NEW DELHI: Owning a private bungalow in Delhi’s Lutyens’ Bungalow Zone has been a status symbol for decades and has attracted the rich and the famous from across the country.
This extremely niche area has remained immune to the vagaries of the real estate sector, and yet Covid-19 has not left this leafy neighbourhood untouched either.
In an unprecedented development, more than 20 bungalows in LBZ are up for sale, their prices ranging from Rs 75 crore to Rs 170 crore, depending on the plot size and location. Portals that only deal in high-end, luxury properties have listed several from this area in the last couple of months rather than a couple they used to earlier.
From a 7,500-sq ft bungalow near Khan Market (Rs 150 crore) and an equally spacious bungalow on Hailey Road (Rs 170 crore) to 8,000-10,000-sq ft residences in Sunder Nagar costing Rs 75-90 crore, the house’s distance from Rajpath determines the price. Comparatively, three-bedroom apartments in Chanakyapuri‘s diplomatic zone are available for Rs 20-40 crore.
“I have been in real estate since 1997 and have sold many properties, but never in my experience have I got a stock of 12 properties in LBZ. Usually, the number in the inventory is one or two, at most three,” said Rohit Chopra, founder of real estate consultancy firm Southdelhiprime.com.
Developed by Edwin Landseer Lutyens, the British architect of New Delhi, this exclusive ‘zone’ was originally spread across 19.1 sq km. There are strict height, floor-area-ratio and reconstruction norms for this heritage zone to protect its low skyline. There are around 3,000 bungalows in the area, which mostly house top ministers, judges and government officials. The number of privately held bungalows and homes in LBZ is around 600. Apart from LBZ, spacious properties in areas adjacent to the zone also command high prices.
“Being the heart of Delhi, LBZ commands the highest real estate pricing not only in India but globally,” said Shalin Raina, managing director (residential services), Cushman and Wakefield, a global real estate firm. “Sprawling residences, manicured gardens, close proximity to key destinations in the city and the snob value make LBZ one of the most coveted residential areas of India.”
Raina said that despite some flexibility in price negotiations, “we do not see a much downward trend in the pricing since these are boutique and sought-after properties in the country”. She added, “The velocity of sales may remain a bit slow for a couple of months, but high-end boutique properties will remain in demand owing to the large number of high net worth individuals in India.”
Chopra said that most of the sellers are in the 65-80 age bracket and have realised the importance of succession planning, perhaps triggered by the pandemic. He revealed that only those with a certain level of wealth opt for an LBZ property and it’s for the status of the address rather than the space. “Only when you are very rich do you buy a two-seater Ferrari,” he explained. “For the sellers who have listed, it was perhaps Covid-19 that made them realise that they should not sit on assets but monetise them.”
Ramesh Menon, director, Certes Realty, said that while there was a lot of inventory now, absorption was not going to be easy. “Most of these properties need redevelopment, which will not happen and outright purchase of such properties is often difficult. There has to be a compelling reason for someone to get into such a big property deal at present,” he suggested.
Menon also said, “When cash flows is happening and the going is good, one never looks at the value of a house. But now some people might wonder why they are living in a property worth Rs 250 crore. This amount would yield 10-12% interest in other sector, but not in property.” He added, “However, I wouldn’t say this is a sign of a weakening market as high-end deals were finalised in recent months, even if not in LBZ but elsewhere in south Delhi.”