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Lutyens Bungalow Zone: Four dozen properties up for sale; steep discounts on offer for non-performing assets held with lenders

Buyers comprise people who have been in the market for several months and are waiting to drive a hard bargain during the pandemic

It's something Edwin Lutyens probably never imagined would come to pass when he drew up the blueprints for his namesake-bungalows in the new capital of British India. As many as 48 properties in one of New Delhi's smartest addresses are up for grabs as the Covid-19 pandemic takes a bite out of the real estate market.

While there have been no major deals post-COVID-19 in Central Delhi’s leafy Lutyens Bungalow Zone, these properties are up for sale with discounts varying from 7 to 15 percent, depending on the seller's appetite or capacity to hold on. However, for bungalows that are non-performing assets (NPAs) and in possession of lenders the discounts are even steeper.

Real estate experts hope that this festive season, a few deals may finally see fruition as many buyers on the lookout for deals are waiting in the wings. So, if it’s the address you have been aspiring for and have the big bucks, this may just be the right time to jump in.

In these unprecedented times, there are close to four dozen properties that are up for sale in these areas from prices ranging from a relatively measly Rs 75 crore to over a whopping Rs 400 crore, depending on the plot size and location.

Yes Bank was in the news recently for having put a bungalow located on Bhagwan Das Road on sale with a reserve price of Rs 430 crore following a default by the Essel Group-promoted RPW Projects Private Limited. The house had been acquired by the Subhash Chandra promoted-Essel Group for Rs 304 crore almost five years ago.


The possession of the property was taken on June 15, 2020 under the SARFAESI Act, 2002.

It  will “be sold by way of e-auction on "As Is Where Is”, “As Is What is”, “Whatever There is” and “No Recourse” basis on November 10, 2020 (between 2 p.m. to 3 p.m.) for recovery of Rs. 943,48,97,689 (Rupees Nine Hundred Forty Three Crore Forty Eight Lakh Ninety Seven Thousand Six Hundred and Eighty Nine Only) as on December 20, 2019 together with further interest, costs, charges and expenses thereon with effect from December 21, 2019 due to the Secured Creditor from RPW Projects Private Limited (“Borrower”) and Greatway Estates Private Limited (“Mortgagor”),” the notice said.

In Central Delhi, properties include independent houses spread across 375 yards, 575 sq yards and 1250 sq yards in Jor Bagh, independent houses in Golf Links almost of similar sizes and an independent house plot in Sunder Nagar on a plot of 867 yards. In Malcha Marg or Rajdoot Marg, there are independent house plots ranging from 375 yards to 720 yards.

Also Read: COVID-19 impact: Ultra-rich want a second home but not too far from their city

A host of independent houses are available in areas such as S P Marg, Kautilya Marg, Tees January Marg, Prithviraj Road, Dr APJ Abdul Kalam Road (formerly Aurangzeb Road), Amrita Sher Gill Marg, K.G. Marg, Barakhamba Road, Firoz Shah Road, Hailey Road, Sikandra Road among others.

Property consultants are of the view that the discount for these properties could at best be in the range of 7 to 15 percent depending on the sellers’ appetite to hold on to the property.

Preferred address but paucity of clear title supply

While there may be quite a few properties on sale in these areas, title complexities persist and demand may not necessarily translate into a large number of closures.

Pre-Covid, there were more sellers in the market and few buyers. Today, while some sellers have decided to hold on, the number of buyers scouting for discounts has gone up.

Also Read: Coronavirus impact: Demand for luxury homes may feel the heat; prices may correct by 15-20 percent

“Central Delhi and Lutyens Bungalow Zone as addresses remain coveted and whilst overall the supply pool is large, it is important to note that the supply is spread across sizes beginning from 375 sq yards and therefore the total count is staggering. The core Lutyens Bungalow Zone locations such as Amrita Shergil, Prithviraj Road and Dr APJ Abdul Kalam Road known as billionaires’ row still have paucity of clear title supply and they remain preferred as final addresses for top ultra HNI families of India,” said Shveta Jain, managing director, Residential Services, Delhi NCR.

“Post-COVID, demand has been triggered on the perception that owners would be willing to bring the prices down,  which is a great proposition for an end-user as even a single digital percentage discount in absolute terms is a big saving for an aspirational buyer. The cost of purchase, such as stamp duty and registration charges, are also reduced consequently," she added.

Also Read: Real estate firms chase buyers with innovative schemes this festive season to beat COVID-19 blues

However, while from a demand perspective these high-end locations always defy market fundamentals, given the title complexities, it may not always translate into a higher number of closures, Jain said.

Still, several transactions have been closed in the range of Rs 5 to Rs 20 crore – primarily ready flats in the premium segment.

The discounts on offer, too, are anything in the range of 7 percent to 15 percent, say local brokers.

So, what’s the buyer profile like? For properties in the range of Rs 7 crore to Rs 15 crore, buyers are primarily industrialists, traders, lawyers, senior corporate executives. Properties located in the Lutyens Zone and priced at Rs 45 crore to Rs 70 crore are generally sought by senior professionals or executives. As for properties in the range of Rs 100 crore and upwards, only industrialists are the main takers.

The number of deals is this market is not going to change any time soon after the pandemic as there are too many complexities related to supply itself. While the buyers are always there, it's always a case of more buyers and less supply because while the price of the asset may be high, there may not be sufficient built-up area, say consultants, adding the pattern of the number of deals in this segment is also not going to change despite the discounts. Also, most of these buyers are not new and have been in the market for the last couple of years trying to get the best deal.

How have the prices stacked up?

For those who are not aware, there Lutyens’ Zone is in the heart of the capital and is an exclusive ‘zone’ spread across nearly 19.1 sq km. Since this is a heritage zone, there are strict height, floor-area-ratio and reconstruction norms. This is primarily to protect the low skyline. Also, what it means is that even though the plot size may be big, the developed or built-up area could be much less.

There is also little scope for redevelopment potential due to LBZ norms. There are around 3,000 bungalows in the area. The number of privately-held bungalows and homes in LBZ is around 500.

Right now transactions are also few as buyers find it difficult to justify the land value. While these areas certainly offer the luxury of an address, they do not provide the luxury of space.

Most of the private plots in the area are a great address, but if you assess the value per sq ft and compare it with the built-up area, you will realise that you may be paying a humongous amount, but getting a small bungalow compared to locations such as Sunder Nagar or Jor Bagh where there is much more scope for redevelopment, says a property broker.

“In the Lutyens Bungalow Zone, there is a discrepancy in the built-up area versus the plot size on offer. You barely get any Floor Area Ratio (FAR) and therefore some of these areas are losing their charm and prices are getting corrected,” he says.

Another big challenge in these areas is that the majority of ownerships are inherited and there are very few ‘sorted titles’  Hence, one is not likely to see too much supply coming in at one go.

This area can best be compared to Mumbai’s St Michael Road, Worli Sea Face or Altamount Road, where the supply is not only limited but in some cases is governed by coastal regulation zone (CRZ) norms.

In Mumbai, however, the interest for bungalows has strangely reduced on account of the pandemic because people are preferring to move out of the city to locations with less density and are focusing on second homes.

Several families are lapping up properties in Alibaug and Goa as Mumbai has very few open spaces. The demand for such second homes has gone up after the pandemic. In fact, prices of these properties have gone up by almost 10-15 percent after COVID-19.

“Instead of bungalows, people are preferring to shift to high-end apartments within the city and also investing in lifestyle second homes,” says Ritesh Mehta, senior director and head of residential services (development initiatives) at JLL India.

Second homes, especially ready-to-move-in bungalows in Lonavla, Alibaug and Goa are typically in the range Rs 7 crore to Rs 50 crore. There is also a spurt in leasing of such properties. Most of these are available on rent for Rs 5 lakh per month and upwards and the size of these bungalows is anything between 3,500 sq ft to 30,000 sq ft.

Rohit Chopra of says that while some deals are available in areas such as Golf Links where prices being quoted are over Rs 80 crore, and in Amrita Shergill Marg for Rs 210 crore, discounts in the range of 5 to 10 percent are not on account of COVID-19 but are part of normal negotiations.

“Most of the sellers in these areas are original allottees who are in their late 70s and want to sell the properties within their lifetime for succession planning. Further, being original allottees, they don't have any stress or any lien. So, they may decide to sell only if the price is motivating enough,” he says.
Vandana Ramnani

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