Report on Data, Models, and Estimation of Market Share
of Builders Operating in the Luxury (High-End)
Residential Segment of Gurgaon
by
QuBREX - QuBit Real Estate eXchange
(A Unit of QuBit Technologies Pvt. Ltd)
Registered Office: 1/926, Naiwala, Karol Bagh, New Delhi – 110005
Branch Office: 3311, Sector 23, Gurgaon, Haryana – 122017
www.QuBREX.com
9811987371, 9871219911
May 08, 2011
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Table of Contents
1. Objective of the Report ..................................................................................................................... 3
2. Context of the Report ........................................................................................................................ 3
3. Concept (and Mis-Concept) of Market Share of an Enterprise ......................................................... 4
a. Definition of Market Share............................................................................................................. 4
b. Mis-Concept of Active Stock to Measure Market Share in JLL & Genesis Models ..................... 4
c. Misrepresentation of Accuracy of Data In JLL’s “Active Stock” (Market Share) Calculations .... 8
d. Misrepresentation of Continuous Reality by Discrete Temporal Snapshots in Jones Lang LaSalle
(JLL) & Genesis Models ....................................................................................................................... 9
e. Limitations of the JLL and Genesis Data & Models ...................................................................... 9
4. Relevant Geographic Market ........................................................................................................... 11
5. Relevant Product Market ................................................................................................................. 16
f. Data Collection & Creative Commons License ........................................................................... 17
g. Accuracy of Data & Information Collected ................................................................................. 18
h. Definition of Luxury Product in Relevant Geographic market .................................................... 19
i. Luxury Market Share (i.e., above Rs 7000 psf) of Various Builders Over The Years ................. 22
i. Market Share By Completed Properties ................................................................................... 24
ii. Market Share By Launched (Incl. new launches, under construction property, and
completed) Properties ...................................................................................................................... 35
j. Real Estate, Luxury, & Location .................................................................................................. 46
6. DLF's Pioneering “Walk to Work” Integrated Township of Gurgaon ............................................. 48
7. DLF & Consumer Preferences ........................................................................................................ 53
8. DLF & Sales Organizers Preferences .............................................................................................. 54
9. Conclusion of the Report ................................................................................................................. 55
10. About QuBREX ........................................................................................................................... 56
11. Appendices ................................................................................................................................... 57
k. Appendix A – List of Group Housing By Private Builders In Gurgaon ....................................... 58
l. Appendix B – DLF Takes Steps To Keep Speculators At Bay ..................................................... 74
m. Appendix C – Check Out These Super Luxury Flats ............................................................... 75
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1. Objective of the Report
The report was made at the request of DLF Park Place Residents Welfare Association and Belaire
Owners Association, with reference to Cases 18 & 19 of 2010 in the Competition Commission of India.
The objectives of the report were to:
1. Collect specific data for residential projects in Gurgaon including launch dates, possession dates, number of apartments, current prices (March 2011) of accommodation, and their
locations. The list of residential projects has been enumerated in Reports of Jones Lang LaSalle
(JLL) (Mar 04, 2011) and Genesis (Mar 15, 2011).
2. Collect additional relevant data and information about the builders, their customers, and market
forces that help describe the property eco-system in Gurgaon.
3. Study the models put forth by JLL and Genesis and provide expert comments on whether the
models are in agreement with the property eco-system of Gurgaon.
2. Context of the Report
Cases 18 & 19 of 2010 have been filed in the Competition Commission of India, alleging that DLF is a
dominant player in the relevant geographic and product market, and relief is sought from the august
Commission. The Competition Act (2002) and the Competition (Amendment) Act (2007) lay down in
Section 19 of the said Act the Duties, Powers And Functions of Commission, and this report is a study
of the property market in light of Clauses 19 (4) (6) & (7).
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3. Concept (and Mis-Concept) of Market Share of an Enterprise
One of the major elements of this report is the estimation of the market share of the enterprises (Clause
19.4 (a) of the Competition Act) operating in the relevant geographic and product market.
a. Definition of Market Share
Market share (from Wikipedia.org) in strategic management and marketing is, according to Carlton
O'Neal, the percentage or proportion of the total available market or market segment that is being
serviced by a company. It can be expressed
• as a company's sales revenue (from that market) divided by the total sales revenue available in
that market.
• It can also be expressed as a company's unit sales volume (in a market) divided by the total
volume of units sold in that market.
It is generally necessary to commission market research (generally desk/secondary research) to
determine. Sometimes, though, one can use primary research to estimate the total market size and a
company's market share.
b. Mis-Concept of Active Stock to Measure Market Share in JLL & Genesis Models
The first step in calculating the market share is to identify the relevant product and geographic market,
and then the market share calculations can be done. Unfortunately, as noted in the JLL and Genesis
reports, once the relevant product and geographic market is identified, the market share for Indian
Property Markets is hard to compute if these calculations are to be based upon a company's unit sales
volume, or on the company's sales revenue. The unit sales volume or the sales revenue is hard to
obtain for Indian Real Estate enterprises. Thus, some proxy or estimator has to be used for the unit
sales volume and sales revenue.
The Genesis and Jones Lang LaSalle (JLL) Models use a proxy called “Active Stock” for calculating
market share. This questionable (and with shifting definition) artifact from the JLL Model called
"active stocks" (based on "active projects") is an intellectually formidable, but flawed and contrived,
parameter. The “Active Stock” has at least 3 different definitions between the JLL and Genesis reports,
and in some cases this "active" stock/ projects may actually be contradictory to what it is purporting to
measure.
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Consider, for example, the sales data of two companies A & B in Figure
launched one project A1 in 2006 First Quarter, while company B has launched 4 projects B1 (in 2006
Quarter 1), B2 (in 2007 Quarter 1), B3 (2008 Quarter 2), and B4 (2009 Quarter 1). Company A sells
only 620 units over the time period 2006 to 2009, and thus is holding an unsold inventory
at the end of 2009 Fourth Quarter. Company B has sold out each of the 4 projects B1, B2, B3 and B4
within the same calendar year of each project's launch. At the end of 4 years company B has sold out all
the 4000 launched units, and is holding
The total market by unit sales volume in the example above is 620 + 4000 = 4620 units, out of which
the share of Company A is 620/4620, i.e 14% while that of Company B is 4000/4620, i.e. 86%..
It is now relevant to ask as to how do the JLL
market shares?
Figure 1
the sales data of two companies A & B in Figure 1 above. Company A has
First Quarter, while company B has launched 4 projects B1 (in 2006
Quarter 1), B2 (in 2007 Quarter 1), B3 (2008 Quarter 2), and B4 (2009 Quarter 1). Company A sells
only 620 units over the time period 2006 to 2009, and thus is holding an unsold inventory
at the end of 2009 Fourth Quarter. Company B has sold out each of the 4 projects B1, B2, B3 and B4
within the same calendar year of each project's launch. At the end of 4 years company B has sold out all
the 4000 launched units, and is holding 0 inventory.
The total market by unit sales volume in the example above is 620 + 4000 = 4620 units, out of which
the share of Company A is 620/4620, i.e 14% while that of Company B is 4000/4620, i.e. 86%..
It is now relevant to ask as to how do the JLL and Genesis definitions of “Active Stock”
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above. Company A has
First Quarter, while company B has launched 4 projects B1 (in 2006
Quarter 1), B2 (in 2007 Quarter 1), B3 (2008 Quarter 2), and B4 (2009 Quarter 1). Company A sells
only 620 units over the time period 2006 to 2009, and thus is holding an unsold inventory of 380 units
at the end of 2009 Fourth Quarter. Company B has sold out each of the 4 projects B1, B2, B3 and B4
within the same calendar year of each project's launch. At the end of 4 years company B has sold out all
The total market by unit sales volume in the example above is 620 + 4000 = 4620 units, out of which
the share of Company A is 620/4620, i.e 14% while that of Company B is 4000/4620, i.e. 86%..
“Active Stock” represent these
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Definition 1 -
JLL1
JLL Report
March 2011 –
page 23
Active Stock: A project which has been formally launched and
has units available for primary sale (still with developer) at the
end of a particular year is considered active during that year.
Active stock is the total number of units in active projects at the
end of a particular quarter/year.
Definition 2 –
JLL2
Genesis Report –
March 2011 –
page 19
74. In a second report, JLL calculated market share based on the
estimated value of active stock.
74.1 Therefore the way the active stock for a year is calculated is
that if the project is not completely sold out, all the units of the
project are included as active stock. If a project is launched in a
given year, and is sold out completely in the same year, it is still
considered to be an active project for the year and the total
number of units of the project is reflected in its market share for
the year. Therefore, all developments including the ones which
are completely sold out in the year of its launch get picked up by
market share calculations using this method.
Definition 3 -
Genesis
Genesis Report –
March 2011 –
page 20
74.5 JLL's methodology is a valid approximation of the market
share. However, in the methodology adopted, if an active project
continues to be active in the subsequent year/years, the units
thereof would be repeated in the subsequent year/years during
which the projects remain active. In order to consider the effect
of such duplication, we requested JLLS to calculate the market
share on basis of the data of all four years 2007-2010 by taking
the units of the active projects, only once, though the projects
may have remained active in more than one year, so as to avoid
duplication.
There a footnote (number 29) to this definition in the Genesis
report, that says "However, we were unable to audit the result
obtained by this exercise due to reasons of confidentiality."
Based on these 3 definitions in the JLL and Genesis reports, the calculations of "active stocks" for
companies A & B would be as in Figure 2.
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Figure 2
Thus, the market shares calculated for Companies A & B based on the three definitions JLL1, JLL2,
and Genesis, would be as in Figure 3
Figure 3
Keeping in mind that the actual market shares over 4 years of A are 14% and of B 86%, it can be seen
that
• the original definition of JLL, i.e., Definition 1 (JLL1), shows that A's market share is 100%
while that of B is 0% for all the four years !
• The second definition of JLL, Definition 2 (JLL 2), shows that the market share of companies A
and B as being 50% each for all four years.
Nothing could be farther from the truth.
Thus, the various versions of "Active Stock" used by JLL as a proxy for the "market share" as
enunciated in Section 19 (4) (a) the CCI Act of 2002 are wrong and misleading. Paucity of data should
not be an excuse for creating loaded and biased metrics.
The definition of Genesis is reasonably closer to the market share, but it is based on misleading data
and biased analysis provided by JLL to Genesis, as discussed in the next section.
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c. Misrepresentation of Accuracy of Data In JLL’s “Active Stock” (Market Share) Calculations
Not only are the calculations by JLL in both its reports completely divorced from reality, they are based
on data that has been presented in an intellectually dishonest way. For example JLL in its first report of
March 2011, on pages 15 and 17 states,
• In 2007 the total active stock in the residential market was 24,997 units. Out of this Unitech had
a market share of 14.71% ….
• In 2008 the total active stock in the residential market was at 37,846 units. Out of this DLF had
a market share of 11.8%
• At the end of 2010, the total active stock of Gurgaon has grown to 54,205 units of residential
apartments across categories.
• During the year 2007, the active stock of luxury residential market in Gurgaon was at 9,974
units. … Unitech had the largest market share accounting for 25.82% followed by Emaar MGF
at 18.06% ….
The accuracy of numbers like 24,997, 37,846, 54,205, 9,974 etc, and percentage significant to the
second decimal value like 14.71%, 11.8%, 25.82%, 18.06% without pointing out to the % error
possible in these numbers is intellectually dishonest. Nowhere in the report are the possible errors in
these numbers explained. Worse, as Genesis writes in footnote 29 of its report, the underlying data
was not even shared with them by JLL for reasons of "confidentiality" !
We fail to understand what was confidential about the data.
In any case, the claim that JLL could accurately find the “Active Stock” data, but not the sales data is
specious. As Genesis writes in its report (page vi) "We understand that JLL was not able to calculate
market shares on sales directly due to lack of definitive data on sales during any period. Developers and
their agents were also unwilling to disclose how many units were unsold at any point of time – JLL
could merely determine whether the development was sold out or not." No further explanation is
given about how JLL determines when an active project ceases to be active, i.e.
1. Within how many days, week, or months is JLL's data accurate about cessation of the project
being active? Even an inaccuracy of 15 days in the date of deciding when a project is no longer
active can dramatically change the market share results, especially in JLL's Definition 1.
2. What percentage of units have to be sold by developer before JLL considers it to be no longer
active? 75%? 80%? 99% ? 99.99% ? 100% ? What about a 500 unit project having 5 unsold
units after the 1st calendar year of its launch for the remaining 4 years – will the active stock of
it be 2000 units over 4 years?
3. What is the reliability of the sources of JLL about this cessation data given that developers and
their agents are generally unwilling to share sales data?
4. Some builders have a deliberate strategy to sell only a part of the project in the beginning, and
then sell it in phases over many years, at ever increasing prices, as they inch towards
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completion. This is especially true of builders who have small land-banks and may not have
more land to launch another project after successfully completing the current project. Thus,
instead of launching one project after another like developers with large land-banks, smaller
developers may launch one phase after another within the same project. How was this
addressed by JLL?
Given that there are so many potential errors in the data, unless JLL's “Active Stock” data can be
audited and verified, all such data and any analysis based on it must be thrown out with prejudice.
d. Misrepresentation of Continuous Reality by Discrete Temporal Snapshots in Jones Lang LaSalle (JLL) & Genesis Models
In addition to severe problems with the data on which JLL and Genesis have based their reports, there
is also a major problem with the model and how both JLL and Genesis calculate market shares on a
year-to-year basis.
Given the fact that the time period from when an apartment is booked to the time it is completed (4 to 5
years) is almost the same as the time period of the current studies (2006 - 2010), taking momentary and
discrete snapshots in time for market share is fraught with errors like the notion of “Active Stock”
clearly shows.
The major problem with calculation of market share based on “Active Stock” is that it takes a snapshot
of the market during a very small period of time. You cannot rest content with the arbitrary digital
snapshots in temporal space, but have to study the analog sweep of time in the marketplace. Thus, we
must study the market as it grows, not study some isolated moments divorced from the past and the
future.
e. Limitations of the JLL and Genesis Data & Models
The approaches taken by JLL and Genesis in their reports of March 2011 are erroneous and misleading.
Neither can the data of JLL be relied on, nor can the methodology of JLL and Genesis be relied upon.
• The reports of JLL and Genesis present a completely wrong and misleading concept of market
share by basing their analysis on the "Active Project" and "Active Stock" notion.
• The data on which “Active Stock” calculations are done for market share is suspicious, and is
presented with a façade of accuracy that is not possible because of the very opaque nature of the
property market, and the inherent difficulty (almost impossibility) of collecting the “Active
Stock” data accurately. The fact that the underlying data provided by JLL has not been audited
or verified, nor shared by JLL with anyone (even with Genesis who were tasked with writing a
report based on it!), gives the impression that the data has been fabricated and contrived.
• The model of taking arbitrary "market share" snapshots on a yearly basis without regard to the
long and multi-year process by which apartments are marketed, booked, constructed,
completed, and possession handed over, is erroneous. Also, the arbitrary snapshots in time are
limited views, without context of the past and future of the marketplace. Further, by narrowly
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defining "market share" as newly "launched projects" from year-to-year, and ignoring the
"completed projects" market share over the years, JLL & Genesis give a partisan picture of the
market share.
• As we shall show in a later section, all these errors lead JLL and Genesis to use the wrong
quantitative criteria about "Luxury" in Gurgaon – they claim it to be Rs 4000 psf or Rs 80 lakhs
(assuming a normal luxury apartment will have a size of about 2000 sq.ft).
• Most importantly, the models of JLL and Genesis bias the study by ignoring the importance
commercial property has in influencing the purchase decision of a residential property. This is
done by asking the wrong rhetorical question about "substitutability" of commercial vs.
residential properties (page 10 para 29 of the Genesis report), and then summarily ignoring the
commercial market by glibly concluding that commercial property is not substitutable with
residential property. This wrong way of looking at the commercial property and residential
property relationship leads both JLL and Genesis to conveniently ignore the role commercial
property plays in the decision of buying residential property, and consequently leads them to
underplay the importance of Gurgaon being the Relevant Geographic Market.
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4. Relevant Geographic Market
For most buyers wanting to invest in the DLF brand and its market strength, especially their dominance
in office and retail space market, the only option is to invest in the residential properties and it cannot
be in the commercial properties. Because, DLF as a business strategy, has pioneered the concept of
"Leased Grade A Office" spaces (see Figure 4), and does not sell a large part of its commercial
properties.
Figure 4 From www.dlf.in – accessed on May 01, 2011
DLF does sell the residential properties that it builds in the vicinity of these leased commercial spaces.
It is also well known that people like to live in reasonable proximity of where they work, or where they
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think the tenant of their apartment will most probably work, or where they think the eventual buyer of
their residential investment might be working.
Majority of the commercial office and retail spaces built by DLF in the NCR region, are located
specifically in Gurgaon. They are not homogeneously spread over the National Capital Region but
concentrated in Gurgaon. DLF Cyber City in Gurgaon itself may have close to 20 million square feet of
DLF's Grade A office space (page 2 of the DLF Red Herring Prospectus) providing a working space for
over 2 lakh high paying jobs. In addition to office buildings in Cyber City, DLF has many other
commercial office spaces in Gurgaon. For perspective of the magnitude of DLF office space holdings,
it must be noted that the total population of Gurgaon, from the lowly rickshaw puller to the jet-setting
CEO, is estimated to be around 20 lakhs.
A corporate presentation by DLF dated Jan 2011 (See Figure 5) shows that of DLF's total 56 million
sq.ft of under-construction office space in Q3 2011 over 22 million sqft of office space development is
in Gurgaon itself – which is almost 40 % of the total commercial properties being developed by DLF
all over India. For context, DLF has presence in over 30 Indian Cities (See Figure 6). This underscores
the importance of Gurgaon to DLF.
Figure 5: From DLF Analyst Presentation Q3 FY 11
From the buyer's perspective, the attraction to buy in Gurgaon, in the proximity of the office spaces is,
thus, very high. Many people working in Gurgaon would find South Delhi too expensive and Noida too
far away for comfort. Majority of them will want to buy something in Gurgaon itself. The buying
decisions amongst various regions of NCR are also influenced by factors like:
a. law & order issues,
b. quantum of investment required, and
c. proximity to airport or railway stations etc,
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which are very different amongst Noida, Faridabad, Ghaziabad, Greater Noida, Delhi and
Gurgaon. Further, the nature of property ownership is also different - e.g. properties in Gurgaon
are sold as freehold, whereas in Noida it is leasehold.
Figure 6: From www.dlf.in – accessed on May 01, 2011
From the builders & developers perspective, there are some local advantages that builders &
developers have in certain regions of NCR which are not available to them in the other regions. The
advantages for different builders vary as they move from Noida to Ghaziabad to Delhi to Faridabad to
Gurgaon. To naively imagine that any entity has similar strengths in all regions or places of NCR is
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likely to be a wrong assumption, and buyers would be very well aware of the relative strengths and
weaknesses of the respective builders in different regions like
a. Existing Land Banks,
b. Ability to Manage Local Administrations,
c. Favorable Political Equations and
d. Track Record of Completed Projects.
DLF is the founder of New Gurgaon, and it has special strengths in this geographic market. To any
investor wanting to invest in Gurgaon, the first question is whether to buy a DLF or non-DLF property.
And to any buyer wanting to invest in DLF the question is where in Gurgaon – not where in NCR.
Figure 7 shows the DLF residential and commercial properties in Gurgaon on a Map. The Green pins
indicate DLF's commercial property & the red pins indicate a residential property. It can be seen from
the map that the DLF Land banks are close to the Delhi border, and have the residential properties
located in the orbit of the commercial properties.
Figure 7: Approx Map of Commercial Properties & Residential Properties of DLF in Gurgaon with
DLF City (3000 acres) very roughly outlined, and DLF's New Gurgaon (4000 acres) shown in the
horizon near Manesar. This view is as if looking from a plane in Delhi heading to Jaipur, flying over
the central artery of Gurgaon, i.e. the National Highway-8.
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JLL and Genesis reports have wrongly ignored the importance of commercial spaces during the
decision making process of a buyer, by raising a misleading rhetorical question and then summarily
dismissing it. Genesis in its report on page 10, Section 3.1.1, asks "Is residential property separate from
commercial property?" Paras 29 & 30 go on to say, "From a demand perspective, a buyer or renter in
India would not view commercial and residential properties as substitutable (emphasis added) … It is
reasonable to conclude that these markets are sufficiently differentiated such that they should constitute
separate product markets."
The issue of commercial property is wrongly framed by Genesis as whether a buyer in the market
considers buying commercial space "substitutable" with buying residential space. Substitutable
means that a buyer can buy one or the other. And it is surprising that Genesis poses this question of
“substitutability” in the DLF context because DLF rarely sells its commercial spaces. In fact DLF has
pioneered the leasing of “Grade A Commercial Space,” and does not sell them. So, for someone
wanting to invest in the DLF brand and its strengths, there are negligible options for investing in the
"commercial properties” of DLF. The only choice is to invest in residential properties of DLF, many of
which are around these commercial properties of DLF.
It would be more appropriate to frame the commercial property versus residential property issue as
whether they are complementary or synergistic, i.e., does presence of commercial property in a
neighborhood increase the demand of residential properties too? The obvious answer is yes.
It can be safely concluded, for the reasons stated above, that the Relevant Geographic Market for the
study in Cases 18 & 19 of 2010 (DLF Park Place Resident's Welfare Association & Belaire Owners
Association) is Gurgaon.
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5. Relevant Product Market
The petition (Cases 18 & 19 of 2010) has been brought to the august Commission by the owners of
DLF Belaire & Park Place Apartments. The product in question are the services provided by the builder
to build an apartment, specifically the DLF Belaire and DLF Park Place apartments located in Gurgaon.
• The DLF Belaire and DLF Park Place property has been identified by DLF in their Corporate
Presentation (May 2008-2009) and on their website (as shown in Figure 8) as falling in the
Luxury category, and in the same presentation DLF defines super-luxury properties as those
which fall above the price point of Rs 35,000 Per sq.ft.
Figure 8: From www.dlf.in – accessed on May 01, 2011
• The current effective market price (inclusive of car parking and all additional charges) as of
March end 2011 of DLF Belaire is around Rs 9000 psf, and DLF Park Place also commands a
similar price per sq.ft in the current market.
• The Director General's Report (Report of Director General in Case of DLF Belaire – Vol I of III
– Case No. 19 of 2010 Page 58, Section 5.4.6) also mentions the relevant product as high-end
property costing in excess of Rs 200 - 250 lakhs.
• JLL and Genesis also accept that the relevant market is "Luxury" and have done market share analysis using this criterion.
Though qualitatively all are in agreement about the relevant market being "Luxury," JLL and Genesis
quantitatively define the "Luxury category" as anything above Rs 80 lakhs, or Rs 4000 psf (assuming
an apartment size of about 2000 sq.ft). The DG report defines high end or luxury as something costing
over 200-250 lakhs.
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We undertook a comprehensive study to collect the data about all high rises in Gurgaon, and to analyze
the data for identifying the segments of affordable, mid-income, luxury, and super-luxury
(segmentation as per various corporate presentations of DLF) in Gurgaon.
The aim was to identify what could reasonably be considered as Luxury based on the price. It is
accepted by Genesis (on page no. 13, para 44), “We believe, on the basis of our discussion with JLL
and DLF, the most effective and most workable indicator of whether a residential property
should have luxury status is price.” We, in this report, have used PRICE as our working parameter
for identifying “Luxury Properties,” despite the fact that luxury involves other parameters like
‘amenities’, ‘location’ or ‘size’.
f. Data Collection & Creative Commons License
The procedures of collection of data in Indian real estate market are not well established, and much of
the data is hard to collect because of the very nature of the ways transactions happen. This has been
noted by both the JLL and Genesis reports, and is reiterated by us. But, there is specific data that can be
collected with a reasonable accuracy.
The data includes
1. Name of Builder,
2. Name of Project
3. Launch Year of the project
4. Completion Year of the project
5. Approximate Number of Apartments in the Project
6. Common Sizes (sq.ft) of Apartments (or Configurations)
7. Current Approximate Market Price (in Rs or Rs psf) as in March-end 2011.
We have a fairly comprehensive list of high rise apartments offered by Private builders like DLF,
Unitech, and Ansals in Gurgaon, launched in the time period from 1990 onwards till last quarter of
2010. Unlike JLL which has hidden its data under a cloak of confidentiality even from Genesis, we are
making this data available under the Creative Commons License Attribution-NonCommercial
http://creativecommons.org/licenses/ (This license lets others remix, tweak, and build upon our work
non-commercially, and although their new works must also acknowledge us and be non-commercial,
they don’t have to license their derivative works on the same terms.) Any non-commercial usage should
be attributed to www.QuBREX.com
The List of Group Housing projects by Private Builders like DLF, Ansals, and Unitech etc. is attached
in Appendix A.
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g. Accuracy of Data & Information Collected
As with any large scale exercise of data collection, and especially with so many developers and
brokers not easily sharing data, there are some parameters that are pretty accurate and some that are
approximations in Appendix A. The approximations and minor inaccuracies in the data should not have
any major effect on the conclusions that are drawn from the data.
1. Name of builder - Accurate
2. Name of project - Accurate
3. Launch Year of project (as there are pre-launches, soft launches, launches by invitation and hard launches, so the launch dates may have error of a few months plus or minus). In case of
multiple phases, or in some cases re-launches, the errors in months of assigning a single date to
the project may be larger.
4. Completion Year of project – As possession is offered in phases, there might be an error of
few months plus or minus.
5. Total Number of Apartments (As sometimes they might have been calculated based on the
floor plans and the site layouts, the accuracy may be off by tens of apartments in larger
complexes).
6. Common Sizes (sq.ft) of Apartments (or Configurations) – We chose a set of configurations
(area in sq.ft of the various options like 2BR, 2BR+Study, 3BR, 3BR+SQ, etc) that represented
almost all price points in the project at which an apartment could typically be purchased. We
collected data on the common apartment sizes available in that projects so that the actual cost to
a buyer could be calculated for the actual options (i.e. 2BR, 2BR+Study, 3BR, 3BR + SQ, 4BR
etc) that a buyer would encounter while buying into that project.
7. Current Prices as of March 2011 - These are generally the market averages, and options a
little higher and little lower may be found in the market.
8. The Equally Weighted Average Number of Apartments by Configuration While we were
able to improve upon just low-high range of prices by getting the actual discrete prices, we were
not able to collect the breakdown of the number of apartments according to each configuration
in the project. It is a tedious and a very time consuming process of finding out, how many
apartments are 2BR, 3BR, etc but is doable for anyone interested in conducting this exercise.
So, we had to make an approximation about the number of apartments per configuration. We
knew the total number of apartments in the project, and then we made the assumption that each
configuration has the same number of apartments – i.e. if the total number of apartments was
1000, and there were 4 configurations (2BR, 3BR, 4BR, 5BR), then the number of apartments
in each configuration was one-fourth, i.e. 250. This exercise was necessary to be able to
calculate the market share by both the capital value and the number of apartments.
9. The Effective Market Price in Rs psf was calculated by dividing the Market Price of the
apartment in Rs by its area in sq.ft., where the Market Price includes Basic Sales Price +
EDC/IDC + Parking Charges + Club Membership + other charges as payable.
10. The Effective Market Value of Builders Project By Configuration (Rs crore) was calculated
by multiplying the Market Price of the apartment by the number of apartments for that
configuration.
www.QuBREX.com Page 19 of 78
h. Definition of Luxury Product in Relevant Geographic market
We first plotted all the 420 configurations in Appendix A in ascending order of the Effective Market
Price in Rs psf in Figures 9 & 10. This was done for all options available in 2006 and for all options
available in 2010 in Figure 9 & 10 respectively.
Figure 9
Figure 10
www.QuBREX.com Page 20 of 78
It can be easily seen that in 2006 only 3 options (with an effective market price of Rs 4000 psf or
less as in March 2011) were available in all of Gurgaon out of a total of 207 options. In 2010 the total
number of options had increased to 420 and the options of effective market price below Rs 4000 psf
had also increased to 99. This increase in options of apartment configurations below Rs 4000 psf
happened after 2007 because on Feburary 05, 2007 the new Masterplan of Gurgaon Urban Complex
2021 was notified and many new sectors were brought under the ambit of R-Zone. It was possible to
launch low price residential options in these newer sectors (Sector 58 onwards, and including Sectors
37 C & D) because these newer sectors have low priced land compared to the Sectors 1 to 57 (which
includes DLF City, Ansal's Sushant Lok, Unitech's South City etc). These newer sectors also have no
urban infrastructure, no roads, no sewerage, no electricity, no schools, no hospitals, no malls, etc.
Table 1 below shows that the number options that have a current market value of Rs 4000 psf in
Gurgaon were 3 in 2006, 19 in 2007, 67 in 2008, 77 in 2009, and 99 in 2010. This represents only 1.4%
of the total options in 2006, 8.1% of the options in 2007, 22.7% of the options in 2008, 21.4% of the
options in 2009, and 23.5% of the options in 2010. Thus, if the JLL and Genesis contention that
everything above Rs 4000 psf is to be considered a luxury apartment is to be believed, then 98.6%
of all the options available to a buyer in 2006 were falling in the "luxury" segment. Or that 91.9%
in 2007, or 77.3% in 2006, 78.6% in 2009 and 76.4% of all the available options in 2010 fell in the
luxury category in Gurgaon. This is of course not right. One would expect the affordable, normal,
and mid-income range of the housing to dominate the market place, and luxury to be a small
subset of the whole market. Table 2 shows the options in Table 1 as percentages of total
availability.
Table 1: Price points are at current market value as of Mar 2011.
Table 2: Price points are at current market value as of Mar 2011.
In the Tables 1 & 2 we have also shown the number and % of apartment configurations, during the
years 2006 to 2010, that were available then and have an Effective Market Price today of less than Rs
7000 psf and Rs 8000 psf. The same data is shown in Figure 11.
www.QuBREX.com Page 21 of 78
Figure 11
In 2006 when the owners of the luxury apartments DLF Park Place & DLF Belaire purchased their
apartments, only 3 out of 207 options were available below the price point of Rs 4000 psf. It would be
wrong to claim that only 3 options in 2006 fell in the affordable, normal, and mid-income housing
category while 204 options were falling in the luxury category, but that is exactly what choosing Rs
4000 psf as the price point for starting of the luxury options in Gurgaon by JLL and Genesis implies.
Another reason why Rs 4000 psf cannot be considered as the starting point for luxury apartments is
because the circle rate or Collector's Rate in March 2011 for Group Housing Societies by private
builders like DLF, Ansals, Unitech etc is Rs 4000 psf. (http://gurgaon.gov.in/sro_ggn_apr2011.htm as
accessed on April 01, 20011). So if the Govt. Authority has the lowest rate as Rs 4000 psf in Gurgaon
for multistory apartments, this could be considered as the starting price for affordable and mid-income
housing and cannot be, in any case, the price of luxury housing. The price of Rs 4000 psf is where we
could assume affordable, normal, and mid-income housing to start.
Thus, the notion of JLL and Genesis as taking Rs 4000 psf, (or Rs 80 lakhs for a typical 2000 sq.ft
apartment) as Luxury in Gurgaon is not only wrong but also illogical. In fact, based on the circle rates
and actual options available in Gurgaon, the price of Rs 4000 psf may be taken as the starting point for
affordable, normal, and mid-income housing.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2006 2007 2008 2009 2010
Percentage of Options Available
Yearwise For Various Price Points in All
of Gurgaon
less than Rs 4000 psf
less than Rs 7000 psf
less than Rs 8000 psf
www.QuBREX.com Page 22 of 78
What then should be the starting point for Luxury? We believe a reasonable answer is provided in the
Genesis report on Page 14, para 45, where Genesis states that "an own-use buyer of normal
residential properly is unlikely to consider luxury residential properly as substitutable as prices
can be more than DOUBLE (emphasis added), with significant implications for affordability." Using the metric that the luxury housing prices are atleast double that of normal housing, we could
state that the luxury housing prices in Gurgaon should be atleast double of Rs 4000 psf, i.e Rs 8000 psf,
and atleast double of Rs 80 lakhs, i.e 160 lakhs. This tallies well with the segmentation as described in
the DLF Corporate presentation (May 2008-2009) where it is mentioned that DLF Belaire falls in the
Luxury category - the effective market price of DLF Belaire in Mar 2011 was around Rs 9000 psf,
while the total value of the smallest apartment size of about 2900 sq.ft would be (approx.) Rs 286
lakhs. Similarly, the price of DLF Park Place is approx. Rs. 9000 psf and the total value of the smallest
apartment size of about 1850 sq.ft. would be (approx.) Rs. 166 lakhs. The Director General's Report
also mentions Luxury being above the price range of Rs 200-250 lakhs.
Thus, we can safely consider “Luxury Apartments” as those that have an effective market price in
excess of Rs 8000 psf. For the purpose of this report, we have been a little more conservative and
have decided to set Rs 7000 psf as the lower price limit for the “Luxury Apartments.”
i. Luxury Market Share (i.e., above Rs 7000 psf) of Various Builders Over The Years
Market share analysis based on the number of properties that are currently valued more than Rs 7000
psf for DLF and other builders has been done.
The market share analysis has done for both
• Completed properties and
• Launched properties (which includes new launches, under construction property, and
completed property)
and has been done on basis of the
• Total Number of apartments completed or launched and
• Total capital value of apartments completed or launched (at current Market Price as of
March 2011)
Every completed property was launched at some time, but every launched property has not yet been
completed. Thus, the completed properties are a subset of the launched properties. Completed
properties are a track record of the builder, and is one of the major factors that a buyer in the residential
market considers. In some way, every completed apartment is a de facto sample flat for any project that
the builder may launch in the future. It may be said that the completed properties strongly influence the
consumer preferences in purchasing.
www.QuBREX.com Page 23 of 78
An analysis of the launched properties is also necessary to capture the new entrants in the Residential
Market, and also to look at the medium-term future of the market shares. But, every launched property
may not be completed, or may be completed after delays from the promised completion time.
We present market shares of both completed and launched properties (which includes new launches,
under construction property, and completed property).
• By Number of Apartments: Market shares have been calculated on the basis of number of
apartments, by determining the luxury configurations (2BR, 2BR + S, 3BR, 3BR+SQ etc)
which have and effective price more than Rs 7000 psf. The number of apartments of an eligible
configuration was calculated by equally weighting all the configurations in the project as
described in a previous section.
• By Capital Value of Apartments: Market shares have also been calculated based on the
capital value of apartments, by multiplying the number of apartments of a certain
configuration by the total market value of that apartment and then finding the percentage of the
total market's capital value.
The following is the list of charts for Market Shares for Luxury Apartments (costing in excess of Rs
7000 psf).
1. Market Share by Number of Apartments Completed by 2006
2. Market Share by Number of Apartments Completed by 2007
3. Market Share by Number of Apartments Completed by 2008
4. Market Share by Number of Apartments Completed by 2009
5. Market Share by Number of Apartments Completed by 2010
6. Market Share by Capital Value of Apartments Completed by 2006
7. Market Share by Capital Value of Apartments Completed by 2007
8. Market Share by Capital Value of Apartments Completed by 2008
9. Market Share by Capital Value of Apartments Completed by 2009
10. Market Share by Capital Value of Apartments Completed by 2010
11. Market Share by Number of Apartments Launched by 2006
12. Market Share by Number of Apartments Launched by 2007
13. Market Share by Number of Apartments Launched by 2008
14. Market Share by Number of Apartments Launched by 2009
15. Market Share by Number of Apartments Launched by 2010
16. Market Share by Capital Value of Apartments Launched by 2006
17. Market Share by Capital Value of Apartments Launched by 2007
18. Market Share by Capital Value of Apartments Launched by 2008
19. Market Share by Capital Value of Apartments Launched by 2009
20. Market Share by Capital Value of Apartments Launched by 2010
www.QuBREX.com Page 24 of 78
i. Market Share By Completed Properties
Based on Data in Appendix A, we have calculated the various market shares of the builders over the
years, by both the number of apartments completed and the capital value of the apartments completed.
As can be seen from Figure 12 below, in the years 2008 & 2010 no apartments with effective price in
excess of Rs 7000 psf were completed. Hence, the market shares were the same in 2007 & 2008 and
2009 & 2010.
Figure 12
0 500 1000 1500 2000 2500 3000
1998
2000
2001
2002
2003
2004
2006
2007
2009
Number of Luxury Apartments (Rs 7000+ psf)
Completed By Year
www.QuBREX.com Page 25 of 78
1. Market Share by Number of Apartments Completed by 2006
Figure 13
59.84%
23.08%
4.32%
3.93%
3.34%
2.98%
2.51%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Ansal
Mahindra Gesco
Ambience
Vipul
ITC
Market Share of Luxury Apartments (Rs 7000+ psf)
by Number of Apartments Completed By 2006
www.QuBREX.com Page 26 of 78
2. Market Share by Number of Apartments Completed by 2007
Figure 14
58.39%
20.84%
7.38%
3.46%
3.16%
2.68%
2.07%
2.02%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Vipul
Ansal
Mahindra Gesco
Ambience
Vatika
ITC
Market Share of Luxury Apartments (Rs 7000+ psf)
by Number of Apartments Completed By 2007
www.QuBREX.com Page 27 of 78
3. Market Share by Number of Apartments Completed by 2008
Figure 15
58.39%
20.84%
7.38%
3.46%
3.16%
2.68%
2.07%
2.02%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Vipul
Ansal
Mahindra Gesco
Ambience
Vatika
ITC
Market Share of Luxury Apartments (Rs 7000+ psf)
by Number of Apartments Completed By 2008
www.QuBREX.com Page 28 of 78
4. Market Share by Number of Apartments Completed by 2009
Figure 16
55.05%
21.74%
8.97%
3.17%
2.89%
2.45%
2.00%
1.89%
1.84%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Vipul
Ansal
Mahindra Gesco
Ambience
Raheja (Saket)
Vatika
ITC
Market Share of Luxury Apartments (Rs 7000+ psf)
by Number of Apartments Completed By 2009
www.QuBREX.com Page 29 of 78
5. Market Share by Number of Apartments Completed by 2010
Figure 17
55.05%
21.74%
8.97%
3.17%
2.89%
2.45%
2.00%
1.89%
1.84%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Vipul
Ansal
Mahindra Gesco
Ambience
Raheja (Saket)
Vatika
ITC
Market Share of Luxury Apartments (Rs 7000+ psf)
by Number of Apartments Completed By 2010
www.QuBREX.com Page 30 of 78
6. Market Share by Capital Value of Apartments Completed by 2006
Figure 18
54.09%
20.61%
7.26%
6.20%
5.97%
3.82%
2.06%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
ITC
Mahindra Gesco
Ambience
Vipul
Ansal
Market Share of Luxury Apartments (Rs 7000+ psf)
by Capital Value of Apartments Completed By 2006
www.QuBREX.com Page 31 of 78
7. Market Share by Capital Value of Apartments Completed by 2007
Figure 19
62.62%
16.29%
5.78%
4.76%
4.06%
3.92%
1.35%
1.23%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Vipul
ITC
Mahindra Gesco
Ambience
Ansal
Vatika
Market Share of Luxury Apartments (Rs 7000+ psf)
by Capital Value of Apartments Completed By 2007
www.QuBREX.com Page 32 of 78
8. Market Share by Capital Value of Apartments Completed by 2008
Figure 20
62.62%
16.29%
5.78%
4.76%
4.06%
3.92%
1.35%
1.23%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Vipul
ITC
Mahindra Gesco
Ambience
Ansal
Vatika
Market Share of Luxury Apartments (Rs 7000+ psf)
by Capital Value of Apartments Completed By 2008
www.QuBREX.com Page 33 of 78
9. Market Share by Capital Value of Apartments Completed by 2009
Figure 21
57.01%
19.37%
8.00%
4.16%
3.55%
3.42%
2.22%
1.18%
1.07%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Vipul
ITC
Mahindra Gesco
Ambience
Raheja (Saket)
Ansal
Vatika
Market Share of Luxury Apartments (Rs 7000+ psf)
by Capital Value of Apartments Completed By 2009
www.QuBREX.com Page 34 of 78
10. Market Share by Capital Value of Apartments Completed by 2010
Figure 22
57.01%
19.37%
8.00%
4.16%
3.55%
3.42%
2.22%
1.18%
1.07%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Vipul
ITC
Mahindra Gesco
Ambience
Raheja (Saket)
Ansal
Vatika
Market Share of Luxury Apartments (Rs 7000+ psf)
by Capital Value of Apartments Completed By 2010
www.QuBREX.com Page 35 of 78
ii. Market Share By Launched (Incl. new launches, under construction property, and completed)
Properties
We have also done the market share calculations based on all the Launched properties (which includes
new launches, under construction property, and completed property). Not all launched projects
have yet been completed, so there are many more builders compared to analysis of Completed
Properties, and also the new entrants in the Gurgaon Market will show up in these market share
calculations.
As can be seen from Figure 23 below, no Luxury Apartments that cost more than Rs 7000 psf were
launched in 2007, hence the market share in 2006 & 2007 were the same.
Figure 23
0 500 1000 1500 2000 2500 3000 3500
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2008
2009
2010
Number of Luxury Apartments (Rs 7000+ psf) Launched
By Year
www.QuBREX.com Page 36 of 78
11. Market Share by Number of Apartments Launched by 2006
Figure 24
52.34%
16.85%
6.95%
4.30%
3.22%
2.46%
2.24%
1.98%
1.77%
1.55%
1.54%
1.47%
1.43%
1.06%
0.86%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Vipul
Parsvnath
Ambience
Ansal
Mahindra Gesco
MGF
Bestech
Raheja (Saket)
Emaar MGF
Vatika
ITC
Salcon
Silverglades
Market Share of Luxury Apartments (Rs 7000+ psf)
by Number of Apartments Launched (New, Under
Construction & Completed) By 2006
www.QuBREX.com Page 37 of 78
12. Market Share by Number of Apartments Launched by 2007
Figure 25
52.34%
16.85%
6.95%
4.30%
3.22%
2.46%
2.24%
1.98%
1.77%
1.55%
1.54%
1.47%
1.43%
1.06%
0.86%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Vipul
Parsvnath
Ambience
Ansal
Mahindra Gesco
MGF
Bestech
Raheja (Saket)
Emaar MGF
Vatika
ITC
Salcon
Silverglades
Market Share of Luxury Apartments (Rs 7000+ psf)
by Number of Apartments Launched (New, Under
Construction & Completed) By 2007
www.QuBREX.com Page 38 of 78
13. Market Share by Number of Apartments Launched by 2008
Figure 26
51.89%
16.38%
6.76%
4.18%
3.13%
2.39%
2.18%
1.93%
1.76%
1.72%
1.51%
1.50%
1.43%
1.39%
1.03%
0.83%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Vipul
Parsvnath
Ambience
Ansal
Mahindra Gesco
MGF
Tata Housing
Bestech
Raheja (Saket)
Emaar MGF
Vatika
ITC
Salcon
Silverglades
Market Share of Luxury Apartments (Rs 7000+ psf)
by Number of Apartments Launched (New, Under
Construction & Completed) By 2008
www.QuBREX.com Page 39 of 78
14. Market Share by Number of Apartments Launched by 2009
Figure 27
51.43%
15.11%
6.24%
4.19%
3.86%
2.89%
2.20%
2.01%
1.78%
1.63%
1.59%
1.39%
1.38%
1.32%
1.28%
0.95%
0.77%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Vipul
IREO
Parsvnath
Ambience
Ansal
Mahindra Gesco
MGF
Tata Housing
Bestech
Raheja (Saket)
Emaar MGF
Vatika
ITC
Salcon
Silverglades
Market Share of Luxury Apartments (Rs 7000+ psf)
by Number of Apartments Launched (New, Under
Construction & Completed) By 2009
www.QuBREX.com Page 40 of 78
15. Market Share by Number of Apartments Launched by 2010
Figure 28
49.49%
14.54%
6.00%
4.64%
3.71%
2.78%
2.60%
2.12%
1.93%
1.90%
1.71%
1.57%
1.53%
1.34%
1.27%
1.23%
0.91%
0.74%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Vipul
IREO
Parsvnath
Ambience
Emaar MGF
Ansal
Mahindra Gesco
M3M
MGF
Tata Housing
Bestech
Raheja (Saket)
Vatika
ITC
Salcon
Silverglades
Market Share of Luxury Apartments (Rs 7000+ psf)
by Number of Apartments Launched (New, Under
Construction & Completed) By 2010
www.QuBREX.com Page 41 of 78
16. Market Share by Capital Value of Apartments Launched by 2006
Figure 29
53.09%
12.60%
7.37%
5.21%
4.66%
2.71%
2.67%
2.31%
2.31%
1.57%
1.56%
1.45%
1.02%
0.77%
0.70%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Ambience
Vipul
Parsvnath
ITC
Salcon
Emaar MGF
Mahindra Gesco
Bestech
MGF
Raheja (Saket)
Silverglades
Ansal
Vatika
Market Share of Luxury Apartments (Rs 7000+ psf)
by Capital Value of Apartments Launched (New, Under
Construction & Completed) By 2006
www.QuBREX.com Page 42 of 78
17. Market Share by Capital Value of Apartments Launched by 2007
Figure 30
53.09%
12.60%
7.37%
5.21%
4.66%
2.71%
2.67%
2.31%
2.31%
1.57%
1.56%
1.45%
1.02%
0.77%
0.70%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Ambience
Vipul
Parsvnath
ITC
Salcon
Emaar MGF
Mahindra Gesco
Bestech
MGF
Raheja (Saket)
Silverglades
Ansal
Vatika
Market Share of Luxury Apartments (Rs 7000+ psf)
by Capital Value of Apartments Launched (New, Under
Construction & Completed) By 2007
www.QuBREX.com Page 43 of 78
18. Market Share by Capital Value of Apartments Launched by 2008
Figure 31
54.25%
11.89%
6.95%
4.92%
4.40%
2.56%
2.52%
2.18%
2.18%
1.48%
1.48%
1.47%
1.36%
0.97%
0.72%
0.66%
0% 20% 40% 60% 80% 100%
DLF
Unitech
Ambience
Vipul
Parsvnath
ITC
Salcon
Emaar MGF
Mahindra Gesco
Bestech
MGF
Tata Housing
Raheja (Saket)
Silverglades
Ansal
Vatika
Market Share of Luxury Apartments (Rs 7000+ psf)
by Capital Value of Apartments Launched (New, Under
Construction & Completed) By 2008
www.QuBREX.com Page 44 of 78
19. Market Share by Capital Value of Apartments Launched by 2009
Figure 32
53.98%
11.16%
6.53%
4.61%
4.13%
3.09%
2.40%
2.37%
2.05%
2.05%
1.39%
1.38%
1.38%
1.28%
0.91%
0.68%
0.62%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Ambience
Vipul
Parsvnath
IREO
ITC
Salcon
Emaar MGF
Mahindra Gesco
Bestech
MGF
Tata Housing
Raheja (Saket)
Silverglades
Ansal
Vatika
Market Share of Luxury Apartments (Rs 7000+ psf)
by Capital Value of Apartments Launched (New, Under
Construction & Completed) By 2009
www.QuBREX.com Page 45 of 78
20. Market Share by Capital Value of Apartments Launched by 2010
Figure 33
52.01%
10.75%
6.29%
4.44%
3.97%
3.21%
2.85%
2.55%
2.31%
2.28%
1.97%
1.34%
1.33%
1.33%
1.23%
0.87%
0.66%
0.60%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
DLF
Unitech
Ambience
Vipul
Parsvnath
IREO
Emaar MGF
M3M
ITC
Salcon
Mahindra Gesco
Bestech
MGF
Tata Housing
Raheja (Saket)
Silverglades
Ansal
Vatika
Market Share of Luxury Apartments (Rs 7000+ psf)
by Capital Value of Apartments Launched (New, Under
Construction & Completed) By 2010
www.QuBREX.com Page 46 of 78
j. Real Estate, Luxury, & Location
Based on all the Market Share Figures presented in this chapter, it is apparent that DLF was and is the
most dominant player in the Luxury Residential Market with its market share being in excess of 50%
no matter how you slice and dice the data.
A large part of the success of DLF in the residential market is due to its almost absolute dominance in
the commercial sector. This is an outcome of DLF's "walk to work" concept which as DLF says on its
website, it pioneered. By building world class office spaces that it does not sell but leases to top
companies, it creates a magnet in its land-banks, in and around which people desire to have a
residential property – whether for self use or investment. The proximity of over 3000 acres of its land
to the Delhi border is a plus, and combined with office spaces that draw companies out of Delhi into
Gurgaon, it creates a chain effect of drawing the employees of the companies to Gurgaon too. This is of
relevance to the commission as it comes under the Competition Act Section 19.6 (b), i.e. location
specific requirements.
The location, the proximity to commercial office and retail spaces, social infrastructure like the DLF
Golf course, and now with its own rapid metro, own flyovers, and even its own roads DLF is heading
to solidify its lock on Gurgaon.
In its corporate presentation of May 2008 on Integrated townships, DLF has disclosed that in addition
to the 3000 acres that it has in established Gurgaon, it has another 4000 acres of land that falls in the
region of "New Gurgaon," (see Figure 34) i.e. the new sectors of Gurgaon that were notified on
February 05, 2007 in the Gurgaon Manesar Urban Complex Masterplan 2021. Thus, DLF will have
atleast 7000 acres of land in Gurgaon, of which 4000 acres is a clean canvas on which it will create
another integrated township like the 3000 acre one in Gurgaon called the DLF City.
A large chunk of the upscale Gurgaon is morphing into a tight integrated city with DLF at its center and
helm. And this is by design, and one more step in the direction of DLF's pioneering activity – the
integrated township.
www.QuBREX.com Page 47 of 78
Figure 34: DLF's Corporate Presentation of May 2008 discloses its plans for New Gurgaon: A 4000
acres township falling in the new masterplan for Gurgaon, with all segments of residential, commercial,
and retail.
www.QuBREX.com Page 48 of 78
6. DLF's Pioneering “Walk to Work” Integrated Township of Gurgaon
DLF city is a part of DLF pioneering Integrated Township concept, as described on their website.
Figure 35: From www.dlf.in – Accessed on May 01, 20011
As DLF's website www.dlf.in says, DLF has the unique ability for "creating the right mix of high
quality housing, state-of-the-art offices, IT parks, world-class shopping malls, digital
entertainment, leisure and recreation, efficient infrastructure, schools, hospitals and other
community spaces like parks and clubs.
One of the lynchpins of the integrated township is the "walk to work" concept that DLF claims to have
pioneered. See Figure 36 which is a screen grab from DLF's website. It says that "DLF has pioneered
the "walk-to-work" concept in the 3000 acre DLF city where well planned residential developments are
integrated with modern businesses and commercial complexes." It is this integration of the
commercial and residential that is the key to DLF's astounding success, and hence very strange that JLL
and Genesis in their reports should discount DLF's strength in the commercial space as being relevant
to understanding DLF's dominance in the Gurgaon residential market.
www.QuBREX.com Page 49 of 78
Figure 36: From www.dlf.in – Accessed on May 01, 2011
www.QuBREX.com Page 50 of 78
The residential, commercial (office and retail) are inter-linked like nowhere else in the DLF integrated
township of Gurgaon. DLF has pioneered the retail revolution as the screen grab from their website
shows (see Figure 37), they have pioneered integrated townships, pioneered golf course living, and
pioneered Grade A office space leasing.
Figure 37: From www.dlf.in – accessed on May 01, 2011
www.QuBREX.com Page 51 of 78
DLF has pioneered many aspects of the real estate business in Gurgaon, which indicate its strength, and
its ability to almost act independently of what the competition may or may not do. Some of the
business practices pioneered by DLF that the commission may consider under Section 19.4 (m), i.e.
any other factor Commission may consider relevant for inquiry are
• Delay penalty – It is hard to pin down when this started, but Mr. TC Goyal, Managing Director
of DLF, during the launch of their project Express Greens (Manesar) at the DLF offices in Delhi
mentioned that the "Rs 5 per square feet per month" penalty was started by DLF. It was not
meant to penalize DLF or be looked as a penalty, but was just a good gesture on DLF's part to
make their own employees realize the cost of delay. Today of course, this Rs 5 per sq.ft penalty
is too paltry compared to the time-value of money from the buyer's point of view. This Rs 5 per
square feet per month penalty has found its way into the Buyers Agreement of every builder that
operates in Gurgaon.
• Early payment discount. This is different from the down payment discount that is given when
the buyer makes almost 90% of the payment towards an apartment within 30 days of booking
the apartment. Early payment was introduced by DLF during the launch of Express Greens
residential project in Manesar, and was 13% compared to 11% for the down payment discount.
In the early payment, the buyer could make any payment in advance before it was raised by
DLF, and DLF would pay 13% interest on it till the time the payment became due as part of the
construction-linked payment plan.
• Timely payment Discount – This is another innovation by DLF that has been copied by
builders like Emaar MGF. Here if a buyer were to make payments in a timely fashion, as and
when demanded, then towards the possession of the flat DLF would give a 5% discount on the
price at which the property was originally booked.
• Investor lock-in: In 2009, DLF came up with an innovative idea to keep out investors from
buying into their projects. DLF incorporated into the Buyers Agreement a clause that prevented
the buyer of the DLF property from selling the property for 1 year. This is market power that
few builders have. See Appendix B for a news item regarding this.
• ONE PAN one FLAT: DLF also decided that they did not want to sell more than one property
to a single buyer. So they instituted a check of the PAN number, and one PAN number was
eligible for buying only one flat. Other developers would be envious of such market power.
• SELLING BY invitation only: DLF pioneered the concept of “sale-by-invitation” for DLF
Aralias, its pioneering Golf course living project. In this concept you did not apply to buy an
apartment from the company, but the company reached out to you if they thought you were
deserving of living in the complex. DLF would invite you to buy into it. See Appendix for a
news item on the same.
• Forced resale back to company before registry of flat: In DLF Aralis and DLF Magnolias the
company restricts the resale of its apartments. If at any time you want to exit the project, before
the project is ready and registered in your name, the company forbids you to sell it in the open
www.QuBREX.com Page 52 of 78
market. The buyer had to surrender the apartment to DLF if they for any reason had to exit this
investment, and DLF would buy the same at a lower rate than what it was selling its apartments
for. No other developer in Gurgaon has been able to impose such onerous conditions on their
buyers. In addition to showing the market power, it also shows how DLF is able to restrict the
buying selling in the secondary market which should be of interest to the august Commission.
Even though Section 3.4 (e) is applicable to Combinations, the concept of "resale price
maintenance" can be investigated by the Commission under Section 19.4 (m).
www.QuBREX.com Page 53 of 78
7. DLF & Consumer Preferences
Consumer preferences in an important part of the Competition Act, and is referred to in Section 19.6
(g), and Section 19.7 (c). Consumer preferences are geography dependent, and also dependent on the
brand and market strength of an enterprise – until the enterprise turns on the consumers themselves.
Buyers of residential property want to be near the place of work (to be able to "walk to work"), want to
be near malls, near social infrastructure like clubs, and in general are very aware of location advantages
of any property that they invest in. To think buyers in DLF properties, or any builders properties are
location–agnostic as the JLL and Genesis reports suggest is wrong. The strength and its land bank of
the most prime land available that DLF holds in Gurgaon is an attraction to the buyers in selecting their
residential properties, as is the proximity to the commercial office spaces.
To have to buy far away from the place of work is to invoke costs in travelling, or transporting self, and
in terms of time expended. The commission can consider these issues under Section 19.6 (e) i.e.
transport cost.
In addition, the buyers of any residential property look to the past track record of the builder, and how
the completed properties of any builder are holding up. Buying a residential property is probably the
biggest purchase of their lifetime, for many buyers.
The market structure and size of market (Section 19.4 (j) of the Competition Act) from the point of
view of the buyer is very large. Many buyers will be spending almost half of their monthly salary on
this purchase for the next 15 to 20 years. Also once they move into DLF City, maintenance, security,
electricity, water, malls, etc are all going to be provided by DLF or by the DLF approved agencies.
Thus from the buyer's perspective the size of the market is huge, and at the same time the structure of
the market is opaque. As JLL and Genesis have in their reports pointed out, it is hard for even
professionals like them to get any meaningful information from the developers and their agents – just
imagine the plight of the residential buyer.
Thus, the buyers are very interested in the track record of the builder, and that is why in this report we
have also computed the market shares for completed properties. An additional benefit for the
developers of completed properties is that all the properties that a Developer completes become a sort
of "sample flat" for them, which help them in selling any project that the developer might bring out in
the future. Because the apartments are not consumed like consumer items, are not hidden like many of
the goods, are not invisible like many services, but are there for all to see for all times, the commission
may look at the special nature of the apartment under the Section 19.7 (a), i.e. Physical characteristics
or end-use of goods.
www.QuBREX.com Page 54 of 78
8. DLF & Sales Organizers Preferences
DLF has a strange arrangement with its Sales Channel, i.e. Independent Brokers.. After getting
authorization with DLF the broker has to commit to giving DLF at least 6 bookings in a year, or else
none of the commission will be released for any booking in that year.
After selling to one or two buyers on behalf of DLF, the broker is then tied into making 6 more
compulsory bookings quota – and in all likelihood the chances are that the Broker may not suggest the
best investment to the client, but suggest to client what is good for the broker. This is one such practice
that no other developer or builder has so far not been able to impose upon its brokers in Gurgaon.
In addition, as mentioned earlier DLF restricts sales of certain properties like DLF Magnolias (and
earlier DLF Aralias) by forcing the buyer to surrender their units to DLF only (which then it sells it at a
higher price). They buyers are not allowed to take help of brokers to sell their units in the secondary
market, thus restricting the resale market.
www.QuBREX.com Page 55 of 78
9. Conclusion of the Report
DLF has a strong presence in Gurgaon. The contrarian picture painted by Jones Lang LaSalle &
Genesis in the reports submitted by them on behalf of DLF are based on false data, wrong proxy for
market shares, misleading methodology, and illogical assumptions.
DLF has the ability to leverage its huge strengths in the commercial spaces into its sales of residential
properties in the integrated township of Gurgaon called DLF City.
DLF also currently has a dominating market share in completed and launched properties in the luxury
market of Gurgaon. And it is in a position to act independently of the market and competitive forces in
the geographic market of Gurgaon and product market of "luxury" apartments.
DLF has also been a pioneer in many concepts and business processes – some to the benefit of the
consumers and some to their detriment.
www.QuBREX.com Page 56 of 78
10. About QuBREX
QuBREX (QuBit Real Estate eXchange) is a division of QuBit Technologies Pvt. Ltd. (QBTPL)
The Managing Director of QBTPL, Dr. Sanjay Sharma, has done his B.E. (Chemical Engineering)
from University of Roorkee (now IIT Roorkee), his M.S. (Chemical Engineering) from North Carolina
State University, Raleigh, and Ph.D. from North Carolina State University. The Ph.D. thesis was in
Computer Science. Dr. Sharma is also a Co-Inventor for US Patent Number 6,490,569 B1 dated
December 03, 2002 "System for Combining Life Cycle Assessment With Activity Based Costing Using
Relational Database Software Application."
Dr. Sharma, and his team have been running Real Estate Consultancy & Brokerage Services for the last
6 years in the National Capital Region (NCR). They run community websites like
www.GurgaonScoop.com, www.NoidaScoop.com, and www.DelhiScoop.com, and have been
collecting and publishing real estate data about NCR on their website www.QuBREX.com for the last 6
years.
Dr. Sharma also hosts a weekly TV program called Property Watch on Sahara Samay TV Channel,
and regularly appears on the Money Guru – Property Show of Zee Business TV Channel.
Team Members Ms. Sonia Vaid & Mr. Sanjeev Kumar helped in collecting and analyzing the data for
the report.
www.QuBREX.com Page 57 of 78
11. Appendices
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ou
sin
g B
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rivate
Bu
ild
ers
In
Gu
rgao
n
Launch
Year
Completion
Year
Equally
Weighted
Average
Number of
Apartments
By
Configuration Builder
Project
Location
Approx
Area
sq.ft
Market Price in
Rs (Lumpsum
or Approx
Calculated)
Effective
Market
Price Rs
psf
Effective
Market Value
of Builder's
Project By
Configurations
(Rs crore)
2008
119
Pal
City Park
Sector 95
2100
5,326,500
2,536
63
2008
119
Pal
City Park
Sector 95
1690
4,315,850
2,554
51
2008
119
Pal
City Park
Sector 95
1500
3,847,500
2,565
46
2008
119
Pal
City Park
Sector 95
1375
3,539,375
2,574
42
2007
336
Tulip
Petals
Sector 69
1550
4,047,500
2,611
136
2009
500
SARE Group
Royal
Gardens
Sector 92
1900
5,382,500
2,833
269
2009
500
SARE Group
Royal
Gardens
Sector 92
1665
4,738,875
2,846
237
2009
500
SARE Group
Royal
Gardens
Sector 92
1712
4,879,600
2,850
244
2009
500
SARE Group
Royal
Gardens
Sector 92
1416
4,072,800
2,876
204
2009
500
SARE Group
Royal
Gardens
Sector 92
1180
3,441,500
2,917
172
2007
113
Raheja (Saket)
Navodaya
Sector 92
2350
7,029,750
2,991
79
2007
75
Raheja (Saket)
Vedaanta
Sector 108
2780
8,409,300
3,025
63
2007
75
Raheja (Saket)
Vedaanta
Sector 108
2490
7,558,150
3,035
57
2008
500
Piedmont
Taksila
Heights
Sector 37 C
2219
6,826,670
3,076
341
2007
113
Raheja (Saket)
Navodaya
Sector 92
1990
6,190,150
3,111
70
2007
75
Raheja (Saket)
Vedaanta
Sector 108
1795
5,608,075
3,124
42
2007
113
Raheja (Saket)
Navodaya
Sector 92
1100
3,478,500
3,162
39
2007
75
Raheja (Saket)
Vedaanta
Sector 108
1365
4,324,525
3,168
32
2008
88
Pal
Aquapolis
Sector 70 A
2650
8,513,750
3,213
74
2007
113
Raheja (Saket)
Navodaya
Sector 92
1498
4,871,330
3,252
55
2008
240
ILD
Spire Greens Sector 37 C
3450
11,221,000
3,252
269
2008
225
Mapsko
Casa Bella
Sector 82
3500
11,387,500
3,254
256
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2010
143
ABW
Verona Hills
Sector 76
1500
7,252,500
4,835
103
2004
143
Ardee
Palm Grove
Heights
Sector 52
1850
8,945,000
4,835
128
2008
128
Tulip
Purple
Sector 69
1550
7,496,250
4,836
96
2006
2010
170
Bestech
Park View
Residency
Sector 3
1920
9,312,000
4,850
158
2010
100
Godrej Frontier
Garden Vista Sector 80
1950
9,477,373
4,860
95
2004
2010
250
JMD
Gardens
Sohna Road
2020
9,842,980
4,873
246
2009
105
Bestech
Park View
Next
Sector 66
1850
9,016,250
4,874
94
2010
143
ABW
Verona Hills
Sector 76
1250
6,093,750
4,875
87
2006
2010
170
Bestech
Park View
Residency
Sector 3
1780
8,725,260
4,902
148
2009
105
Bestech
Park View
Next
Sector 66
1750
8,631,250
4,932
90
2009
117
BPTP
Park Prime
Sector 66
1600
7,904,320
4,940
92
2010
100
Godrej Frontier
Garden Vista Sector 80
1475
7,302,757
4,951
73
2007
175
Spaze
Privy
Sector 72
1900
9,438,000
4,967
165
2006
2010
170
Bestech
Park View
Residency
Sector 3
1565
7,806,775
4,988
133
2004
163
Clarion
The Legend
Sector 57
2587
12,976,300
5,016
212
2007
175
Spaze
Privy
Sector 72
1800
9,046,000
5,026
158
2009
117
BPTP
Park Prime
Sector 66
1275
6,433,599
5,046
75
2009
295
Tulip
Orange
Sector 69-70
1437
7,255,375
5,049
214
2009
295
Tulip
Orange
Sector 69-70
1137
5,792,875
5,095
171
2009
117
Unitech
Sunbreeze
Sector 69
1337
6,822,747
5,103
80
2004
163
Clarion
The Legend
Sector 57
2370
12,150,000
5,127
198
1991
1997
250
DLF
Silver Oaks
DLF Phase I
1950
10,000,000
5,128
250
2009
117
Unitech
Sunbreeze
Sector 69
1501
7,706,481
5,134
90
2009
100
Unitech
Vistas
Sector 70
1530
7,857,680
5,136
79
2007
175
Spaze
Privy
Sector 72
1600
8,232,000
5,145
144
1996
2002
86
Malibu Estate
Malibu
Towne
Sohna Road
2940
15,200,000
5,170
131
2006
2010
170
Bestech
Park View
Residency
Sector 3
1415
7,324,905
5,177
125
2009
100
Unitech
Vistas
Sector 70
1560
8,084,360
5,182
81
2009
117
Unitech
Sunbreeze
Sector 69
1100
5,709,100
5,190
67
2004
2009
171
Vatika
Jasminium
Sohna Road
3000
15,800,000
5,267
270
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2002
2005
556
Ansal
Valley View
Estate
Faridabad
Road
1300
6,890,000
5,300
383
2002
2005
556
Ansal
Valley View
Estate
Faridabad
Road
1756
9,306,800
5,300
517
2009
100
Unitech
Vistas
Sector 70
1115
5,912,440
5,303
59
1998
2004
96
Ansal
Sushant
Apartment
Sushant Lok
1
1545
8,200,000
5,307
79
1996
2002
86
Malibu Estate
Malibu
Towne
Sohna Road
2430
13,000,000
5,350
112
2009
19
Emaar MGF
Emerald
Estate
Sector 65
1395
7,537,150
5,403
14
1996
2002
86
Malibu Estate
Malibu
Towne
Sohna Road
1586
8,600,000
5,422
74
1996
2002
86
Malibu Estate
Malibu
Towne
Sohna Road
1616
8,800,000
5,446
76
2009
19
Emaar MGF
Emerald
Estate
Sector 65
1280
7,006,600
5,474
13
2002
2005
556
Ansal
Valley View
Estate
Faridabad
Road
627
3,448,500
5,500
192
2002
2005
556
Ansal
Valley View
Estate
Faridabad
Road
977
5,373,500
5,500
299
1998
2004
96
Ansal
Sushant
Apartment
Sushant Lok
1
1153
6,350,000
5,507
61
2009
180
Unitech
The
Residences
Sector 33
1870
10,338,000
5,528
186
2009
180
Unitech
The
Residences
Sector 33
1545
8,583,000
5,555
154
2004
482
Sweta Estates
Central Park
II
Sohna Road
2950
16,508,750
5,596
795
2005
2010
14
Vatika
Acacia
Sohna Road
1936
10,841,600
5,600
15
2005
2010
14
Vatika
Acacia
Sohna Road
2086
11,681,600
5,600
16
2003
2010
123
Parsvnath
Greenville
Sohna Road
2125
11,950,000
5,624
146
2003
2010
123
Parsvnath
Greenville
Sohna Road
1886
10,611,600
5,627
130
2004
2010
467
Orchid
Petals
Sohna Road
2337
13,178,284
5,639
615
2004
482
Sweta Estates
Central Park
II
Sohna Road
2350
13,313,750
5,665
641
2004
2009
467
Orchid
Petals
Sohna Road
1805
10,235,260
5,671
478
2007
34
TDI
Ourania
Golf Course
Road
4000
22,700,000
5,675
77
2010
104
Unitech
Exquisite
Sector 71
4612
26,227,200
5,687
273
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Verandas
2005
64
Salcon
The
Verandas
Sector 54
5330
65,043,500
12,203
416
2005
64
Salcon
The
Verandas
Sector 54
4495
57,312,750
12,750
367
1997
2002
130
ITC
Laburnum
Sector 28
3300
42,500,000
12,879
553
2005
204
DLF
Magnolias
Golf Course
Road
9175
137,519,375
14,988
2799
2008
94
DLF
Magnolias - II
Golf Course
Road
9175
137,519,375
14,988
1286
2005
204
DLF
Magnolias
Golf Course
Road
5825
87,855,625
15,083
1788
2008
94
DLF
Magnolias - II
Golf Course
Road
5825
87,855,625
15,083
821
1997
2002
130
ITC
Laburnum
Sector 28
3800
57,500,000
15,132
748
2006
120
Ambience
Caitriona
DLF Phase
III
7244
109,660,000
15,138
1316
2006
120
Ambience
Caitriona
DLF Phase
III
6333.5
96,002,500
15,158
1152
2002
2007
126
DLF
Aralias
Golf Course
Road
5850
150,000,000
25,641
1890
2002
2007
126
DLF
Aralias
Golf Course
Road
5600
150,000,000
26,786
1890
l.
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pen
dix
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DL
F T
ak
es S
tep
s T
o K
eep
Sp
ec
ula
tors
At
Bay
http://www.m
ydigitalfc.com/real-estate/dlf-takes-steps-keep-speculators-bay-921
DLF takes steps to keep speculators at bay
By Shilpa Shree Jun 17 2009
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The company insists on lock-in clause for new buyers, besides selling only one flat to a PAN
DLF, India’s largest publicly traded real estate company, has begun taking measures to keep speculative buyers away. It has incorporated a one
in period for all new buyers. The company is also offering only one flat to a person and using the buyer’s PAN number as a ch
Rajeev Talwar, executive director of DLF, told FC Estate that his company has initiated a slew of measures to be included in the contract that is to be
signed between the buyer and developer to ensure that the units are sold to genuine buyers.
“We have introduced a few self-regulatory measures. We issue only one unit for a PAN
also introduced a one-year lock-in period to ensure that someone just does not buy and sell it immediately to make quick bucks,” said Talwar. He s
company would not transfer the title of the property in the name of the buyer for a year after a property is booked.
Over last few months, the company has clarified that speculative buyers are partially responsible for the downturn, as the pr
due to many speculative buyers artificially inflating prices.
“We have seen some good response for our projects in the recent past. The market is firming up, buyer interest was always the
loans are low,” added Talwar.
While a few Mumbai-based developers have increased the prices of their projects in the recent past, Talwar says DLF has not increased the prices
in any of its projects. “We are watching the market. We may not increase the prices in nea
Commenting on DLF’s initiatives, Anuj Puri, country head of Jones Lang LaSalle Meghraj, a property consulting company, said,
encouraging bulk bookings these days. Moreover, if a buyer is selling
the customer is selling. This discourages the person from selling. These clauses are included in the contract that is signed
developer.”
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Lu
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lats
Check out these super luxury flats
January 21, 2006 19:59 IST
http://www.rediff.com/m
oney/2006/jan/21spec4.htm
Sitting on his tenth floor office in New Delhi's [ Images ] Connaught Place, Dr Vijay Vancheswar, vice
is jubilant. "Look at this building!" he says of DLF Place, where his office is located.
"Built in 1992, but doesn't it look new? It's easily the best-looking building in Connaught Place. It's because we're all about maintenance and upkeep. We
don't build something and then go away and leave it alone -
in clause for new buyers, besides selling only one flat to a PAN-card holder
has begun taking measures to keep speculative buyers away. It has incorporated a one
in period for all new buyers. The company is also offering only one flat to a person and using the buyer’s PAN number as a check.
tor of DLF, told FC Estate that his company has initiated a slew of measures to be included in the contract that is to be
signed between the buyer and developer to ensure that the units are sold to genuine buyers.
measures. We issue only one unit for a PAN-card holder. This is to ensure that the buyer is genuine. We have
in period to ensure that someone just does not buy and sell it immediately to make quick bucks,” said Talwar. He s
company would not transfer the title of the property in the name of the buyer for a year after a property is booked.
Over last few months, the company has clarified that speculative buyers are partially responsible for the downturn, as the property market was overheated
“We have seen some good response for our projects in the recent past. The market is firming up, buyer interest was always there and interest rates on
based developers have increased the prices of their projects in the recent past, Talwar says DLF has not increased the prices
in any of its projects. “We are watching the market. We may not increase the prices in near future but may do it later,” he said.
Commenting on DLF’s initiatives, Anuj Puri, country head of Jones Lang LaSalle Meghraj, a property consulting company, said, “Developers are not
encouraging bulk bookings these days. Moreover, if a buyer is selling at a premium, the developers are asking for 15-20 per cent of the premium at which
the customer is selling. This discourages the person from selling. These clauses are included in the contract that is signed between the buyer and
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] Connaught Place, Dr Vijay Vancheswar, vice-president - corporate communications, DLF Universal,
of DLF Place, where his office is located.
looking building in Connaught Place. It's because we're all about maintenance and upkeep. We
- we invest in community."
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has begun taking measures to keep speculative buyers away. It has incorporated a one-year lock-
tor of DLF, told FC Estate that his company has initiated a slew of measures to be included in the contract that is to be
card holder. This is to ensure that the buyer is genuine. We have
in period to ensure that someone just does not buy and sell it immediately to make quick bucks,” said Talwar. He said the
y market was overheated
re and interest rates on
based developers have increased the prices of their projects in the recent past, Talwar says DLF has not increased the prices of units
“Developers are not
20 per cent of the premium at which
between the buyer and
corporate communications, DLF Universal,
looking building in Connaught Place. It's because we're all about maintenance and upkeep. We
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This is one way of describing their latest projects, the super-luxury apartment complexes 'The Aralias' (launched in 2004, it is expected to be finished late
this year) and 'The Magnolias' (launched last year, it is expected to be finished late-2006).
Short of shooting people as they walk through the gates, DLF has done almost everything else to keep up an almost superhuman aura of exclusivity
around these two projects.
All the flats are offered out on invitation only; there is no marketing to speak of; and if you wander into the DLF office in your shorts and ask about them,
you will more likely be met with the cold shoulder than the glad eye.
According to Vancheswar, 'The Magnolias', which started out with a price tag of Rs 4,500 per sq ft when it was launched last September, has now reached
a price of Rs 6,000 per sq ft for an apartment, and Rs 6,500 per sq ft for a penthouse. Despite the fact that the project is not even half done, all of the flats
have been leased out. Why is it so popular?
"First of all, these are among the first really high-segment luxury accommodation that is available. And people who buy in this super-luxury segment are
often looking for exclusivity," says Vancheswar, "This is exactly what we offer. We screen all our candidates very closely, so that we can make sure each
and every resident is someone we want to be part of this community. There is no re-selling policy, that is, when someone buys a flat, we don't allow them
to sell it to anyone but DLF. This keeps up a sense of community, and keeps speculators out. And of course, DLF is a known name in property
development."
DLF has a fixed price at which they buy back their flats; for instance, the buy-back price now is Rs 5,000 per sq ft for The Aralias, "compared to the starting
selling price of Rs 1,800 back in 2004," according to Vancheswar.
So how do you get on to one of these exclusive lists? There are only 252 flats in The Aralias, and 300 (although many more are planned) in The
Magnolias, so chances are the likes of you and I will have to sit this one out.
"After we had started this by-invitation-only scheme with The Aralias," says Prerna Aggarwal, chief manager - marketing, "there was a lot of pent-up
demand for the Magnolias. We catered to this clientele first, and there was really no way other than word of mouth for anyone else to find out about it.
Even the section on our website was password-protected."
So letters are sent out, along with an application form that asks about your profession, age, and income ("although a lot of people left that one blank!"
laughs Vancheswaran). People are then short-listed, depending on how the management at DLF feels they would fit into the community ("it's not just about
money, but also class", according to Aggarwal). It is only once you have signed on the dotted line that the one piece of marketing does go out to you.
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This is where Gopika Chowfla, of Gopika Chowfla Graphic Design, comes in. If you're one of the lucky people who do get a flat, you will also get sent to
you a lovely concept book full of pictures - a flower here, a golf ball there (The Magnolias will overlook the to-be-extended DLF golf course), and park
benches covered in red autumn leaves.
"There is really nothing concrete in this book," says Chowfla of her creation. "It doesn't tell you what kind of a flat you'll get, whether you'll get a golf
membership - it doesn't commit to anything at all. Rather, it tries to sell a lifestyle, a way of thinking. It also helps word spread, adds to the intrigue and the
feeling of exclusivity."
In fact, it isn't really clear what kind of a flat you will get until the last minute - this is because you can play a large part yourself in the final design. There
are three main kinds of apartments at The Magnolias; the standard apartment (which is 5-bedroom), the duplex and the penthouse.
But this is all you can know; when you buy the apartment, you can pull down the walls and redesign the layout according to your own tastes, and you have
to put in the walls and floors by yourself, because the price of the apartment is only for the empty shell.
Of course, there is an option where you can ask DLF to do the interiors for you (at a price of Rs 1,500 per sq ft), but you can do it yourself as well, if you
want to give your apartment an individual feel.
What is the impact on the industry of this kind of never-seen-before endeavour? "There is a lot of hype around luxury these days," says Chowfla. "No one
wants to interview the property developer who is doing middle segment work; everyone wants to talk of superlatives - this is just natural."
Vancheswaran, by his own admission, only talks of the "premium, super-premium and luxury segments." DLF doesn't deal in property below this line. But
given the opportunity, he says, he doesn't think that DLF would be averse to getting into the middle segment.
"We're on sound ground right now with Gurgaon," he says, "given the new stable government that has established itself. This is really vital. They have
promised to plough the External Development Charges that have accumulated back into infrastructure.
They have pledged crores into creating 10 lakh jobs over the next five years. You really need this kind of public-private partnership. When it comes to the
economically weaker segments, the government should provide subsidies on land.
Otherwise the margins are just too wide; costs would have to be cut somewhere, and no one would want to risk quality." "But," argues Chowfla, "you'd
have huge volumes as well. And all you'd have to do is provide housing with a little imagination, cut all the frills that you put on the luxury segment, but
design it with care and quality in mind. That's really what's needed today."
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At the end of the day, of course, businesses do need to think of the bottomline, and given the near-hysterical response to The Magnolias and The Aralias,
DLF is probably wise to invest in super-luxury.
There is clearly a market to tap into. Their clientele want peace, central air-conditioning, twenty-four hour power back-up, a nine-hole golf course outside
their bedroom window, and neighbours just like themselves. And they're willing to pay for it.
Samyukta Bhowmick in New Delhi
Source:
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