The real estate market at Kundli in the Sonipat District of Haryana holds great future potential owing to several current and proposed developments such as the Kundli-Manesar-Palwal or KMP Expressway
The real estate market at Kundli in the Sonipat District of Haryana holds great future potential owing to several current and proposed developments such as the Kundli-Manesar-Palwal or KMP Expressway, the Rs. 5000 crore Rajiv Gandhi Education City at Sonipat, the 100-metre-wide road from the IGI Airport to Narela, improved rail connectivity (Kundli is proposed to have a metro stop as part of rapid rail transport system), a proposed logistic park, a textile park, etc.
Moreover, Kundli enjoys advantageous proximity to the upper-middle-class residential catchment of North Delhi. Against the backdrop of a landscape that is being increasingly defined by mega education, institutional and industrial projects as well as rapidly enhancing infrastructure, the prospects for the realty market within the Kundli-Sonipat belt remain upbeat.
While the TDI Group, with its land bank of over 1250 acres, remains the premier developer in the Kundli region, others like Parsvnath Developers, Ansal Properties, Omaxe, Parker Group, Raheja Malls, Eldeco County, Anant Raj, Tulip Infrastructure , Collage Group, Eros Group, AJS Builders, Divine Group, Big Jos, Shree Vardhman and Jindal Greens are all present with projects of varying magnitudes in this belt.
So far, the Kundli-Sonipat belt has offered moderate-to-good returns on investment in absolute terms. However, the ROI on real estate is somewhat lower when compared to the appreciation witnessed in other regions of NCR such as Noida and Gurgaon. The average plot price today is in excess of Rs. 25000 per sq. yard; a few years ago, when projects were first being launched there, the price tag for plots was more in the region of Rs. 5000 per sq. yard.
On an average, there has been 30-40% appreciation in apartment rates since 2007-'08, implying that the annual property appreciation rate in the Kundli region has been in the range of 6-10% on an average. Property rates in other regions of NCR such as Noida and Gurgaon have more than doubled in the same period. On the expectation of a boom on the residential market and increased scope for commercial activities in the area, commercial properties at Kundli have witnessed handsome appreciation of more than 50% over the last 3-4 years. The current rates for commercial property in the area are upwards of Rs. 8000/sq.ft. and are likely to maintain growth, albeit at a slow pace.
Coming Down From The High
All said and done, it is evident that the initial euphoria and optimism about the Kundli-Sonipat region is waning. This can essentially be attributed to the extremely slow pace of progress on the many proposed infrastructure projects there. Due to the delay in the growth of the KMP Expressway, the property market in the region has not taken off with the initially anticipated speed. Overall, the region lacks critical mass in terms of population, and it has yet to emerge as a preferred office destination for IT/ITeS organisations. The occupancy level in the existing projects is just around 25% and could even be lower.
Apart from this, basic infrastructure like schools and hospitals are yet to make a convincing appearance in the region. The affordability tag - which used to be a prominent driver for investors who were discouraged by the much higher ticket sizes in other NCR areas - is gradually losing relevance. Prices have reached levels that place all good options beyond the financial appetite of retail investor. That said, the price points at Kundli are still lower when compared with other areas of NCR and do still fall in the affordable range.
From a future investment perspective, this region will essentially continue to remain promising due to its proximity to North Delhi and the Delhi borders. Property investors with constrained budgets can still explore Kundli for its affordable options. If the Government shows renewed commitment towards the proposed infrastructure and development initiatives, the Kundli real estate market can certainly get into higher gear. Investors should maintain an investment horizon of at least 3-5 years in order realize decent ROI, as it will take at least such a period for the region to develop sufficiently.
READ MORE ON India Real Estate, Jones Lang LaSalle, Jones Lang LaSalle India, Retail Commercial Property, Retail India, Retail Properties, Retail Real Estate, Retail Sector India, Retailing India, Kundli, Haryana properties, NCR, Santhosh Kumar, Transforming India
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