Dwarka Expressway, conceptualised to connect Dwarka in Delhi with Gurgaon and Manesar intercepting at NH 48 has now emerged as one of the main residential hubs in the National Capital Region. Along the stretch, the main clusters in New Gurgaon are Sectors 102 to 113 and Sectors 76 to 95 & 95A. These residential sectors in New Gurgaon and Dwarka Expressway have been planned as prominent residential hubs. Both investors and end-users prefer these for investments and purchase, respectively.
Several reputed developers such as DLF, Vatika, Sobha, Emaar, Experion Developers, ATS, Godrej, Chintels, Adani, Shapoorji Pallonji, Bestech have their projects launched or completed in the area. However, these micro-markets have not developed at the speed at which it was envisaged, as the liveability conditions could not pace up with the requirements of the residents.
The state of supply
According to JLL Research, residential unit launches steadily grew from 11,067 units in 2010 to 21,303 units in 2012, before declining steadily post that. The number of new launches in 2016 was only 1,652 and it fell to a mere 598 in 2017. While it increased to 3,401 in 2018, it has again fallen to 1,159 in the first nine months of 2019.
Launches in New Gurgaon and Dwarka Expressway as a proportion of launches in Gurgaon was at a high of 87 per cent in 2012, declining to a low of 26 per cent in 2015 and 29 per cent in 2017. In 2019 from January to September, it stands at only 26 per cent, down from 59 per cent in 2018.
Why it did not achieve the desired outcomes?
It is worth mentioning that habitation by end-users will depend upon the completion of Dwarka Expressway itself and other support infrastructure such as access roads, schools, hospitals, F&B options, convenience shopping etc. Since the proportion of investors has been quite high in these markets, a lot of inventory is available in the secondary market. In order to bring the end-users, the shifting of toll is expected to play a big role along with the development of other support infrastructure. The seamless connectivity of NH 48, Dwarka Expressway and sectors along New Gurgaon will make these micro markets a preferred residential destination.
However, the construction of Dwarka Expressway has faced several roadblocks since its emergence as a residential destination. The area witnessed various litigations and infrastructure roadblocks. All these factors led to a slowdown in the residential micro-markets of New Gurgaon and Dwarka Expressway. More specifically, it led to a decline in new supply after 2015 as there was uncertainty regarding completion of the expressway due to delay in land acquisition along the expressway.
Post-2016, the cumulative effect of demonetisation, RERA and weak consumer sentiments led to a slump in the area. In 2016, new residential launches declined by 56 per cent in these micro markets.
As the completion of Dwarka Expressway project has been resumed and speeding up since the last one year, it is seeing traction in terms of both launches and revived buyers’ interest. Moreover, as Kherki toll plaza is likely to be shifted almost 15 km away, the residential projects in the area are expected to see an uptick in sales. Residents in New Gurgaon will benefit by the shifting of a toll as they will get direct access to various office corridors in Gurgaon without the hassle of paying the money, waiting in the queue and getting stuck in traffic jams. Gurgaon residential market which saw a decline in sales by 10 per cent q-o-q in 3Q19 but is expected to see a revival in sales if the toll shifts in the near future.
In 2018, post the announcement of land acquisition and recommencement of construction work of Dwarka Expressway, the launches saw an increase. Reputed developers such as Godrej, Hero Realty, Shapoorji Pallonji launched their projects among others. Some of the developers that had existing or under construction projects in these micro-markets launched new towers or phases. For instance, Sobha Developers launched a new tower in Sobha City, Chintels Group launched phase 2 of ‘Serenity’ and Shapoorji Pallonji launched phase 2 of ‘Joyville’.
Shifting of the toll will fuel residential demand
New Gurgaon and Dwarka Expressway are set to become key residential markets for several reasons. Firstly, the availability of housing options in each category and thereby catering to the mid-segment buyers makes it an attractive area. Secondly, the completion of the Dwarka
Expressway and the shifting of the toll will enhance connectivity to established office markets like Sohna Road, NH8, DLF Cyber City.
Finally, the expected development of social infrastructure, which is essential to improve liveability will also tilt the scales in favour of New Gurgaon and Dwarka expressway.
An added advantage of the shifting of toll is the increased sales in these micro-markets will reduce the burden of inventory thereby having a positive impact on the price level.
Although, 63 per cent of the projects are completed in the micro-markets of New Gurgaon the liveability conditions and support infrastructure need to be improved so as to make it more habitable and easily accessible for the residents.
Sales picking up
Sales have also picked up in the last one year in New Gurgaon and Dwarka Expressway as 54 per cent of the sales in Gurgaon (7034 units were sold) was recorded in 2018 in these localities up from 42 per cent in 2015 and 46 per cent in 2016. Various mixed-use projects having support retail is also coming up in these micro-markets which would provide convenience options such as daily needs stores, pharmacy and F&B outlets for the residents.
It is interesting to note that a majority of the apartment units sold in New Gurgaon and Dwarka Expressway belonged to upper mid category. However, the majority of the unsold inventory in Gurgaon is also located in New Gurgaon and Dwarka Expressway. Nearly 9,000 units in these micro-markets are unsold. Out of the total unsold inventory, the majority of the units are under construction and as these projects are nearing completion, the presence of good infrastructure will attract the prospective buyers.
Price stagnancy to go away
Since connectivity and proximity to workplace play an important role in the development of residential hubs, it is expected that shifting of the toll and infrastructure augmentation in these localities will help in selling the unsold units to the prospective buyers and fence-sitters. With this move, the residential prices in Gurgaon that had remained stagnant in the last few years will see a modest increase, making the offerings in these corridors attractive for both end-users and investors.