window.
c) Bestech had the best customer service and good location to invest at. The sales guys were gracious, forthcoming, accommodating, and knowledgeable. We ended up buying an apt. in their new development - Ananda, in sector 81. It was a good compromise between affordability, location, accessibility to the city center, and rentability.
d) Chintals, as noted previously came across as thugs. They were not transparent about their dealings and JV with Ansals. I dropped them like hot potatoes.
e) DLF was out of my budget. Reputed builders of course, but they have been known to cause delays in their projects. Similar to Ansals, they also belong to the old school of thought.
f) Rahejas - They have some of the most ambitious developments. Revanta with 53 storeys and a halipad on the roof tops it all. However, they are relatively new builders in the area. Also, since I found out that they are not the same "Rahejas" as the more reputed "Rahejas" in Mumbai, I decided against them. Also because I felt they were trying to play it off the more reputable Rahejas.
g) Spaze: Their residential property in Sector 84 is a prime location. However, much like Chintals, they came across as unprofessional with a low regard for buyers. Worse, most of their sales force came across as newbies, which was a deal breaker for me.
Note that our budget was in the 75 lacs-1 cr range for a 3 bedroom apartment. Also, our investment horizon was up to 5 years. For that budget and time, following sectors looked reasonable: 103-109, 77-91, and sector 61 (golf course extension). Take a look at the following 2025 master plan of development in Gurgaon to locate those sectors.
Let me now compare those locations based on three key decision-making parameters:
1) Location,
2) Builders, and
3) Price.
1) Location: In Gurgaon, good location is dependent on proximity to the following: a) NH8, b) Dwarka-Expressway, c) City Center (sectors 29-49 in the map)
Based on those attributes, Sectors 77-91 appeared to be clear winners. Here's why.
a) NH8: The new Gurgaon City, ie sectors 29-71, developed around NH8. Thus, there is a good chance that future development will continue along NH8 and consequently around sectors 71-91. These sectors are easily accessible via NH8 from the city center. Most sites already have well developed sectors roads. Also, they have close proximity to Manesar and surrounding Reliance SEZ. And, the anticipated Expressway will serve most of these sectors.
Based on those calculations, my hypothesis was that these sectors will continue to develop at a much faster rate than the other sectors - 103-109 or 61. From appreciation and rentability standpoint, these sectors were clear winners.
b) Dwarka-Expressway: Dwarka-Expressway may be completed in the next year or so - most developments in sector 103-109 are based on that. However, currently, those sectors have poor commute. There are only rural roads that connect the city center to those sectors. Moreover, there are no sector roads that connect different areas within those sectors. As a result, my analysis was that those sectors will take a long time to develop and thus will likely have slow rate of appreciation. Here's the caveat though: If you are willing to wait long (~10 years), the appreciation may be great since these sectors are closer to the IGI airport and the anticipated Diplomatic Enclave near Dwarka. But from the 5 years investment horizon, we chose to steer clear of these sectors.
2) Builders: I checked the following builders: Ansals, ATS, Bestech, Chintals, DLF, Rahejas, and Spaze. Here's my analysis on each of them.
a) Ansals: Ansals were good at some point, but they continue to maintain the old school development philosophy. As a result, their new constructions are not contemporary. They have a value proposition in Kundli, but certainly not in Gurgaon.
b) ATS: They are well reputed builders from Noida, however, they have no track record in Gurgaon. They have couple of properties under construction in sectors 109 (Kocoon) and 104. Sector 104 was in the pre-booking stage - too early to make reasonale assessment. For its location, I found Kocoon to be over priced. Most importantly, they have a joint venture with Chintals that raised red flags. Here's why: i) Chintals are land grabbers and not really real-estate developers, ii) In a JV such as this, if there's a fall-out between the two partners, consumers/buyers will be most hit, iii) Moreover, they were not ready to hand us the agreement. Also, there was this strange arrangement where we pay them but get ownership of the property from ATS. As a result 104 and 109 were thrown out of the window.
c) Bestech had the best customer service and good location to invest at. The sales guys were gracious, forthcoming, accommodating, and knowledgeable. We ended up buying an apt. in their new development - Ananda, in sector 81. It was a good compromise between affordability, location, accessibility to the city center, and rentability.
d) Chintals, as noted previously came across as thugs. They were not transparent about their dealings and JV with Ansals. I dropped them like hot potatoes.
e) DLF was out of my budget. Reputed builders of course, but they have been known to cause delays in their projects. Similar to Ansals, they also belong to the old school of thought.
f) Rahejas - They have some of the most ambitious developments. Revanta with 53 storeys and a halipad on the roof tops it all. However, they are relatively new builders in the area. Also, since I found out that they are not the same "Rahejas" as the more reputed "Rahejas" in Mumbai, I decided against them. Also because I felt they were trying to play it off the more reputable Rahejas.
g) Spaze: Their residential property in Sector 84 is a prime location. However, much like Chintals, they came across as unprofessional with a low regard for buyers. Worse, most of their sales force came across as newbies, which was a deal breaker for me.
posted by Amar @ 1:49 PM
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