Real Insights: Real Estate Overview

Raj Nagar Extension

June – 2015

A CommonFloor Report

ii

Executive Summary

Delhi NCR has been experiencing phenomenal growth in terms of population. A recent report by the UN

State highlighted that, “by 2015, the expected population of the National Capital Region will be 28.6

million.” It raises eyebrows as the region is already gasping for space. Expansion is ‘the’ only way in which

the city can accommodate 28.6 million people in the future. Fortunately, the solution has already clicked

the minds of the city-planners. And that’s how Raj Nagar Extension was born.

The realty market of Raj Nagar Extension has continued to defy the skeptics. Started essentially by 12

developers, many members of the real estate fraternity were quite doubtful about the area’s success.

However, as the project took off, more and more developers pooled in to construct projects here.

Interestingly, the famous saying, the timing was just perfect, rest everything fell into place, holds completely

true for this area. At a time when buying affordable homes in Delhi NCR was becoming a far-fetched dream,

developers at Raj Nagar Extension doled out several affordable homes. And rest is history!

In its nascent stage of development, denizens had this doubt whether people will come to this area or not.

This doubt was also soon busted as due to affordability, the area grabbed the attention of both end-users

and investors alike.

Today, Raj Nagar Extension stands as one of the most important areas not only in Ghaziabad but in the

whole of NCR.

To further enhance the infra quotient of the area, several projects are in the pipeline. The work on the

construction of a six-lane expressway and the Metro Line is already on track. The proposed 3-lane bridge

over the Hindon River on GT Road will further enhance accessibility to the area.

In the following report, GIS-based tools have been used to analyse the proprietary data of CommonFloor.

The report delves into the major aspects such as the growth factors, infra-upgrades and the supply-demand

side of the market. For better understanding, we have compared all the aspects of Raj Nagar Extension to

neighbouring Indirapuram and Vaishali.

iii

Index

Executive Summary ................................................................................................................................................................................. ii

Index ............................................................................................................................................................................................................. iii

List of Tables ............................................................................................................................................................................................. iv

List of Figures ........................................................................................................................................................................................... iv

List of Maps ................................................................................................................................................................................................ iv

References .................................................................................................................................................................................................... v

Introduction ............................................................................................................................................................................................... 1

Major Growth Factors ...................................................................................................................................................................... 2

Liveability .............................................................................................................................................................................................. 2

Electricity and Water supply ........................................................................................................................................................ 3

SWOT Analysis.......................................................................................................................................................................................... 4

Residential Snapshot ............................................................................................................................................................................. 5

Supply in different localities ......................................................................................................................................................... 6

Market Segmentation based on ticket sizes ........................................................................................................................... 6

BHK wise prices (per sq.ft.) ........................................................................................................................................................... 7

Supply by possession date ............................................................................................................................................................. 8

Sizes of different unit configurations ........................................................................................................................................ 8

Project Area in different localities .............................................................................................................................................. 9

Segmentation based on project sizes ..................................................................................................................................... 10

Under-construction, Ready-to-move-in and Launched ................................................................................................. 10

Top 5 ongoing projects ................................................................................................................................................................. 11

Amenities Analysis ......................................................................................................................................................................... 11

Rental Market ......................................................................................................................................................................................... 12

BHK and Property Type ............................................................................................................................................................... 12

Rental Yield ........................................................................................................................................................................................ 13

Rental Prices ..................................................................................................................................................................................... 13

Number of days in market (rent) ............................................................................................................................................. 14

Resale Market ........................................................................................................................................................................................ 15

Property and configuration availability................................................................................................................................ 15

What are buyers looking at Raj Nagar Extension? ................................................................................................................ 15

Major Challenges .................................................................................................................................................................................. 16

The Road Ahead .................................................................................................................................................................................... 16

Conclusion ............................................................................................................................................................................................... 17

iv

List of Tables

Table 1 Locality scoring based on availability of amenities .............................................................................................. 11

Table 2 Distribution of size and rental values according to unit configurations ..................................................... 14

List of Figures

Figure 1 Supply trend of residential units (2011- Q1,2015) ............................................................................................... 6 Figure 2 Distribution of residential units according to their average ticket prices (2011 - Q1, 2015) ............ 6 Figure 3 Capital values based on unit configurations available (2011 - Q1, 2015) ................................................... 7 Figure 4 Distribution of residential units according to supply and possession years ............................................. 8 Figure 5 Distribution of sizes according to unit configurations ......................................................................................... 8 Figure 6 Distribution of project sizes among popular localities in Ghaziabad ............................................................ 9 Figure 7 Distribution of residential units according to their respective project sizes .......................................... 10 Figure 8 Distribution of projects according to the current status .................................................................................. 10 Figure 9 Distribution of available rental units according to unit configurations .................................................... 12 Figure 10 Distribution of available rental units according to property type ............................................................ 12 Figure 11 Average sale prices along with rental yield according to unit configurations ..................................... 13 Figure 12 Price trends for available rental units according to property type .......................................................... 13 Figure 13 Trend showing the average number of days for rental listings in the market .................................... 14 Figure 14 Distribution of resale residential units according to unit configurations and property type....... 15

List of Maps

Map 1 Context Area of Raj Nagar Extension ................................................................................................................................ 5

1

Introduction

Centrally located but yet shielded from the hustle-bustle of the city, Raj Nagar Extension is a one-stop

destination for a wide band of middle-class end users. While there are a host of factors that make the area

a potential destination for investment, ‘home in your budget’ is the biggest USP. Situated along National

Highway-58 (NH-58) in Ghaziabad, it boasts of being one of the most affordable and well-planned localities

in Delhi NCR.

Raj Nagar Extension provides excellent connectivity to neighbouring areas like Vaishali, Vasundhra and

Indirapuram. It is also well connected with other neighbouring cities such as Delhi and Noida, which are

just 15 minutes’ drive from here. This area is quite close to the Inter State Bus terminal; hence, it is easy to

travel to Delhi and Gurgaon.

It is quite interesting to note that while its neighbouring localities such as Noida Extension and Crossing

Republik were battling with controversies pertaining to land acquisition and dumping ground issues

respectively, with absence of such controversies, Raj Nagar Extension continued evolving as a safe

destination to put one’s money.

Moreover, the area also has the largest green belt in the NCR, which is going to remain undisturbed as

Ghaziabad Development Authority (GDA) has declared 500 acre along the Hindon River as a green belt and

banned all construction activity in the area. Considering the soaring property values in Delhi, this planned

area has truly evolved as a silver lining in the cloud for prospective home buyers.

2

Major Growth Factors

Raj Nagar Extension has been poised for real estate development ever since 2007. It has undergone

development at huge scale and is deemed to be the affordable housing solution in the NCR.

Liveability

The attraction of this place is well-developed physical and social infrastructure. Leading school chains like

Delhi Public School (DPS) and GD Goenka are already in place here, along with hospitals in nearby areas.

IMT Ghaziabad, a leading business school of India, is located in proximity to this place. All in all, this place

has got everything that a household would require. Even the shopping areas or bazaars are nearby as Raj

Nagar itself is known for its famous wholesale vegetable mart. The two major shopping centres are Ajnara

market and River Heights Plaza. A shopping centre known as Choice Mart and a few shops selling groceries

and medicines are scattered in this area. Though there are few health care centres, for advanced facilities,

residents depend on nearby areas.

Thus, the location offers an ideal and serene setting for a pollution-free living in a well-planned place with

excellent connectivity.

RAJ NAGAR EXTENSION

Lack of any controversy

Affordability

LocationHealthy demand-supply equation

Infrastructural developments in

pipeline

Who is Next Door?

Mostly families who decided to shift to Raj Nagar extension during the time when it was

becoming a real estate hub.

3

Electricity and Water supply

At present, electricity and water situation in Raj Nagar Extension is quite decent. However, the area is all

set to get a facelift as at least four electricity infrastructure works are in the pipeline. With the

Infrastructure Development Fund for Ghaziabad, two 33/11-kV electricity substations will be constructed

in Raj Nagar Extension at a cost of Rs 10 crore. An additional Rs 14.02 crore has been allocated for shifting

work of high-tension lines coming within the alignment of the under-construction part of the main road of

Raj Nagar Extension.

4

SWOT Analysis

5

Map 1 Context Area of Raj Nagar Extension

[Source: Real Insights@CommonFloor.com]

Residential Snapshot

‘Home in your Budget’

Amidst soaring property values in Delhi, Raj Nagar Extension has properties up for grab in the affordable

price brackets of Rs 2,400-3,200 per sq. ft. Thus, on an average, a 1000 sq. ft. sized 2BHK apartment in Raj

Nagar Extension can be availed at Rs 24-32 lakh. However, one can also find property below and above this

price range.

6

Supply in different localities

Fig 1 indicates the total supply from 2011 to Q1, 2015. This clearly

indicates that Raj Nagar Extension has surpassed the other two

prominent localities in Ghaziabad. The key reason for this is ample

availability of land as compared to other established markets.

As per data with CommonFloor, as many as 50 projects are under-

construction that are slated for delivery over the next two years.

Thus, there will be a lot of ready-to-move in inventory in the near

future.

[Source: Real Insights@CommonFloor.com]

Market Segmentation based on ticket sizes

Figure 2 Distribution of residential units according to their average ticket prices (2011 - Q1, 2015)

[Source: Real Insights@CommonFloor.com]

Owning a house in a well-developed locality with best social infrastructure and that too in an affordable

price is a wish-list of every prospective home buyer. And fortunately Raj Nagar Extension has it all! With

‘Home in Budget’ being its biggest USP, the market is clearly dominated with affordable properties.

When compared with Indirapuram and Vaishali, Raj Nagar Extension clearly evolve as a showstopper with

94 per cent availability of affordable properties. While Indirapuram and Vaishali just have 12 and 5 per

cent availability of properties below Rs 40 lakh.

Figure 1 Supply trend of residential units (2011- Q1, 2015)

7

BHK-wise prices (per sq.ft.)

Figure 3 Capital values based on unit configurations available (2011 - Q1, 2015)

[Source: Real Insights@CommonFloor.com]

Complementing to the availability of affordable properties, from the above figure, we can see that the

capital values for the residential properties in Raj Nagar extension are in the price brackets of Rs 2,400-

3,200 per sq.ft. Not to mention, it is almost half the price tags available among other prominent micro-

markets in Ghaziabad such as Indirapuram and Vaishali. If everything goes in a pli)anned way, in the times

to come, Raj Nagar Extension will definetly be at par with Vaishali and Indirapuram. Thus, from investment

perspective, the area holds an immense potential.

8

Supply by possession date

Figure 4 Distribution of residential units according to supply and possession years

[Source: Real Insights@CommonFloor.com]

Fig 4 suggests that there will be ample ready-to-move-in properties by 2016. As per data, about 26,000

units are expected to be ready for possession in Raj Nagar Extension, as opposed to about 3,200 and 2,700

units respectively in Indirapuram and Vaishali. Thus, buyers who are looking for possession within the next

6 months to one year can consider Raj Nagar Extension.

Sizes of different unit configurations

Figure 5 Distribution of sizes according to unit configurations

[Source: Real Insights@CommonFloor.com]

9

It is interesting to note that though Raj Nagar Extension falls into affordable market segmentation and

offers residential properties with low-price tags, the unit sizes are almost in the lines of other markets,

which is one of the major attraction for realty investments in this micro-market.

For instance, sizes for a standard 2BHK unit in Raj Nagar Extension varies anywhere between 655-1,400

sq.ft., which is very close to Indirapuram where the range varies from 720-1,450 sq.ft.

Project Area in different localities

Figure 6 Distribution of project sizes among popular localities in Ghaziabad

[Source: Real Insights@CommonFloor.com]

Figure 6 shows the maximum unit supply towards Raj Nagar Extension. However, it is interesting to note

that the size of the new projects launched are below the average perceived in other top markets in the city.

For instance, in Crossings Republik, the size of the project is 50 ha, while in Raj Nagar Extension, it is just

about 10 ha. This can mainly be attributed to the fact that projects in Raj Nagar Extension are not decked

with extravagant amenities unlike its counterparts.

Not to mention, it clearly indicates the highly competitive and active residential market as number of

projects are quite high.

10

Segmentation based on project sizes

Figure 7 Distribution of residential units according to their respective project sizes

[Source: Real Insights@CommonFloor.com]

As already established, Raj Nagar Extension has a plethora of options. While analysing these projects based

on the number of units supply (Fig 7.), it is observed that the projects with units in the range of 500-1,000

are leading the market. While the projects catering above 1,500 units each were in-trend in the other two

tracked markets. It is interesting to note how Raj Nagar Extension market depicts a distinct trend as

opposed to its counterparts.

Under-construction, Ready-to-move-in and Launched

Figure 8 Distribution of projects according to the current status

[Source: Real Insights@CommonFloor.com]

With extreme competition among developers in the micro-market, there is only about 36 per cent ready-

to-move in properties in Raj Nagar Extension, while about 55 per cent of the supply is under construction.

Further, the area also boasts of a good number of upcoming projects in Raj Nagar Extension (yet to be

commissioned) that comprises of about 9 per cent of the total residential share of the market.

Interestingly, the other two markets depict the signs of saturation with higher number of completed

projects.

11

Top 5 ongoing projects

[Source: Real Insights@CommonFloor.com]

Amenities Analysis

Table 1 Locality scoring based on availability of amenities

[Source: Real Insights@CommonFloor.com]

(Note: Only Existing Projects have been considered for amenities analysis)

While analysing the standard amenities provided in projects, Raj Nagar Extension clearly lacks a flavour

as opposed to the other two markets. This is mainly because the projects are targeted to cater mid-segment

group.

Health Club SportsLiesure

PlacesServices Facilities Security

Overall

Rating

Raj Nagar Extension 2.92 0.94 2.50 3.00 1.25 1.25 1.98

Indirapuram 6.67 0.00 4.17 4.67 5.00 5.00 4.25

Vasundhara 3.33 0.00 2.50 2.00 2.50 5.00 2.56

Very Good

Good

Not Satisfactory

12

Rental Market

BHK and Property Type

Figure 9 Distribution of available rental units according to unit configurations

[Source: Real Insights@CommonFloor.com]

As per rentals, 2 and 3BHK units in Raj Nagar Extension comprises almost equal share with 46 and 49 per

cent. On the contrary, Indirapuram is dominated by 3BHK units with 54 per cent, while Vaishali is

dominated by 2BHK units with 54 per cent.

Figure 10 Distribution of available rental units according to property type

[Source: Real Insights@CommonFloor.com]

It looks like Raj Nagar Extension is utilising its maximum built-up allowance (FAR norms) by focusing more

on the multi-storey apartments rather than individual houses and builder floors. Owing to demand by

working population from the capital city, the area has maximum apartments up for rent as compared to

other property types. While the other two markets also depict the similar trend, one can also find few

builder floors and individual houses here.

13

Rental Yield

Figure 11 Average sale prices along with rental yield according to unit configurations

[Source: Real Insights@CommonFloor.com]

Though properties in Raj Nagar Extension are priced much lower (about half) than its counterparts, when

it comes to rental yield, it is at par with both the tracked localities. As per CommonFloor’s data, for a 2BHK

unit, one can garner a yield of about 3 per cent.

Rental Prices

Figure 12 Price trends for available rental units according to property type

[Source: Real Insights@CommonFloor.com]

Even from rental perspective, Raj Nagar Extension evolve as an affordable destinations as opposed to the

other two tracked markets. From Figure 12, one can clearly deduce that apartments are priced at Rs 10,000

per month here. While for the similar sized apartment in Indirapuram one has to shell out about Rs 21,000

per month. This was the case with most of the other property types.

14

Table 2 Distribution of size and rental values according to unit configurations

[Source: Real Insights@CommonFloor.com]

Number of days in market (rent)

Figure 13 Trend showing the average number of days for rental listings in the market

[Source: Real Insights@CommonFloor.com]

For user reference, we have included almost 80 per cent of the overall effective listings. which are indicative

of market trends.

15

Resale Market

Property and configuration availability

Figure 14 Distribution of resale residential units according to unit configurations and property type

[Source: Real Insights@CommonFloor.com]

Figure 14, it is clearly seen that in resale market, apartments in 2BHK configuration dominates the property

spectrum in Raj Nagar Extension. While in Indirapuram, apartments in 3BHK configuration tops the chart.

On the contrary, Vaishali has maximum resale availability of Builder Floor apartments.

What are buyers looking at Raj Nagar Extension?

The demand and supply is at almost at par in Raj Nagar Extension.

About 78 per cent prospective buyers were looking for apartments in Raj Nagar Extension,

followed by plots with 16 per cent.

About 61 per cent seekers preferred 2BHK units, followed by 3BHK units (16% seekers). About 11

per cent buyers were looking for 1BHK units.

For 2BHK configuration, buyers were looking for units in the price range of Rs 32-48 lakh, while

for 3BHK configuration, the preferred range was Rs 55 lakh to 1.2 crore. For 1 BHK units, the

preferred range was Rs 49-53 lakh.

16

Major Challenges

Though a well-planned township, Raj Nagar Extension does faces few problems. But one thing government

authorities need to be careful is its rapid commercialisation, which may lead to infrastructure and civic

issues. The green belt provides fresh air and this needs to be protected at any cost.

Garbage Dumping: A Cause of Concern

Hindon River has turned into a dumping ground with tonnes of garbage is regularly being carried to its

banks, near Nandi Park. A large part of the garbage is also being burned at the site on a daily basis, which

has led to air-pollution in the area.

Water Crisis

Few areas are also witnessing water crisis as piped water supply has decreased due to soaring temperature

and people solely rely on water tankers.

The Road Ahead

Raj Nagar Extension is expected to emulate the same growth pattern as premium locations in Gurgaon, such

as Golf Course Extension Road and NH-8 due to its proximity to the international airport.

Further, with several infra-upgrades in the pipeline, the area is all set to get another facelift in the near

future. The work on the construction of a six-lane expressway and the Metro Line is already on track. The

proposed 3-lane bridge over the Hindon River on GT Road will further enhance accessibility to the area.

Also, the proposed Delhi-Haridwar Highway will pass through Raj Nagar Extension, further enhancing

connectivity of the area.

Moreover, there are several infrastructure upgrades under consideration that will also aid the realty

development. The link between NH-24 and NH-58, the project to widen the 6-lane road to 8-lane from

Dabur T-junction to Meerut T-junction via Mohan Nagar and NH-58 are all underway. Also, the Mohan

Nagar intersection which is perched to become a junction for commuters to switch between the Delhi Metro

and the proposed Regional Rapid Transit System (RRTS), an inter-city high speed train, would definitely be

a game changer for development of Raj Nagar Extension.

17

Conclusion

Situated along NH-58 in Ghaziabad, ‘home in your budget’ is the biggest USP of Raj Nagar

Extension. At present, 94 per cent properties available fall in the affordable segment.

Raj Nagar Extension enjoys excellent connectivity to neighbouring areas like Vaishali, Vasundhara

and Indirapuram. It is also well connected with other neighbouring cities such as Delhi and Noida,

which are just 15 minutes’ drive from here.

Robust physical and social infrastructure has also helped the area to climb the realty growth

ladder.

As per data with CommonFloor, as many as 50 projects are under-construction that are slated for

delivery over the next two years.

Complementing to the availability of affordable properties, capital values for properties in Raj

Nagar extension are in the brackets of Rs 2,400-3,200 per sq.ft., almost half the price tags available

among other prominent micro-markets.

As already established, Raj Nagar Extension has a plethora of options. Projects with units in the

range of 500-1,000 are currently leading the market.

With extreme competition among developers in the micro-market, there is only about 36 per cent

ready-to-move in properties in Raj Nagar Extension, while about 55 per cent of the supply is under

construction.

As per rentals, 2 and 3BHK units comprises almost equal share with 46 and 49 per cent

respectively.

Even from rental perspective, Raj Nagar Extension emerged as an affordable destination as

opposed to the other two tracked markets – Vaishali and Indirapuram.

For rentals, the average number of days in the market is 44 days.

v

References

[1] Raj Nagar District Centre gets ready for facelift (2015, Jun 9). Retrieved from NYOOOZ.

http://www.nyoooz.com/noida/122184/raj-nagar-district-centre-gets-ready-for-facelift

[2] Ghaziabad to get smart in 6 months (2014, Dec 22). Retrieved from The Times of

India. http://timesofindia.indiatimes.com/city/noida/Ghaziabad-to-get-smart-in-6-

months/articleshow/45597680.cms

[3] Land compensation forms lion’s share of spending in Ghaziabad (2015, Mar 31). Retrieved

from The Times of India. http://timesofindia.indiatimes.com/city/noida/Land-compensation-

forms-lions-share-of-spending-in-Ghaziabad/articleshow/46751751.cms

[4] GMC to lodge case against Hindon waste dumping (2015, Jun 11). Retrieved from The Times of

India. http://timesofindia.indiatimes.com/city/noida/GMC-to-lodge-case-against-Hindon-waste-

dumping/articleshow/47621911.cms

[5] Upcoming Infra to boost Rajnagar Ext’s Realty Market (2014, Aug 21). Retrieved from

CommonFloor.com http://www.commonfloor.com/guide/upcoming-infra-to-boost-rajnagar-

exts-realty-market-45602.html

vi

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Bangalore – 560008

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Authors

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Disclaimer: The information provided in this Website is based on CommonFloor data which is collected from

various publicly known sources viz, websites, documents and maps including CommonFloor's proprietary data

resources, and from the inputs of unidentified individuals. It ought to be considered as a guideline and not as

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a particular purpose and non-infringement.

Yadunandan Batchu

Research Associate

yadunandan.batchu@commonfloor.com

Bangalore

Nikunj Joshi

Sr. Research Associate

nikunj.joshi@commonfloor.com

Bangalore

Meha Singla

Head Domain Research (Real Estate)

meha.s@commonfloor.com

Bangalore