Low prices
Faridabad’s newly demarcated sectors (67 to 90, shown in the map
in yellow) meet the first criteria for all good investments: prices
are attractively low.
Says Kabul Chawla, MD of Business Park Town Planners, the
developer that owns nearly 1,500 acres in the newly demarcated
sectors: “At Rs 10,000-12,000 per sq yd, the price of land in these
sectors is one-fifth that in Gurgaon, one-sixth that in Noida, and
half that in Greater Noida. There is ample scope for appreciation.”
The price differential is even starker when compared to New
Friends Colony, where the current rate is about Rs 1.5 lakh per sq
yd. “A ten-time price differential between two places barely 12 km
from each other is bound to be corrected,” says Chawla.
Connectivity woes
So what’s keeping prices in the new sectors low? One,
land was allocated in these new sectors to private developers only
recently, and the latter have only just begun to develop them. Two,
connectivity between Delhi and Faridabad remains a hurdle. Mathura
Road is perpetually choked with traffic. The bottleneck at Badarpur
Border traffic signal means that the commute from Ashram Chowk to
Faridabad, which should take not more than 25 minutes, can stretch
to over an hour.
A number of expressways and flyovers are on the drawing board,
which, if executed, will take care of the connectivity problem.
RITES will build a three-kilometre-long flyover at Badarpur Border.
Says Chawla of BPTP: “Work on the flyover is expected to begin in
two-three months.”
To decongest Mathura Road and provide a bypass (for traffic to
circumvent Faridabad), a new highway is planned which will begin at
Kalindi Kunj and run parallel to the Agra Canal. The highway will
turn left at Atmapur, run along the periphery of the newly
demarcated sectors, and finally merge with Mathura Road (NH-2) on
the other side of Faridabad.
Another expressway on the drawing border is Taj Expressway. Once
completed, it will reduce the distance between the new sectors and
Greater Noida and Noida. Secondary market prices in Sector 93A,
Noida, today range from Rs 3,500-4,000 per sq ft, while around Pari
Chowk in Greater Noida rates are around Rs 2,500-2,600 per sq ft.
Once travel time to Greater Noida and Noida falls, prices in the
newly demarcated sectors are expected to inch up closer to these
rates.
In addition, a new expressway, the Eastern Peripheral Expressway,
is planned which will run from Manesar to Palwal and then to Kundli.
Together with the Western Peripheral highway, it will serve as an
outer Ring Road for the NCR, make travelling to different parts of
the NCR faster and trouble-free.
Once all these expressways are constructed, expect prices in the
newly demarcated sectors to rise in tandem with the fall in travel
time. The risk to the investor comes primarily from delays, which
could postpone the day when prices appreciate and he can book
profits.
Office developments
Just as a ten-fold price differential exists in the residential
sector, a huge differential also exists between prices in Jasola,
where a number of commercial complexes are coming up, and in
Faridabad. In Jasola, the going rate in office buildings is Rs
12,000-14,000 per sq ft.
So far Faridabad was an industrial town. Unlike Gurgaon
or Noida, it’s not an IT-ITES hub. Now, Vatika, Paharpur and Piyush
group are setting up office complexes here. Since rates in Faridabad
are nearly one-third to one-fourth of those in Jasola, corporates
could move to Faridabad once the traffic situation improves.
Investor-driven market
A number of developers are developing projects in Faridabad’s new
sectors: BPTP, Omaxe, RPS, California City, KST, SRS, Triveni, and
Shiv Sai Infrastructure. Some like RPS have got the licence. Others
have a letter of intent (LoI), and some might not even own the land
they are hawking in pre-launch sales. Investors, therefore, needs to
be cautious.
According to Mishra of Sainik Estates: “Investors predominate in
this market. With the second instalment to builders becoming due,
many investors are looking to exit, hence the widening gap between
primary (company) and secondary market rates.” While company rates
for built-up property range from Rs 1,900-2,200 per sq ft, the
secondary market rate is only Rs 1,400-1,600 per sq ft. In case of
plots, company rates range from Rs 12,500-13,500 per sq yd, while
secondary market rates range from Rs 9,000-10,000 per sq yd.”
Provided you have enough cash to pay the premium and the margin (15
per cent, on the home loan), you can avail of bargains in the
secondary market.
Finally, the risk in the newly demarcated sectors is to
short-term investor who lack staying power. The area offers a good
investment opportunity to long-term investors, say, those with a
time horizon of three years, since by then many of the expressways
projects should get completed.
‘Prices lowest in NCR’
Kabul Chawla, MD, Business Park Town Planners
On prices
Prices in Faridabad are one-fifth of Gurgaon,
one-sixth of Noida, half of Greater Noida, and one-tenth of south
Delhi. There’s much scope for appreciation.
On new focus area
Earlier, Gurgaon and Noida were the
focus areas. Now those markets are sold out. The focus has shifted
to the new sectors of Faridabad.
On future plans
We will develop a 20 lakh sq ft mall in
Sector 80, one of the largest in the NCR. We will also develop
office space.
‘Connectivity will improve’
Rohit Malhotra, CEO, Realtech Group
On connectivity
Connectivity will improve once the
three-kilometre flyover at Badarpur Border is completed and NH-2 is
six-laned.
On new developments
The land between Faridabad and
Gurgaon on the Aravali range will be developed by the
Gurgaon-Faridabad Leisure Development Authority.
On nature of township
With 15,000 industries employing
5 lakh workers, Faridabad generates 60 per cent of Haryana’s
revenues. Now, private developers are coming up with residential
developments.
‘Lot of scope for appreciation’
Pradeep Mishra, Sainik Estates
On appreciation
Rates in established sectors are
stable. More scope for appreciation exists in the new sectors, where
prices are low, and there is scope for appreciation.
On prime sectors
Sectors 88 and 89 are prime as they
are close to two highways Kalindi Kunj highway and Taj expressway.
On the market
At present investors predominate. A
substantial gap exists between rates in the primary and secondary
market. Prices will move up once builders begin construction.
