We are asking our experts to comment on this, with specific relevance to Lal Dora land parcels. —————————————————————————————————————————————————————————————

New Delhi Mehrauli’s Qutub Minar trail had gone cold three years ago after the municipal corporation’s frenetic sealing drive. Most boutiques on the road leading up to the Minar from the rear —that street of high fashion known as the Kalka Das Marg — had been shut for violation of building laws.

But another provision — the Delhi Laws (Special Provisions Act) — is bringing back the bustle in this stretch. This Act provides protection to properties that had been sealed, and till now had provided amnesty to sealed properties in rural areas.

But this year, its cover has been expanded to urban areas as well — this particular stretch being the immediate beneficiary.

The Act allows major properties to continue temporarily till they are converted to their proper legal use. It has been extended every year till now, from January to December.

Meanwhile, the brooms are out on this stretch to dust down the cobwebs. A popular eatery here is the Olive Bar and Kitchen, that is gearing up to throw its doors open. Though its blue, wooden gates are still chained, the lock now hangs from the inside. Several guards sit around watching the men clean the large courtyard.

Adjacent to Olive is the high-end boutique Carma, where work is on at a frantic pace.

De-sealing has come as an interim relief to owners whose properties had been sealed on grounds of misuse or unauthorised construction. Many high-end outlets in Mehrauli like the One Style Mile — the stretch between Qutub Colonnade and Ambawatta Complex — and other shops on M G Road had been sealed in this drive.

However, the Delhi Laws (Special Provisions) Act came into effect in 2006 after the Municipal Corporation of Delhi (MCD) started sealing commercial establishments in residential colonies in February that year. An MCD official said: “The government brought urban areas under the protection umbrella of the Act this year to rescue the major properties that were lying sealed. Till last year, only the rural village or abadi land was protected.”

Municipal sources said these properties would ultimately run according to its legal use and this is largely the condition for de-sealing.

For example, owners of the Ambawatta Complex, the high-end shopping complex — had given an undertaking that it will be ultimately converted into a residential area, upon which it got the permission to de-seal.

Manager, Ambawatta Complex, Anil Kumar said: “The complex will be used for residential purposes by the owners. The construction for that is being carried out. But if we get permission to use it commercially after December (when the Act expires), the shopping complex might well be back.”

Some outlets on Mehrauli and MG Road — both of which come under urban village areas — have, however, got permission to carry on commercial activities. Director, One Style Mile, Sanjeev Batra told Newsline: “As of now, we are glad the plot has been de-sealed. We shall keep taking things as they come.”

One Style Mile was officially de-sealed on May 22 this year and soon after, Ambawatta Complex was given the permission to reopen on May 25. Several other property owners in the area too have begun applying for permission to de-seal under the Act.

After December 31, 2009, it remains to be seen whether the government extends it again or modifies Master Plan 2021.

Many a things about the Delhi master plan, and the pace at which it is evolving goes unnoticed.

In the past week or so, there have been affirmative reports about fast paced developments, on the policy notification, of the MPD 2021.

For those who haven’t travelled on the NH-10 for some time, this is the time to actually go towards Bahadurgarh, from the Peera Garhi chowk, ad take a rain check. As you hit Mundka, from nowhere, a humongous development of the Delhi Metro (DMRC) is visible. We are given to understand that this might be a big MRO centre for the Metro, and that progressively, more than 5000 resources would be working out of the Mundka centre.

This particular DMRC hub is adjoining the proposed 100 meter road, which originates from beyond the NH-1 and connects 4 national Highways. The Metro hub is supposedly being developed as a one of its kind in the South Asia region.

There is fresh news that DMRC has awarded the contract for development of housing, for its employees, within the Mundka land. It is supposed to be a beginning with about 1.30 lakh sq. Feet of housing development for the employees. Per the developer press release, the structure is likely to be Ground + 7 floors structure, and is likely to be completed within about 15 months. This would kick off fresh demand for housing under zone ‘N’ from the other employees working, in and around the vicinity.

The other recent notification being the conversion of 25 acres of Land under sector 36 of Rohini, from ‘Recreational’ to ‘Transportation’. Per sources contacted by us, it is understood that the Lieutenant Governor has already sanctioned approval for the conversion. This should pave the way for the accelerated development of the Heliport project, slated to be completed by the common-wealth games 2010. This project too is close to the 100 meter road connecting the 4 NHs. This should give a big leg up to the proposed developments under zone N of the MPD 2021.

The other good news that many a well wishers of Delhi await is the positive announcements regarding the Mini India project, under Village Kanjhawla. That would send a wave of positive energy through the entire area from Narela to Rohini to Najafgarh.

The paced at which many a notifications have been rolling out, we believe the means would definitely leads towards a very satisfactory MPD 2021 roll-out.

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 menon@certesrealty.com

Our research findings (only a miniscule portion of the same) are already posted on www.delhi-masterplan.com

When I returned from the USA in 2004, and I huddled with my friend Ramesh Menon to identify the areas where we could invest our hard earned money. The brief was clearly to focus on three factors, on which to scale the investment strategy.

RISK                           On a 5 year horizon, how much would each investment avenue Grow /        Stagnate / or depreciate

TERM & TERMS        Entry level pricing to be benchmarked against the stay-in period of investment over a 3–5 year window

LIQUIDITY                  How easy would it be to PROFITABLY EXIT, in parts or in whole?

Our detailed study & exercise led us to the conviction that LAND IS LESS VOLATILE compared to mutual funds, stocks, equities, Investment trusts etc. Haven’t we all experienced and witnessed the massive erosion of wealth & valuation in the past few months, on most investment instruments mentioned above?

I am happy for my strategic decision to choose land over the other mediums, as the preferred investment three years ago. As for valuations, my investments have already appreciated over 300%, and still going strong.

It would be a good idea to share the seven reasons why we feel that investing in land is the best option within real estate compared to the much more “touted & publicised options” of built up spaces in buildings.

Reason # 01 Land is an evergreen, ever-growing asset. Brick & mortar assets like buildings (mall space / office blocks) deteriorate with time, whereas LAND DOES APPRECIATE, with time. Remember, some studies confirm that the value of any commercial building becomes ‘Zero’ in 27 years. Even when the building is useless & demolished, what is left behind is LAND.

Reason # 02 Land is an asset from day one. It has very little lead time to mature from purchase to progress. For e.g. If you are an early bird buyer for a residential or commercial property, it typically takes 3–5 years for your asset to be registered in your name, and to draw returns from them. One keeps investing money & time for 3–5 years, without returns. Land can be registered immediately, and can start delivering returns.

Reason # 03 Land is one asset which affords the most flexible options, within the real estate products.  You can choose to buy any size & dimension, any value, anytime. Besides, land can be put to multiple use during the period of ownership. Let me elaborate. Agricultural land if invested into; can be used for farming. Post zoning, land use can be changed and commercially used. Anything build on it can be redeveloped, for e.g. the same piece of land could end up being used as warehouse premise, commercial, residential, etc. etc.

Reason # 04      Land affords simple investment management. Once bought, it doesn’t incur high costs compared to built-up products. It is most likely that the land bought is self sufficient in deriving the maintenance cost, whereas, the other products attract a continually incremental maintenance.

Reason # 05      if we analyze the supply Vs demand for real estate products in our country, land as a commodity would remain in demand for the next couple of decades. There is an acute demand for finished products, which would have to be constructed on LAND.  Hence, investments in LAND are bound to grow, provided the buying strategy is right. For e.g: Delhi as a city state is forecasted to grow from 136 lakhs to 240 lakhs of population in the next decade. That necessitates almost another few thousands of hectares to be brought under development. Hence, invest in land today, rather than wait for appreciation at a much later date; at much lower returns.

Reason # 06      With the economy projected to grow at a fast rate, and with disposable incomes being higher, aspiration of green living, bigger houses, better amenities, affordable luxuries etc. would take over. Those can be achieved on bigger land chunks being brought under development. Hence, invest in land today.

Reason # 07      Land affords the “right balance in your real estate portfolio”. While investing in real estate, one needs to have a right product mix to hedge the risk, with one or two products which are low on risk and high on returns. That is what land promises to be.

Having said the above, we also advise our clients to exercise the right amount of caution and source expertise while buying land. Seek out experts rather than take the ‘gut-feel-approach’. Analyze-understand-replicate success stories in land as a portfolio rather than try to re-write a success story. Remember, all leading developers in our country grew at this scorching pace on valuations, using land as the growth engine.

HAPPY LAND-ing!!!!!!!!!!

The author is the Founding Partner  for a Gurgaon based Real estate consulting organization Certes Realty Ltd. and can be contacted on ajay@certesrealty.com

The term “LAL DORA” was used for the first time in the year 1908. It is a name classification given to that part of the village land which is part of the village “Abadi” (Habitation). It was supposed to be used for non agricultural purpose only. It is that part of the land which was supposed to have been an extension of the village habitation, wherein the villagers used to have their support systems, livestock etc. In the olden days, these areas were marked by the land revenue department by tying a Red Thread (Lal Dora in Hindi language) around it, to make a boundary and to distinguish it from the agricultural land. The lal Dora also denotes that the jurisdiction of the municipal authorities or the urban development is not applicable, in toto.

In 1957, the Delhi municipal corporation issued a notification n and the government listed the lands under the LAL DORA classification, within and on the outskirts of Delhi.

Lal Dora was exempt from the building bye laws, and strict construction norms and regulations, as regulated under the Delhi municipal act. There was / is no need to apply for the building sanction plans etc. In 1963, the MCD passed a notification which did not make it mandatory for building sanction plans to be passed for the urban Lal Dora lands too.

Though the term Lal Dora applies to both Rural & Urban villages, the thin dividing line has vanished over the period of time, and prime areas of Delhi today (though still classified as Lal Dora) operate commercial & high end residential areas.

Villages like Basant Gaon, Munirka, Khirki, Yusuf sarai, Katwaria sarai, Mahipalpur, Chhatarpur, Sant Nagar, Rangpuri, Kanjhawla, Najafgarh, Lado sarai, Mehrauli, Shahpur Jatt etc. have all been absorbed into the developed limits of Delhi, and they form part of the elite areas.

The Lal Dora areas in some of the rural villages, which are surrounded by agricultural land, have been included under the Delhi master plan MPD 2021. These Lal Dora lands would abutt the premium residential & commercial zones. To top it all, many such lal Dora areas would be extremely well connected through the proposed initiatives of the government to connect the Delhi city through a maze of Roads, expressways, metros etc.

Many Lal Dora abadis have the facilities provided by the government like secure electricity connection, water from the Delhi Jal board, sewerage etc. After the New master plan of Delhi MPD 2021 is notified, many agricultural lands of these villages would be included in the residential or commercial zones. With the provision of infrastructure to these areas, most of the erstwhile Lal Dora areas without these amenities & infrastructure would be included.

Statistics reveal that there are 362 villages in Delhi, out of which 135 are classified as urban villages, and 227 are classified as rural villages. Decades back, when the revenue settlement was undertaken for Delhi, for the first time, most of these villages were well defined and the population was enumerated within those boundaries. The land outside these Lal Dora lands was appraised for the purpose of land revenue, as Agricultural land. Between 1908 and 1952 (when the consolidation exercise was taken up again), the population of these villages expanded and the villages too had extended beyond the earlier defined boundaries. The new periphery boundaries were termed as “PHIRNI” and the areas between the earlier LAL DORA boundaries, and the “PHIRNI” was known as the extended Lal Dora area.

In August 1963, a notification was issued by the then Delhi administration that no building permissions are required for the construction on the extended Lal Dora land, too, if and since, the land owner is creating a habitation / house for his own living / subsistence.

The above is only for information. The latest rules and regulations governing commercial construction on the Lal dora land would be as per the revised master plan norms. (ref. the Tejinder Khanna committee recommendations ‚the expert committee on lal dora report (2007) and the observations of the Hon’ble Courts directive. This Author does not take liberty / responsibility of reporting details of those decisions, to be framed and released at a later date.