Thursday, October 29, 2009

JLLM - 2010 Commonwealth Games Accommodation - Delhi Pulling Out All The Stops

Pankaj Renjhen, Managing Director – North India, Jones Lang LaSalle Meghraj

In terms of providing the required accommodation for the upcoming Commonwealth Games, Delhi has certainly been witnessing some significant operational challenges. There have been delays in approvals and permissions, and rather loud hiccups in the framework. Whatever finally happens at the delivery end, it has become fairly evident that there is bound to be a shortage of rooms in Delhi for the Commonwealth Games.


This has led to backup measures being put in place. Private residences have been given permission to register single rooms as bed-and-breakfast accommodation. The bed-and-breakfast system is not new in the Delhi region. However, it was not profitable until the coming of the Commonwealth Games. Now that the system has been revived and officially ratified, it will doubtlessly continue at an organized level even after the Games. Homeowners who have been issued bed-and-breakfast licenses will have to renew them every two years, and three months prior to expiry.

There has also been some speculation about farmhouses in the Delhi NCR region being mobilized as stopgap accommodation measures. Going by records, requests by farmhouse owners to utilize their properties for this purpose have certainly been made. The provisions for the Bed & Breakfast scheme would extend to farmhouses, as well. Conceivably, a certain number of farmhouse owners may rent out single rooms for tourist use during the Games.

However, because of the personal sentiments attached to these properties, their location, and the fact that they have residential-use status only, this temporary semi-commercial utilization will not turn into a long-standing trend after the Commonwealth Games. These farmhouses are at the luxury end of the residential market, often with carefully maintained ambiance and infrastructure. Offering them up for long-term tourist use would not be a concept that would appeal to many of these farmhouse owners.

In the second place, most farmhouses in the Delhi NCR region are located in clusters around Mehrauli, Bijwasan, Rajokri and Chattarpur, which are far from strategically placed in terms of where the main Commonwealth Games action will be. As such, they would not present much of an advantage for visitors.

Apart from the above measures, approximately 700 under-construction DDA flats coming up at Vasant Kunj and Rohini will be made ready to accommodate visitors.


Meanwhile, the hospitality sector is going all out to meet the deadline. Some of the 5 star hotels coming up for the Commonwealth Games are Crowne Plaza at Okhla Industrial area, Crowne Plaza at Mayur Vihar, Hilton (Piccadilly) at Janakpuri, Radisson Marina atConnaught Place and Hilton Convention Luxury Hotel at Dwarka, among others. The 5-star deluxe Leela Palace at Chanakyapuri is also in the pipeline. 4 star hotels include Holiday Inn at Mayur Vihar and Novotel at Jhandewalan. In the Gurgaon area, the 5 star supply includes Radisson Manesar and Frasers Serviced Apartments at Udyog Vihar. 5 star deluxe hotels include The Westin Gurgaon, The Oberoi, Four Seasons Gurgaon-DLF Golf Links and JW Marriott at Manesar. Some of the four star hotels are Courtyard by Marriott, Park Plazaextension & Convention Centre and Park Inn. However, this is not an exhaustive list.

Friday, October 16, 2009

Demand for larger homes picking up

Mohammed Aslam, Head – Pune, Jones Lang LaSalle Meghraj:

Pune’s real estate market is pulling itself out of the doldrums brought about by the slowdown. Over the last three months, buyers have begun populating the residential market again and are beating a path to various developers’ sites in search of good deals. Apart from a resurgence in positive sentiments, this renewed demand can also be attributed to the fact that HFI has brought down home loan interest rates to 8-8.5% on fixed interest loans for three years, which stands in marked contrast to the 10-11% that prevailed just six months ago.

While Pune’s real estate market was in the deepest throes of the downturn, the 1BHK and studio apartments were practically the only moving products. Today, general buyers preferences have once again evolved to 2-3BHK flats. The most popular price tags currently fall within the range of Rs. 25-35 lakh.

The slowdown has brought about residential space affordability and availability in areas that were previously out of reach for middle-income buyers. Due to reduction in pricing, residential property buyers now have a choice of attractive deals in preferred areas like Baner, Wakad, Kondhwa, NIBM Road and Aundh. There is also a high level of interest in projects along Nagar Road, which now falls in the new IT/ITES growth zone and represents considerable future appreciation potential.

Projects that were put on indefinite hold during the financial crunch are now seeing the light of day, with construction once again on a war footing across the city. Projects that are due to be launched within the next six months are being advertised heavily. For projects to be launched within the festive season, developers are not offering freebies and esoteric incentives but are focusing on price discounts for limited periods. Some of the most significant launches will include those by Pharande Spaces, Gera and Panchsheel.

On the downside, we have been seeing the first stirrings of price escalations in Pune. Based on the fact that the demand revival is still in its infancy, this represents a worrisome scenario which seems to indicate that the slowdown did not deliver a sufficiently convincing message. Owing to the price-conscious buyer profile that generally defines Pune, demand for residential spaces will only continue to grow as long as rates remain rational.