Impact of the May 2009 Elections on Indian Real estate Industry
Often, I am asked about the Delhi master plan 2021, its connotations, fine print etc. In the last few weeks, most questions seemed to be centred around the “Indian Elections and the impact on the Real estate, especially on the Delhi master plan”.
Instead of putting together a structured flow chart type of a report, I thought I could share some of the inputs in a more conversational manner. (Not to mention that our research division also has the reasons documented in a very scientific manner. Institutional investors, large investors etc. can surely subscribe to it by sending a mail to us).
After many years, we have an extremely conducive and favourable eco-system for the real estate in Delhi NCR. The draft master plans for Delhi master plan 2021 are under review. The same should get approved in the next 6-9 months (if not earlier), for the following reasons:
Political Eco-system: Delhi state is governed by the Congress. The central government also is led by the Congress party. The congress has won 7/7 MP seats in these elections. Most stakeholders within governance have an interest to see through the same, and roll out the master plan.
The Political will and players: The last one week has displayed specific Intent and purpose from the stakeholders in the government to hasten the pace of development within India. If one looks at the cabinet formation and ministers in charge of the growth in the next 5 years, it indeed is a cause for rejoice. Mr. Jaipal Reddy, in his second term as the urban development minister would provide continuity and pace. Most other ministers who would have a say on the Delhi master plan also are in key portfolios, and intend to hasten development.
Demand: The demand shortfall / Demand projection for Delhi state, till the year 2021 is estimated as follows:
Residential 1 million Units
Commercial 38 million sq. ft
Warehousing* 16 million sq.ft
*Includes wholesale markets
The recent DDA allotment of approx. 5500 apartment saw a response from more than 1.2 million investors and home-seekers. Isn’t that proof enough of the captive demand for housing in Delhi?
Administration: Delhi has many civic agencies like DDA, MCD, Delhi Police etc. which do currently have a dotted line reporting to the government. Hopefully things would change and a more accountable system is likely to be put in place. Positive noises and actions are already visible since the last few days.
PPP – The whole essence of the Delhi master plan is on the Public-Private-Participation model, and we would see tremendous amounts of private capital being infused into the development of Delhi. Let us also not ignore the fact that multiple agencies like the Central govt, State govt, private enterprise, World bank and other aiding agencies, individual investors etc.would be investing into the infrastructure and other growth in Delhi.
Events – Commonwealth games, the bid for other games by 2020 etc. would bring in infrastructure investments into Delhi in the short & mid term. Besides, Delhi would always play host the visiting state heads, dignitaries, seminars, conventions etc. wherein the who is who of the global policy heads would be participants.
There are a deluge of reasons why one must invest into Delhi, including reasons for shifting investments from the NCR area into Delhi.
As an organization, we have invested more than 5 years into the Delhi master plan, and can be helpful for other members/readers of this content. I can be connected with on email@example.com
Our research findings (only a miniscule portion of the same) are already posted on www.delhi-masterplan.com