Multi-crore deals signed; momentum in high-end property picking up post-demonetisation

Just a few weeks before the festive season kicked in this year, Anushka Singh, granddaughter of DLF chairman KP Singh, has acquired a bungalow on Prithviraj Road in the Lutyens Bungalow Zone (LBZ) for Rs 476.50 crore, the highest price for a home in the national capital. That was September and the transaction value of the deal was lower than the property’s cost based on the existing circle rate, which was around Rs 554 crore.

In August, a deal registered in Mumbai, saw a 2,152 sq feet flat on Bhulabhai Desai Road go on the block for Rs 45 crores. The property Ashford Palazzo has been bought by Ranjit Malhotra of Empire Industries. An apartment of the same size in Central London would set the owner back by Rs 60 crore to Rs 80 crore.

Real estate brokers say that momentum in the high-end segment has slowly picked up and there were quite a few deals that happened this Navratras too. In the last three months, as many as four deals have been sealed in Delhi’s tony Jorbagh and Greater Kailash areas – two before the festive season and two after.

A flat of size 2100 sq ft on a 325 sq yard plot was sold for Rs 15 crore and a 2500 sq ft apartment in Greater Kailash I located on a 500 sq yard plot was sold for about Rs 8 crore, say brokers privy to these deals.

In these posh colonies, where the total number of plots is limited to around 150 to 200, even if two out of four flats from the total inventory are sold, it’s almost half the inventory sold, says Rohit Chopra of SanD Advisory Pvt Ltd who has helped strike many such deals.

Post demonetization many collaboration agreements (between the plot owner and flat builders) that were stuck in these localities are also slowly picking up, say, brokers. In the last three months, as many as 50 to 60 such collaboration deals have been entered into in these posh localities, says a real estate broker. This segment has picked up of late also because many of these properties are located on plots that are less than 600 sq yards. Plots that are lesser than this area or properties with eight kitchens will fall under the ambit of RERA, those less than 600 sq yards do not, he says.

In the next 15 months, a ready stock of as many as 100 apartments is likely to come up in these localities, giving a boost to this market.

Considering that the average price of these units is likely to be in the range of Rs 6 to Rs 7 crore, inventory worth Rs 700 crore is expected to come up in these markets going forward, says Chopra.

However, some colonies such as Friends Colony and Panchsheel Park, the number of transactions are less, as these areas have a peculiar problem – the circle rate in these areas is much higher than the market rate of properties.

Source: Moneycontrol.com