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Why Connaught Place is world’s 4th most expensive office location


Connaught Place (CP) and its surroundings has, for long, been the centre of socio-political and economic activities of New Delhi. It is not only the capital’s central business district (CBD) where many offices of the central government, banks and companies are located but also one of the most popular high-street shopping centres of the city. It has a wide variety of retail outlets, shops, emporia, cinema halls and restaurants. The place is equidistant from most major residential pockets and accessible through intricate road network and the Delhi Metro.

Historically, Connaught Place has been the most sought after district for headquarters and front offices of Indian companies due to the prestige and value addition it lends. Many domestic and international companies maintain their front offices for visibility here but take up mid-scale to large spaces in suburban locations such as Gurgaon and Noida that offer newly constructed commercial offices with efficient designs and better facilities. These are just enough reasons for anyone to book commercial space here at CP, who needs to establish their brand presence and visibility. Depending on one’s affordability and availability of space.

The importance of the space can also be read from the fact that some of the most revered global brands across services and products have their established presence here. Among the major companies that have their offices in Connaught Place are Citibank, ING Vysya, Lufthansa, Reliance, LIC, Air India, TV Today, Standard Chartered, HSBC Bank, Rolls Royce, BNP Paribas, and Reuters among others. Connaught Place, by virtue of its century long legacy, available office space have been graded into A, B and C categories based on the age of the quality of construction, superiority of location, amenities, services and ability to attract highest paying occupiers. Grade A buildings have the highest rentals, Grade C have the lowest.

Limited availability of Grade A space has led to fewer transactions in a commercial office. Rents have increased by 25 per cent in 2012 and the location has become the fourth most expensive office location across the world. The average rental values for Grade A commercial space ranges from Rs 350-450 per sqft per month. With extremely limited Grade A stock (around 1 million sq ft) currently present in the micro market, most Grade A office buildings are close to fully occupied and therefore owners are in a position to charge high premiums.

There are also some Grade B office spaces available for both sale and on lease. Nonetheless, lease transactions are more common and rentals for Grade B office spaces are quoted in the range of INR 200-325 per sqft.

Connaught Place has very low vacancy rates and at the end of the fourth quarter of 2012, whilst the overall vacancy rate stood at 5.2 per cent, Grade A commercial spaces stood at 4.3 per cent.


Lieutenant governor nod for realty business on private land

Comments Off   |  March 10, 2013

NEW DELHI: In what is being perceived as crucial to Congress’s poll fortunes, lieutenant governor Tejendra Khanna has approved Delhi government’s proposal for sale and purchase of properties on private land in recently regularized colonies. The state government’s re-classification of the definition of private land will now be notified through an order.

Earlier, the urban development department had made out a case for legitimizing these privately-held lands that appeared in land records as being earmarked for acquisition. The department said that in the 312 regularized colonies, land was notified for acquisition but remained in private hands. The state, therefore, sought sale and purchase of those private lands after their de-notification under the Land Acquisition Act.

Meanwhile on Thursday, chief minister Sheila Dikshit sought Union urban development minister Kamal Nath’s intervention in ensuring early regularization of around 200 unauthorized colonies.


BJP promises to clean Yamuna, says Dikshit govt did nothing

Comments Off   |  March 10, 2013

Opening up another front against Sheila Dikshit government ahead of Delhi Assembly elections, Bharatiya Janata Party promised to clean up the Yamuna if it comes to power. Delhi BJP chief Vijay Goel said the party will protest against the government inaction to clean the river.

Alleging that Rs 4,439 crore has gone down the drain, Goel said Central Pollution Control Board’s latest report shows that Yamuna’s water still resembles that of a drain. With almost 10 to 12 MLAs by his side, Goel unveiled a document on Yamuna and the party’s vision to save the river.

Attacking the Congress government, Goel said, “Haryana too has a Congress government and by blocking water at Hathini Kund barrage the government is letting the river die. At this barrage, 97 per cent of natural fresh water is taken away within a few kilometres of its birth. The withdrawal is made in the name of irrigation, industrial development and drinking water. This water is grossly mismanaged.”

Goel alleged that government has not done anything about the 18 drains that make their way to the Yamuna. “In 1993, the first Yamuna Action Plan was prepared and the river is still polluted. It passes through 22 km in Delhi and has become one of the dirtiest rivers in the country. Of the drains that fall in Yamuna, Najafgarh drain contributes 61 per cent to the total pollution of Yamuna, Shahdara drain contributes to 17 per cent, Delhi Gate drain contributes to 6 per cent. The 2 per cent of (river) stretch that comes in Delhi is responsible for 80 per cent of the entire pollution,” he said.

Goel claimed that the river will die in next 10 years if it continues to face neglect. Offering a solution, Goel said sewage problem of the city is also responsible for dirtying the river.


Litigations help rich buy Lutyens’ Delhi houses for way below market price

Comments Off   |  March 9, 2013

NEW DELHI: An agent of a top Delhi businessman has been gloating to his friends about how his client acquired a bungalow in Lutyens’ Delhi at a bargain, and if he sells it at market price today he’ll pocket a cool Rs 70-crore profit. That is because the businessman acquired the bungalow in a court-initiated auction. According to property consultants, many such deals are taking place in Lutyens’ Delhi where real estate rates are among the highest in the world, and the new rich are merrily gobbling them up.

Many bungalows in the heart of the capital are being sold way below their market price because their original owners are embroiled in litigations, court interventions, encroachments (by domestic helps, dhobis and tenants who have been settled here for decades) or murky property titles. Joint owners of the bungalow mentioned earlier, for instance, had been in a dispute for several years and they moved court. The court ordered an auction at a reserve price set five years ago, which was much lower than actual market price. So the businessman bought it for Rs 150 crore while the market value of the property is more than Rs 220 crore.

“The valuation of a property with a clean title and without litigation is much higher. Selling a litigated property is almost akin to a distress sale,” says Santhosh Kumar, chief executive officer, operations at property consultancy Jones Lang LaSalle India, which has brokered some of these pricey deals.

In a recent case, a bungalow on a oneacre land on Kasturba Gandhi Marg near Connaught Place was sold to a Delhibased builder for Rs 135 crore because it fell in the prohibited zone of Archaeological Survey of India and also had encroachments by servants, who refused to vacate, and other litigations. Around the same time, Tata Housing paid Rs 218 crore to buy a bungalow on a similar plot on nearby Hailey Road, which did not have any such issues. On Amrita Shergill Marg, Bharti Enterprises vice-chairman Rajan Bharti Mittal recently bid Rs 156 crore for a 0.7-acre property that had been under litigation involving four brothers since 1980.

The property had been on the block for many years with a much higher asking price, but due to the litigation among the brothers, the value got eroded and eventually when the court intervened and an auction happened, the reserve price was set at a low figure of Rs 140 crore.

One of the co-owners of the property, Shivraj Gupta, protested, saying the property was undervalued at the time of the auction. “I had also appealed to the court to re-fix the reserve price keeping in mind the prevailing market prices but the court did not accept my contention,” he says. But the auction did take place. Again, Gupta offered to pay a higher amount than the highest bid. But the court rejected his bid. And it seems the property will finally go to Mittal. Shveta Jain, head—residential services at real estate consultants Cushman & Wakefield, says, “At Rs 156 crore, the property is grossly undervalued. Its market value would be over Rs 200 crore today.”

A lawyer involved in a number of transactions in Lutyens’ Delhi says litigation is a major cause for under valuation of properties and, in some cases, buyers find ways to enter the property by purchasing the share of one or two family members who are litigating against the others. “Eventually he might be able to force the others to sell to him as well at a lower price,” says the lawyer.

Properties purchased by Shravan Gupta of Emaar MGF and Airtel’s Sunil Mittal on Amrita Shergill Marg in the early 2000s had pending disputes, but it could not be independently verified whether they were bought at a discount from market rates prevalent at the time.