Srajkund: Prices rising but limited jobs

Of late, Surajkund has been hyped as an attractive alternative real estate destination on the Delhi-National Capital Region (NCR) map. Property prices in this location have seen an uptrend and this has evinced increasing interest from investors.

There was limited new residential supply in this area in the past. The market has since gained pace and there are several residential projects in the pipeline across varied budget categories. Surajkund holds good long-term investment prospects from the perspective of real estate capital appreciation, especially in the affordable housing segment. However, the popular hype about it developing into an alternative destination to South Delhi needs closer examination.

The True Picture
Surajkund is a part of Faridabad, primarily an industrial town but has limited corporate activity. The manufacturing sector, which has been the main driver of the economy, is also under a lot of stress currently. This means there is no other major growth driver for the region. The limited availability of better employment owing to the conspicuous absence of the corporate sector has seen a relatively small number of middle- and upper-middle class home buyers choosing Surajkund.

Neither is the proportion of high net worth individuals (HNIs) hailing from the industrial sector or Faridabad region's affluent families very significant. Given the absence of alternative growth drivers, this residential market, however upbeat, will witness only limited growth.

At present, luxury projects such as Charmwood by Eros and Omaxe Forest by Omaxe, the only projects of the kind here, have seen massive appreciation. Their investment potential in terms of further appreciation has peaked. Surajkund is slowly losing its affordability tag due to the rising prices, overall scope of appreciation diminishing concurrently.

Budget-conscious investors will be more interested in alternative locations such as the Neharpur region (Sector-80 of Faridabad and beyond), as the ticket sizes are small, availability of affordable homes is high and the returns on investment more encouraging. Also, civic facilities like water, electricity and physical infrastructure are way below the baseline needs of a promising growth corridor.

One must keep in mind that unlike Gurgaon and pockets of South Delhi, its connectivity to the airport, the general lack of public transportation remain challenging. This means Surajkund, despite its locational advantages, is unlikely to emerge as an alternative to South Delhi for home buyers.

The writer is CEO - Operations, Jones Lang LaSalle India.