New Delhi: Undeterred by a slowdown in demand for homes in urban India, DLF Ltd, India’s largest developer by market value, is likely to launch a residential project by the end of March on one of the country’s most expensive patches of land in west Delhi.
The pricing of the apartments on Shivaji Marg is likely to be set between Rs6,500 and Rs7,000 a sq. ft translating into purchase prices of flats to just under Rs1 crore.
DLF Shivaji Marg project will be a ground plus 18-floor structure consisting of at least 500 flats of two- and three-bedroom apartments. The size of the apartments will vary between 1,200 sq. ft and 1,525 sq. ft, which means the flats will be priced between Rs78 lakh and Rs99 lakh. For the locality the project is in, the prices are considered competitive.
Upbeat: The DLF corporate headquarters in New Delhi. DLF plans to erect an integrated township. Ramesh Pathania / Mint
In August 2007, DLF had acquired 38 acres of land from DCM Shriram Consolidated Ltd, or DSCL, and the Lohia family of Indorama Group of firms for Rs1,675 crore, in what was then seen as the most expensive land deal in India surpassing second-ranked realty rival Unitech Ltd’s acquisition of 300 acres of land in Noida for Rs1,582 crore.
BPTP Ltd’s acquisition of 95 acres of commercial land in Noida, a satellite town east of capital New Delhi, for Rs5,000 crore followed in March 2008, ranking the most valuable land deal in India.
The purchase of the Shivaji Marg property was also the first major land deal at DLF after its initial public offering in June 2007. DSCL and the Lohias had a 50:50 right on the property, better known as Swatantra Bharat Mills and DCM Silk Mills.
DLF plans to erect an integrated township on the land including 3 million sq. ft. of office space, 2 million sq. ft. of retail space, and around 5 million sq. ft. of residential units. Earlier, DLF had planned to develop high-end residential units in the township but with demand for luxury homes contracting, DLF now plans to develop mid-income homes.
In February, DLF reduced prices of some of its residential projects in Bangalore, Hyderabad and Chennai due to slowing demand for apartments. The price cut was between 10% and 25% in these cities.
DLF has initiated market research to determine the price of the apartments. “We have let our brokers research the market,” Rajiv Talwar, group executive director of DLF, said. “The idea is to leave plenty on the table for buyers...brokers are in the market to find out at what price point people will invest in the heart of the city.”
The company is trying to position the Shivaji Park development as a mid-income housing project. “We want to build typical middle-class housing for people who use the Metro for conveyance,” Talwar said.
The final price will eventually depend on the response from the market, Talwar clarified. “Although, the project is equidistant from the Commonwealth Games Village, we are willing to launch it at half the price of flats in the Games Village,” he said.
Apartments in the Games Village, being developed by realty firm Emaar MGF Land Ltd, are priced at at least Rs12,000 per sq. ft.
An analyst said the new DLF apartments were competitively priced but sales may be slow in taking off. “The only drawback is that people will still have to be comfortable with the fact that it is not a ready apartment...so while the project will get people interested in it, the interest may not translate into actual sales,” said an analyst with a brokerage firm, who asked he and his employer not be identified.
The business community is more likely to be interested in such a project rather than the salaried class, he added.