Advancing properties and enhancing localities.
Gurgaon Witnesses Realty Investments Worth $1 b
Cosmopolitan status helps it attract major deals and investments; sales are double of that of 2015
Investors across real estate segments -residential, commercial and land -are rushing into Gurgaon, which saw large sales across financing and land acquisitions in excess of $1 billion, double that of 2015. Last year, Gurgaon market attracted around $500 million in investments as investors were in a wait-andwatch mode towards outlook and an expected recovery.
Land accounted for 42.55% of the total investment pie, followed by residential assets at 42.1%, though a bulk of it is through refinance, and core assets or rented office property bringing up the rear at 15.3%, estimates CBRE South Asia.
"Owing to its cosmopolitan status and conducive environment, Gurgaon continues to evince active interest from real estate funds, local and international developers as well as corporates. It has always been the investment gateway to NCR due to its critical mass in real estate development and existing social infrastructure,“ said Gaurav Kumar, managing director of capital markets at CBRE South Asia.
Gurgaon commands a lion's share of office leasing in the NCR region driving significant institutional interest as well as investment commitments to capture the growth wave of increasing lease rents and high sale prices.
Some of the large transaction in Gurgaon includes M3M acquiring 180 acres of land from Sahara Group for $180 million for a residential project. Tata Realty and Infrastructure acquired a 25-acre IT SEZ zoned land parcel from M3M abutting Sector 58 near Golf Course Extension for $60 million.Additionally, RMZQIA purchased a 7,30,000 sq ft IT Park from BPTP located along the Delhi-Gurgaon expressway in Udyog Vihar for $180 million.
"Gurgaon is the potential market for office spaces in north India and assumes a prominent position in RMZ acquisition strategy. We have already acquired a marquee asset from BPTP which we have christened RMZ Infinity, Gurgaon. We are exploring both greenfield and brownfield developments as a way of expanding our presence in north India, which we hope to take up to at least 5 million sq ft over the next three years in this Gurgaon micro market of NCR," said Arshdeep Sethi, MD -Development of RMZ Corp.
"We foresee constraints on new office supply side in the future, opening up tremendous opportunities to capture significant market share. Even valuations in the recent couple of years, especially in residential, have been depressed. This, combined with the limited number of office players in the market, provides growth opportunities in terms of returns and market share," he said.
Prominent funds like Piramal Fund Advisors, Xander, JP Morgan, Altico Cpaital, GIC and Blackstone have either invested or are evaluating opportunities in Gurgaon.“We will look at last mile financing for projects in advanced stages of construction and sales. We will also evaluate and fund projects wherein credible corporate houses such as Godrej have tied up, under joint development arrangements, with existing land owners and developers to market and construct projects under their corporate brands,“ said Sanjay Grewal, CEO for Altico Capital.
The fund recently invested `50-crore transaction with Noida-based Lotus Greens Group for a residential project.
It had earlier invested 450 crore for a Sports City project with the builder.
The city also has a couple of million dollar transactions in the pipeline with DLF's rental portfolio of office assets alone estimated to attract over $1-1.3 billion for a 40% stake sale. Ascendas-Singbridge, a leading sustainable urban and business space solutions provider, has also recently announced an investment of $400 million to develop an IT office SEZ in Gurgaon.
"Gurgaon is the focal point of economic growth in NCR and the second-largest office market in India with significant investments made by large MNCs. With over two decades of experience in India, we will bring our best practices to ITPG and provide best-in-class business space and asset management services in Gurgaon," said Sanjay Dutt, CEO -India Operations at Ascendas-Singbridge.
Renewed interest from institutional investors has also prompted builders such as Vatika, Tata Realty, Hines and M3M to join hands with strong institutional investors to actively acquire strategic land positions within emerging areas of Gurgaon; a clear indicator of long-term dividends from such investments.