Marriages are made in heaven and take place on earth, thousands of them, e just a few, but there are just a few, exclusive, big, fat, celeb weddings that get newspaper or TV news channel coverage...
Well, a similar thing happens in the property market. As against hundreds of apartments bought and sold in the NCR region without anyone batting an eyelid, one or two exclusive deals of more than R100 crore in Delhi's most premium areas have the potential to set the realty frat on fire. And here we are talking about the well-fortified, multi-acre mansions with their well-manicured lawns on Prithviraj Road, Aurangzeb Road and Panchsheel Marg -all falling under the famous Lutyens Bungalow Zone or LBZ. It is, therefore, not surprising that when Suresh Kumar (name changed), a consultant who deals in such properties, was approached recently by an industrialist, the brief given to him was, “What are the top five properties that I can acquire? Show me where I can get them and I will if I like them.“ Most importantly, no budgets were mentioned. A unique market Not only is the location of this zone unique, the plot sizes and the prices are too.
In fact, each plot is likely to command a different price.
These properties have a huge desirability quotient with great snob value attached to the address. As compared to a general deal that takes place in a month or four months, a deal of this nature usually takes six months to a year to get through. As far as property appreciation is concerned, the rise has been almost 200 per cent in the last four to five years.
The buyers, too, usually have a diverse real estate portfolio and these properties are typically bought for end-use with an investment horizon in mind. Almost 80 per cent of these properties are bought for self-use, points out Shweta Jain, director, residential, Cushman & Wakefield. It's definitely an exceptional market as supply is very limited. The buyer profile in the area, which earlier included members of India's various erstwhile royal families and local businessmen (the primary owners), is now changing. Today, one finds big-time industrialists from all over India and NRIs, says Anshuman Magazine of CB Richard Ellis Interestingly, this was also perhaps the most resilient real estate market even during the slowdown. One factor could have been the prices, ranging from R5 lakh to R7 lakh per sq yd, differing from plot to plot and not necessarily related to demand and supply.
The soft factors dictating plot prices here include the exact location, vaastu and specific preferences of the buyer, points out Priyankar Bhikshu of DTZ India.
According to Puneet Nayyar of Gulshan Properties, “Barely a couple of transactions take place in a year as supply is limited. A client usually goes by his gut feel. The feel-good factor is extremely important.“ What is LBZ?
The Lutyens Bungalow Zone is spread over 26 sq km.
Properties in this area have remained with well-heeled families for years. Most of these are large-sized (covering half-an-acre to 2.5 acres), usually single-storey dwellings designed in Colonial style. The supply of housing under LBZ is around 500 acres.
The Master Plan Delhi 2021 has clearly categorised LBZ as a `No Industrial Activity Zone' where no `mixed use' activities as well as FAR enhancement for redevelopment are permissible.
Further, as per LBZ Guidelines issued by the Ministry of Urban Development in 1988 (modified from time to time), new construction of a dwelling on a plot must have the same plinth area as the existing bungalow and height should not exceed the height of the existing bungalow. On vacant plots, the lowest height of a bungalow on the adjoining plots are taken into consideration. “While purchasing a property, due diligence of the property's title documents fo at least the preceding 20 years must be conducted along with checking sanctioned building plans, permis sible FAR and completion certificate, in addition to property tax records and util ity bills. For completion of sale, it is necessary that a sal deed (for freehold properties) or transfer/lease deed by land-owning authority in favour of buyer (if leasehold property) be executed and duly registered.'' says Sunil Tyagi, senior partner, ZEUS Law Associates.
The challenges People may wish to sell these properties because of multiple ownership.
Many would want to mitigate future complications between inheritors. Others may have bought the said property for investment purposes and would want to book profits and exit.
The most important challenge is the title of these properties.
According to Anand Narayanan of Knight Frank, some are inherited properties owned by several people about 10 to 12 and, therefore are nonmarketable. Families have grown and the number of owners are far too many, as a result of which the title becomes ambiguous there may be lack of consensus between the owners or a dispute on the value aspects. “Typically in these locations, title is an issue and there are very few properties that carry a clear title.
In many cases, it is the clear title of property that may push up the price of the property,“ points out Jain. Most properties are also commercially non-viable due to heritage regulations.
A buyer usually needs to know what the built-up area is and whether that is part of the original sanctioned plan or not. A buyer should also make it a point to meet all the owners together and understand their intentions, says Jain.
Therefore, the title of the property is extremely important. The right valuation is important, too.
The value assessment is derived from the land value rather than the builtup area. There may be differences of opinion on the value of the property. The seller may be evaluating it on the basis of the land value and the purchaser wanting to take the built-up area into consideration.
Budget for most of these properties is not an issue.
And the value in most cases is determined through an auction, says Narayanan. Another constraint is that both buyers and sellers are typically of equal stature, which often leads to an ego clash. Concluding a transaction then becomes a challenge for the realtor who may take months to estimate the value of the property.
Courtesy ht estate dtd:-09/10/2010
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