As per the recent MagicBricks Reality Index for Q2 2023 report, Gurugram market experienced a massive 29% increase in demand (y-o-y). In the latest quarterly result con-call of recently listed Signature Global, management explained that the Gurugram market was primarily investor-driven for many years earlier, which now has shifted to become an end-user market post covid. It has been led by various factors like the growing middle class, buying capacity, and job opportunities in this millennium city. As per a recent report by the Times of India, Gurugram is expected to see a great rise in population up to 55 lakh by 2041 which as per the 2011 census stood at 15 lakh.
The rise in the sale of properties and flats is not limited to just Gurugram or Delhi NCR, rather as per Knight Frank's latest Q3 CY2023 quarterly report, the top 8 cities of India which includes Mumbai, NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, and Ahmedabad, witnessed a healthy 12% rise in number of deals, hitting a 6-years high despite the highest level of interest rates seen in last 6 years. Out of these top 8, Delhi NCR (led by Gurugram) witnessed a 27% rise in sales volume on a YoY basis. Interestingly, the share of the sale of property with a value greater than Rs 1Cr is now higher than that of sale of property comprising ~35% of the total deals happening in these cities. This is attracting many new players in the Gurugram market and we shall be discussing the quantum of recent investments by some players in just the last 2 months. Apart from these, players like DLF, L&T, TARC, County group, etc have already planned launches in second half of the year.
1. Oberoi Realty's Entry into the NCR market
In mid of November 2023, the Mumbai-based developer entered into an agreement to acquire 14.81 acres in Gurugram's Sector 58 for Rs 597 crore from bankrupt developer, Ireo. The payment will be based on event and time-linked milestones. The deal includes provisions for existing homeowners. Oberoi Realty's potential entitlement from the project is estimated at up to 2.6 million sq ft. has taken possession of the land and plans to develop a luxury residential group housing project, marking its entry into the National Capital Region. The name of project of Ireo has taken over is undisclosed. (Source)
2. Godrej acquires 15 acres of land from Microtech
The land parcel was recently acquired in Gurugram's Sector 103 from Microtek Infratech for Rs 403 crore, according to documents from CRE Matrix. The sale deed was executed by Godrej Vestmark LLP on June 22, 2023, with a stamp duty payment of Rs 28.21 crore, the news came out in September 2023. The Mumbai-based real estate company plans to develop a project on the land but has not disclosed its revenue potential. This acquisition follows Godrej's purchase of land parcels in Noida in November 2022 and nine acres in Gurugram in December 2022. It’s a key player in real estate development, focusing on Delhi-NCR, Mumbai Metropolitan Region (MMR), Bengaluru, and Pune. (Source)
3. Experion Developers acquire 6 acres land from HSVP
The deal was valued at Rs 400 crores through an auction by Haryana Shahari Vikas Pradhikaran (HSVP) in Sector 53. The Haryana government has actively auctioned land, facilitating new projects for a few years now. Alongside Experion, players like Eldeco Group, Ashiana Housing, and Godrej have also acquired land through government auctions in recent months by state government entities such as HSIIDC and HSVP. Experion Developers previously acquired a 4-acre land on Gurugram’s Golf Course Road for Rs 400 crore and another 5-acre land plot in Noida Sector 45 for Rs 250 crore. All these land parcels are intended for residential development and were acquired through government auctions. (Source)
4. Hero Realty in advanced talks to buy a land parcel worth Rs 730 Cr from Godrej
As a buyer above, Godrej Properties is also looking to sell at gain seeing the buoyant market. It’s in advanced talks to sell a 14-acre land parcel in Gurugram to Hero Realty for approximately Rs 730 crore. As per experts, it is surprising how Godrej Properties, who had acquired the land two years ago, is selling this property at a handsome gain as land value appreciated significantly post covid. The deal is reportedly in its final stages, with both parties having agreed on the transaction. Hero Realty, backed by Hero Enterprise, is actively involved in multiple projects in Gurugram and has plans to launch real estate projects covering around 4 million square feet in the current financial year. Recently in July, Hero Realty also acquired 5-acre land in Gurugram for Rs 90 crore for developing a plotted residential project.
Hero Realty has its is ongoing projects in cities like Ludhiana, Haridwar, and Mohali but has tasted limited success due to market downturn. (Source)
5. Adore Group to invest Rs 200 crore in Gurugram project
The developer acquired 10.20 acre of land in Sector 77 and plans to invest Rs 200 Cr in developing residential project which would first of its kind in Gurugram based on Greek lifestyle. The group plans to sell over 700 units in 12 towers with revenue potential of Rs 1,000 Cr from this project. Till date this group has delivered 20 projects with cumulative area of 10.11 mn sq. feet. as per ET article (Sep, 2023)
6. Signature Global buys over 50 acres of land parcels
In October, the company entered into a sale deed for acquiring a land parcel admeasuring approximate 25.75 acres located at village Fazilpur, Gurugram, for development of a group housing project having overall potential developable area of about 3.25 million square feet. Recently in November, the company entered into another definitive document to acquire 25 acres of prime land on the Southern Peripheral Road in Sector 71 of Gurugram. From a location perspective, this project is close to European-styled living project by Tata housing, Primanti which was launched way back in 2010. (Source)
To End
One must remember, the biggest beneficiary of a buoyant Gurugram is DLF, who owns over 2400 acres of undeveloped land solely in Gurugram as per their investor presentation. Above mentioned deals by the 5 real estate player (ex of Signature Global) bought mere 60 acres of land for ~Rs 2,500 Cr. Simple math would give you a land valuation of ~Rs 1 Lac cr for the land that DLF holds in Gurugram, but obviously with many caveats and assumptions.
A buoyant market attracts competitors and can cause excessive supply/inventory in years to come if the demand doesn’t grow the way expected. We continue to be bullish on DLF, and closely monitor all the development happening in the Gurugram market.
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Leaving you with few of our previous works on DLF:
Disclaimers-Â
I am not a SEBI registered advisor; personal investment/interest in the shares exists for the company mentioned above; this isn’t investment advice but my personal thought process; DYOR (do your own research) is recommended; Investing & trading are subject to market risk; the Decision maker is responsible for any outcome.