LAND INVESTMENT IN L ZONE OF DELHI

BRAND REALTY Group is in the process of identifying suitable lands in L Zone of Delhi for investment. There are two types of lands ------------- R Zone land and Green Zone land. A brief overview of both types is given hereunder.

Overview of R ZONE LAND falling under LAND POOLING POLICY :
Delhi Development Authority notified Land Pooling Policy for 104 villages in Delhi where Real Estate projects will be able to come up once the policy is fully implemented. Main features are :
1. Delhi divided into so many zones – our focus is on L Zone as that’s closest to Gurugram, Delhi Airport, Dwarka Expressway and South Delhi.
2. R zone clearly marked out by DDA where projects will be able to come up
3. Sectors already marked around each village
4. Land can be submitted for Land Pooling through the DDA portal
5. Once 70% contiguous land in any sector is offered for pooling up --- then land owners shall be invited to form a consortium
6. Every owner through the consortium shall be eligible to get 60% of the land pooled for developing a Real Estate project --- process for actual site for each land owner yet to be finalized
7. Project on the Developable land will have an FAR of 200 as per current proposal
8. There may be some Development charges levied by DDA in future
9. Common infrastructure like Roads, Institutional activities, Parks, etc. shall be developed by DDA on the 40% land retained by them
10. On a price of 4 Cr per acre, FAR cost comes to 769/- per sqft which alongwith charges may be assumed to be Rs. 1500 whereas once development starts apartments will sell for atleast 10000 to Rs. 12000 per sqft in the beginning bringing up FAR costs to atleast Rs. 5000 -------- potential to value 3 to 4 times from current levels
11. Possibility of some positive developments --------- Increase in 60% area allocation, increase in FAR , relaxation in 70% condition, etc.

Overview of GREEN ZONE policy :
1. All the agriculture land coming in Delhi side of the border with Haryana has been earmarked for Low Density Green Zone policy where 3 or 4 dwelling units are proposed to be allowed for development on one acre of land
2. The land should fall on 33 ft road and there are some other norms proposed in the Green Zone policy
3. Its expected that when the policy is properly implemented and when construction of dwellings gets allowed, there can be a quantum jump in the values of such lands

BRAND REALTY Group feels that investment in both R Zone land and Green Zone land in L Zone of Delhi is likely to give above average returns even though there is a bit of uncertainity regarding the timelines in which this is likely to happen.