VASANT KUNJ INSIGHTS
November 2014
Introduction of the Vasant Kunj Extension could be a game changer in the long run DDA Housing Schemes have been running behind schedule
Vasant Kunj Statistics Located in Zone F, Vasant Kunj is a relatively recent introduction to this zone. Built from the farm lands bought from the adjoining villages the construction on the Vasant Kunj region started in the latter part of 1980s. The region, even today has tracts of land available for construction and under development unlike other parts of South Delhi. Sector A is the oldest part of Vasant Kunj with the largest inhabitation. Some prominent locations of the area include the Promenade, Emporio and the Ambience Malls which are located in close proximity to each other. Aruna Asaf Ali Marg is another prominent land mark in the area with the Fortis Flight Lieutenant Rajan Dhall Hospital, Indian Council for Social Science Research, Indian Institute of Mass Communication etc. The price trends prevailing in Vasant Kunj are relatively lesser than the other older more established regions of Zone F such as Greater Kailash, Defence Colony, Hauz Khas, Saket and so on and ranged above Rs. 1,20,000 per sq yard on an average in the first half of 2014. Like other regions of Delhi NCR Vasant Kunj too saw a fall in its prices from the year 2013 with a weak domestic economy, political uncertainties and a recovering global market. Though with a lot of new construction being introduced in the Vasant Kunj area primarily by the Delhi Development Authority the region is sure to pick up momentum with growing demand in the near term. Being a lot more affordable than its neighboring locations also gives a distinct edge to Vasant Kunj. At the same time with most amenities still to reach its residents in the relatively newer sectors this would remain a priority for to help speed up the pace of absorption of the new inventory.
1,00,000+ Population (in approximate)
11,060
Population per sq. km. (includes south delhi data)
Sector A, B1, B2 Major Residential Areas
DLF Emporio, Ambience Mall DLF Promenade Important Commercial/ Recreational Centre
Quick Bites
2
3
New developments are coming up in the region as unlike other parts of Zone F there are large tracts of land available in Vasant Kunj. DLF Emporio mall in Vasant Kunj is supposed to be one of the most luxurious malls in Asia and has one of the highest rentals in the country. The availability of basic amenities in the newly developed sectors of Vasant Kunj still remains an area of concern.
Sector D, Pocket 4 Mall Road
Prominent Colonies/ Sectors
1
Green Avenue
Park Lane Sector A
ROI Index
(Ideal percentage would bebetween 4 to 5)
Apr’ 2010
33.01 % 17.42 % 8.08 % 26.61 %
*Source: www.magicbricks.com, figures considered from Q1 of calendar year.
Apr’ 2011
Apr’ 2012
Apr’ 2013
2.33%
225
2.00%
1,20,852
1.99%
234
189
(Monthly)
-3.98 %
2.07% 1,09,467
Rental Rates
216
Buying Rates
3.20% 81,000
VALUE VS RENTAL INCOME TRENDS
-5.75 %
1,40,139
Due to the fluctuating market scenarios, changing investor sentiments with the economic ups and downs, rental rates have shown lesser volatility than real estate prices. The annual rental income earned by investors verses the market value of real estate, in a year has remained a little over the 2% mark. Keeping in mind the going averages for other prominent locations of South Delhi 1 such as Vasant Vihar, Greater Kailash, Hauz Khas etc. this percentage is much higher. At the same time prominent locations of Gurgaon, which too are in close proximity to Vasant Kunj, would reveal higher numbers. This can be attributed, to some extent, to the relatively younger development as compared to the more mature locations.
Price Trends
225
Compared to other prominent locations of South Delhi 1, Vasant Kunj has shown lesser volatility in its real estate prices. From a long term investment point of view this is a welcoming sign. A key to the robust demand levels in Vasant Kunj has been its proximity to other regions of South Delhi, the workspaces of Gurgaon and the International Airport. With construction only starting in late 1980s the prevailing prices are also much lower than the neighboring locations such as Vasant Vihar, Hauz Khas and other prominent areas of South Delhi.
A close eye on the correlation study to other industrial and economic indicators showed that the real estate markets of Vasant Kunj have a strong positive correlation with gold prices and lending rates with the IIP numbers at the third place. Keeping in mind the downward projection trend for Gold in the next year, possibilities of static interest rate trends and slight improvement in IIP numbers in this financial year may not act as much pedigree for growth in the next year or two, where as the location should gain momentum in the latter part of mid-term and the longer term. Launch of new inventory and introduction of Vasant Kunj Extension may act as a catalyst in the mid term.
1,35,576
Like other regions of Zone F or commonly known as South Delhi 1 region, Vasant Kunj too saw fall in its real estate prices and demand from the second half of 2013 to 2014 period, due to the prevailing economic and political circumstances. Though being a relatively newer entrant in the zone it has provided investors good returns in years prior to 2013.
2014
Correlation Study
(Shows strongest correlation factors)
The industrial factors are only considered for projections in the short term horizon.
WARM
COLD
2014 - 15 Projection
HOT
GOLD RATES
INTEREST IIP RATES NUMBERS
LUKE WARM
WARM
WARM HOT
SHORT TERM
MID TERM
LONG TERM
0 - 3 YEARS
3 - 7 YEARS
>7 YEARS
New Developements
1
New educational institutions such as AICTE may come up in the region in the near future
2
Development of the Vasant Kunj Extension where one of the largest housing project of the Delhi NCT area is being proposed.
3
There are tentative metro connectivity plans in the 4th phase which should impact price levels.
Upcoming ProjectsÂ
Ganga Appartments
DDA
DDA Housing Scheme
(Old Inventory)
Narmada Appartments
DDA
Happiness Quotient (HQ)
Availability of Recreational Facalities
52% (Zone F-54.5%) Proximity to Work
62% (Zone F-68%) Feeling of Security
66.8% (Zone F-67%) Amenities Available
Social factors to consider
3 4
63.00%
South Delhi (Zone F)
74% (Zone F-61.8%)
1 2
61.90%
Vasant Kunj
A green environment, with the presence of the Aravalli bio-diversity park and ample other open spaces is a highlight of Vasant Kunj. Good market connectivity with some of the best malls / shopping zones in the city help the region score highly in this space and also got a strong mention from the residents of the region. Connectivity- the lack of it is a glaring concern in the locality with the absence of the metro rail, low frequency of public buses and other mediums of commute. The existing population finds it difficult to access public conveyance. Inadequate water supply with most households having access to water once or twice a day is a concern for the region with the zone having one of the lowest ground water levels. Keeping in mind the amount of construction expected to come up in the region this will surely be an area of concern.
The Happiness Quotient of Vasant Kunj is a shade lower than the Zone F averages. Keeping in mind that the locality is relatively new the availability of quality roads, ample commercial work spaces is an area to work towards for Vasant Kunj. This should surely be a focus for the administration. At the same time with a young population Vasant Kunj offers a number of recreational facilities such as high end restaurants, bars and a bio-diversity park. It is hence that the recreational facilities available in the locality score higher than the Zone F average. With large tracts of land, new extensions, proximity to nearby villages, security is a concern keeping in mind the number of crimes registered in the area. Being a part of the Zone F region and also being in close proximity to Gurgaon it is going to be interesting to see the shape Vasant Kunj takes in the coming years. The region should have a rub off from both these zones in the medium & long term.
Amenities Available
07
Malls
10
Prominent Hotels
02 01
Hospitals
Police Station
Game Changers The development of Vasant Kunj Extension with as many as 10,000 flat should be able to house a population of 45 to 50 thousand. This could be a game changer in the longer run as this inventory may be introduced at more reasonable rates than other parts of Zone F. At the same time proximity to Gurgaon would also help attract attention from the zone.
Development of Vasant Kunj in regards to connectivity, availability of water, electricity, proper drainage systems and other related aspects would be a key to drive demand in the area. Vasant Kunj current is found wanting in this space specially in the newly developed colonies and sectors.
The real estate prices in most parts of Delhi NCR have taken a hit in the years 2013 and early part of 2014. This trend has obviously affected Vasant Kunj too. A lift in the market sentiments, price trends of gold and a drop in the interest rates in the near term should have a positive impact on real estate demand in this region.
The Outlook A slow build up in demand can be expected in the near term with a sluggish market and undelivered promises of most newly build DDA complexes. The absence of metro connectivity in Vasant Kunj and lack of other public conveyances has been a deterrent in attracting high demand to the region. The finalization of Delhi Metro’s 4th phase and inclusion of Vasant Kunj would be critical to the growth of real estate in the area, in the mid and long term. Poor quality of societies from the DDA scheme of 2008 & 2010, delayed delivery and lack of basic amenities may keep a large audience away from this location.
New inventories should increase traction levels in the short and mid term.