This article was written for the Realty PLUS magazine by a colleague of mine.

In the last few months that I have started attending seminars and conferences on real estate,  I am further more amazed at the consistency of Ignorance about one of the largest investment opportunities ever – The Delhi Master Plan MPD 2021.

 Being considered as someone with expertise on land & projects under the MPD 2021, I am inevitably posed the following three questions

 a)    WHY & WHERE Delhi?

b)    Why and when should I invest in Delhi?

c)    Size of the opportunity and how to go about?

 Inadvertent or deliberate, it is our firm conviction that the Delhi opportunity is not well publicised amongst the masses. Besides, there are a lot of myths concerning Delhi opportunity which I intend to dispel through this article.

 Without getting into detailing, here are some quick reasons why the serious investor should not & cannot ignore the Delhi MPD 2021 opportunity.

 è Political – Strong “Intent & Ability” to develop Delhi into a modern megapolis

è Demographic – Population expected to increase by 80 lakhs in 10 years

è Demand – 2 million dwelling units is the forecasted demand for housing

è Economic – Growth driver for the investments into India. Hub for business activity in Northern India, with multi billion dollars investments in the next 5 years.

 è Policy – New favourable policies on investment climate – Proposed enhancement of ground coverage and FSI norms

 è Events – Delhi is already investing more than a few billion dollars for the commonwealth games 2010, and might be a bidder for the Olympics in 2020 or 2024

 Let me try and address some myths on the Delhi Master plan 2021 along with the answers to the above questions. A pictorial representation produced here below would be helpful to the readers too.

 Myth 1 – Land is scarce in Delhi.

 “Delhi has more land than the entire Gurgaon City – ready to be developed, and infrastructure in place, and available to be brought under development over the next 10 years”. I use this sentence to shock people who are under the myth.

 Delhi city state is a total of 1483 sq. Kms out of which the current urbanized area is approx. 702 sq. Kms. There is a WHOPPING 700 sq. Kms yet to be developed. Look at both the illustrations below for your own understanding.

 Illustration A – Map of Delhi with New urbanizable areas marked with surrounding cities

 Illustration B – Total area in the Opportunity zones which to be developed through PPP, private and DDA initiatives.

The above two illustrations surely would have helped dispel the first Myth.

 Myth 2 – Delhi is costly

 I would not be misplaced in saying this with reasonable authority that “Land is still cheaper in Delhi than in surrounding cities”. Lack of knowledge and vested interests has compelled investors to be fed the information that land is scarce, and out of reach in Delhi, CONTRARY TO THE PREVAILING TRUTH. Even today, the landed cost of FSI within Delhi can be managed below Rs. 300 per sq. Ft if well transacted.

 Myth 3 – Private sector can’t participate in Delhi

Yes, historically, the major developments in Delhi were undertaken by the DDA, which would find itself severely constrained with the scale of development that Delhi envisages over the next 10-15 years. Hence, the townships, residential and commercial segments would either be developed on the PPP model, or by the private developers. Relevant directions have already been set in motion towards the same, till now.

 Myth 4 – Surrounding markets are more attractive today

 I would rather express my own investment rationale & sentiment to this myth. “I would rather invest in the capital of the country, with a pent up demand for 2 million homes with the prices being lower than the surrounding cities, where whatever I may decide to develop would sell faster than anyplace else.” What else reasoning do I give to the queries?

 Myth 5 – Delhi would have limited development potential

 My good friend Ashok Jain always counters my queries with his favourite quip –“Where in India do you find a city which requires everything from low cost housing units to the top end farm houses, office space to malls, race courses to golf courses, amusement parks to Industrial parks, guest houses to warehouses, all willing to be developed yesterday”. To top it all, the Delhi master plan MPD 2021 has identified most of these needs and encourages the private participation in all these segments. Do I close my eyes to this piece of the pie?

 As for opportunity zones, one can seek participation both in the New 05 cities being developed under Delhi or for the redevelopment of the existing habitation areas. The five new cities that Delhi would create like Dwarka & Rohini, spread over more than 10,000 hectares each, would be self sustaining economic cells which would offer everything for “walk to work” to “quantum increment in the QUALITY of life”. These are essentially spread over the three primary zones of P-II, N and L zone of Delhi MPD (see chart above)

 My mother always says this – “If you have and well intentioned and capable friend, you won’t need a mirror”. The same logic applies to the business environs where we work, sometimes as the MIRROR, and sometimes as the impression.

 Our solemn advice is for the investors to seek out a consultant who has deep rooted insight into the opportunity zones, someone who understand both ends of the spectrum, bird’s eye view of policy & future resonance as well as the Ground reality of MPD 2021.

 This article is to express our conviction drawn over years of research, diligence and investments which have yielded more than expectations. I would only be willing to paint every critic and cynic with our optimism. I am just one phone call away.

The author, AJAY DABAS, is part of the Founding team of  www.delhi-masterplan.com  and can be contactedon help@delhi-masterplan.com

Something from the chain mails which I thought must be shared with as many as possible.

WHO PACKS YOUR PARACHUTE?    

Charles Plumb was a US Navy jet pilot in Vietnam After 75 combat missions, his plane was destroyed by a surface-to-air missile. Plumb ejected and parachuted into enemy hands. He was captured and spent 6 years in a communist Vietnamese prison. He survived the ordeal and now lectures on lessons learned from that experience!

One day, when Plumb and his wife were sitting in a restaurant, a man at another table came up and said, ‘You’re Plumb! You flew jet fighters in Vietnam from the aircraft carrier Kitty Hawk ….You were shot down!’
‘How in the world did you know that?’ asked Plumb..
‘I packed your parachute,’ the man replied. Plumb gasped in surprise and gratitude. The man pumped his hand and said, ‘I guess it worked!’

Plumb assured him, ‘It sure did. If your chute hadn’t worked, I wouldn’t be here today.’

Plumb couldn’t sleep that night, thinking about that man. Plumb says, ‘I kept wondering what he had looked like in a Navy uniform: a white hat; a bib in the back; and bell-bottom trousers. I wonder how many times I might have seen him and not even said ‘Good morning, how are you?’ or anything because, you see, I was a fighter pilot and he was just a sailor.’ Plumb thought of the many hours the sailor had spent at a long wooden table in the bowels of the ship, carefully weaving the shrouds and folding the silks of each chute, holding in his hands each time the fate of someone he didn’t know.

Now, Plumb asks his audience, ‘Who’s packing your parachute?’ Everyone has someone who provides what they need to make it through the day. He also points out that he needed many kinds of parachutes when his plane was shot down over enemy territory — he needed his physical parachute, his mental parachute, his emotional parachute, and his spiritual parachute. He called on all these supports before reaching safety.

Sometimes in the daily challenges that life gives us, we miss what is really important. We may fail to say hello, please, or thank you, congratulate someone on something wonderful that has happened to them, give a compliment, or just do something nice for no reason. As you go through this week, this month, this year, recognize people who pack your parachutes.

I am sending you this as my way of thanking YOU for your part in packing MY parachute.

DONT SCREW AROUND !!    

Once upon a time, a young lad was born without a belly button. In its place, was a silver screw. All the doctors told his mother that there was nothing they could do. Like it or not, he was stuck with it….. he was screwed.

All the years of growing up was real tough on him, as all who saw the screw made fun of him. He avoided ever leaving his house…. and thus, never made any friends.

One day, a mysterious stranger saw his belly and told him of a swami in Tibet who could get rid of the screw for him. He was thrilled. The next day, he took all of his life’s savings and bought a ticket to Nepal.

After several days of climbing up steep cliffs, he came upon a giant monastery. The swami knew exactly why he had come. The screwy guy was told to sleep in the highest tower of the monastery…. and the following day when he awoke, the screw would have been removed.
The man immediately went to the room and fell asleep. During the night while he slept, a purple fog floated in an open window, bearing in its mist, a solid silver screwdriver. In just moments, the screwdriver removed the screw and disappeared out the window.

The next morning when the man awoke, he saw the silver screw laying on the pillow next to him. Reaching down, he felt his navel, and there was no screw there!

Jubilant, he leaped out of bed…… and his butt fell off.

The moral to this story is: ‘Don’t screw around with things you don’t understand…….. you could lose your behind.’

I entered the realty industry on a promise, in 2005. As someone with a prolonged stint in the corporate world, I was always impressed with the numbers, esp. the size of the market, the employment & innovation opportunities, the healthy growth rate, the pent-up demand and the investment opportunities.

 However, the last 5 years haven’t been exactly as it was planned, both personally, as much as for the industry. When the Industry was on a roll, it resisted regulation of any sort, as was wont. The common wisdom as typical American – “why fix something when it isn’t broke”. (though America boasts of one of the best regulated Real estate Industry).WHY SO???

 Let us compare the Telecom Industry, which is comparatively younger in India. Within the last 20 years or so, the Industry has grown multi-fold by increasing consumption, offering cutting edge products and services, as well as have a singular authority regulating the Industry and setting benchmarks for the future.

The very mission of TRAI announces : “The mission of Telecom Regulatory Authority of India (TRAI) is to ensure that the interests of consumers are protected and at the same time to nurture conditions for growth of telecommunications, broadcasting and cable services in a manner and at a pace which will enable India to play a leading role in the emerging global information society”.

 Cut to the real estate industry : The real estate Industry is functioning under no singular guidelines, respective states and organizations carry forward the business as it “presumes” good for the Aam-aadmi, the Aam-Aadmi is still hoping for salvation, there are no benchmarks and set standards, and most of all, an industry forecasted to grow to almost 100 billion dollars in size, seems headed in multifarious directions.

 Critics, players of the Industry and part of the political class argue that the appointment of a regulator is not the solution. Per them, the diversity of the country, the fragmented polity, the governance of different states by different political parties etc. demands a much more localised governance and that one unifying body would be akin to creating a ‘toothless’ tiger. But sir(s), can we create a single starting point? Can we have one direction wherein we can all head to? Can we adapt to tried, tested, best practices already enforced elsewhere in the world? Can the same India be any different in the realty industry compared to the IT, Telecom, services industry? Can we have a level playing field for all existing as well as intending players? Can we try and

 Possibly, vested interest and the lack of a coercive will is the biggest reason. The Mango people (aam-aadmi) deserves to remain a fruit to be milked of their juices, in the eyes of the policy maker. How come that we have certain norms in “A” industry, and can’t be enforced in the Real estate Industry? A clear indication that the Industry is not unified, and that the policy makers have a “VALID” reason not to enforce a singular norm across the country / Industry.

 The unfortunate direct loser of this apathy is the consumer; followed by the Industry @ large, which seems myopic in intent.

 No better time than today to enforce this… bring in a regulator for the real estate industry in India. The benefits would run across the spectrum. The central government would miss the chance to string all the states, either by conviction, or coercion, if not availed now.

 The 100 day agenda of the Ministry of Urban development released vide the press release on the 29^th June’09 mentions this :

Point # 16          Real Estate Regulator for Delhi – Real Estate Management (Regulation & Control) Bill for NCT of Delhi will be taken up for decision.

If Delhi is serious, and rolls out a credible implementation plan, that would be the precursor of the regulator pan-India.

 It is time we seriously considered “Consumer interest”, rather than keep trying to paint the Donkey to look like the Zebra.

News article by Ruchika Bhardwaj of Certes Realty Ltd.

The title of this article is not supposed to scare, but to point out the objectivity with which the highest courts are tackling the many relevant, as well as frivolous cases filed in the Supreme court, related to the Delhi Master Plan MPD 2021.

During last week, a three Judge bench of Justice B Sudershan Reddy, P Sathasivam & G S Singhvi declined to have an early hearing to many a petitions and applications moved before it on the properties which were sealed OR related to unauthorized constructions in Delhi. The Apex court reasoned that the principal issue which they would consider first is the challenge to the validity of the Delhi master plan 2021. It also gave heed to the more than 400 odd applications which are in some way connected with the principal issue of the validity of MPD 2021. Several NGOs and vested interest parties had challenged the validity of the MPD 2021 on grounds that many of the decisions taken under the draft master plan 2021 would lead to chaos in the capital as it is already reeling under shortages of power, water, civic infrastructure, motorable roads etc.

While some counsel were pushing & pleading that the Apex court take up individual applications relating to sealing, at an earlier date than September 2009, the bench issued a cryptic rejoinder – “Never mind, suffer for some more time. It is just a question of a few days more”. Very rightly so. It has decided to address the core issue of the validity of the MPD 2021, rather than the individual applications.

One would recall that the court had said last year that the relief sought by many applicants claiming relief under the latest amendments to the master plan, as well as the various regularization of unauthorized colonies would be subject to the outcome of the matter already under the courts’ scrutiny. Moreover, a high powered committee assisting the courts in assessing the feasibility of de-congesting the city had expressed reservations on the rapidly growing population without a corresponding development of infrastructure.

Senior counsel Ranjit Kumar pointed out during the hearing last week that since most of the arguments & pleadings have been concluded, the court can fix the matter for final hearing.

We are likely to hear more about this around the 15th of September’ 09.

Like they say – “Inshallah, let brevity be injected so that we decisively move forward, rather than sway sideways”.

During the first four months of the current calendar year, a few questions were oft repeated during most of the meetings & seminars that we attended. Most of them obviously had a reference to the revival of the realty sector, and the promises, unfulfilled and yet to be made, by the scrupulous as the not so well meaning.

a) Are we headed to a hung parliament? b) If a government is formed with majority, would the agenda be any different for the incoming urban development & housing ministries? c) Would it impact the real estate prices in Delhi NCR? d) How soon do we expect changes, if any?

The first question was answered by the resounding win by the congress. We finally had a stable government which “promised to deliver differently”.

Mr. Jaipal Reddy being sworn in as the urban development minister was an indication towards the government’s intent of continuity and speed. Ms. Selja’s appointment as the minister for Housing & poverty alleviation was another ‘leg-up’ for the change in positive attitude.

Everyone was keen to know on the constitution / functioning of the ministry, the agenda and the foreseeable results. We too have been anxious to know the logical direction of the Delhi master plan 2021, as we believe that would be the singular factor to drive down the already increased and unsustainable pricing prevalent in the NCR region.

We huddled together in the first week of July’09 to analyze the prevalent & likely trends, price points, ground level realities, administration – political & bureaucratic, and most of all, the first 100 days agenda of the ministry of urban development, as well as the Ministry of Housing & Poverty alleviation, which would be a key indicator for the strategic direction of the MPD 2021 (Delhi master plan).

We rummaged through a lot of reference materials, including transcripts of debates in the Parliament & Assembly, various notifications, draft master plans, the expert committees constituted for Lal Dora / others.

Here is the good news. The first 100 day agenda of the Ministry or Urban development. Let me re-produce relevant portions of it, before we get down to the analysis of the same.

Press release – Monday, June 29th, 2009 18:52 Hrs

100 day agenda for action of Ministry of Urban development unveiled

Point # 15           Matters relating to the Delhi Master Plan 2021

“The Delhi Master Plan 2021 envisages involvement of private sector in the development of land and provision of infrastructure services as an improvement over the current scheme of large-scale development and acquisition of land entrusted to the Delhi Development Agency (DDA). Focused efforts will be made to finalize the policy. Every effort will be made to finalize the Zonal Development Plans of Delhi”.

Our Observation: The draft master plan of Delhi 2021 was notified vide S.O no. 141 dated 07.02.2007 and published in the Gazette of India. Post that, there wasn’t much action on the ground level. Many an investors, developers and home buyers are waiting in the wings, money ready, to grab land parcels when the zonal & ward plans would be notified. This clear indication would definitely motivate them. On the other hand, this news would be a major dampener for the real estate investment scenario of Gurgaon, Noida, Faridabad, Sonepat, Bhiwadi etc. Let us not forget that these markets (excepting Gurgaon to some extent) mushroomed since Delhi (read DDA) did not ensure that the supply was in any way commensurate to the demand. Delhi’s projected housing demand is in excess of 1 million homes.

Point # 16                  Real Estate Regulator for Delhi

Real Estate Management (Regulation & Control) Bill for NCT of Delhi will be taken up for decision.

Our observation: A right step in the right direction, however, one needs to be too big an optimist to see this implemented in a hurry. Also, let’s not forget that real estate being a state subject; we won’t really see uniformity a la other sectors like Telecom (TRAI) etc.

However, we also referred to office order # o-17034/18/2009-H dated 19th Feb’ 09 with the subject –“setting up of a committee to give a final shape to the model bill for regulation in real estate”.

Point # 17                    Building up 65, 000 houses by the DDA in next four years

In order to meet acute shortage of houses for urban poor, economically weaker sections and lower income groups of city of Delhi, construction of about 40,000 houses will be taken up. Tender documents for construction of such houses have already been made ready with fast mode of construction adopting pre-fabricated technology. Here, about 10, 000 houses are phased to be completed every year from the year 2010 onwards.

In addition to above, about 10,000 houses for middle-income group will be taken up on the same technology of pre-fabricated construction in four years’ time in phases.

Apart from the above, about 15, 000 houses will be completed (ongoing projects) in various phases. These houses will be constructed on conventional technology and these will be available from the year 2009 to 2011.

Our observation: There seems to be a positive movement on the ground, with some projects already underway, esp. towards Bakkarwala etc. DDA already is in possession of land parcels which can reduce the timelines. That is another point of consideration when we deduce that the current pricing levels of NCR markets would see another round of correction, when the Delhi supplies are unveiled. Our deduction is that the entry level product pricing, for mid-end housing would be reduced to < 20 lakhs, compared to the 30+ today.

The notification of the Delhi master plan 2021 would be a precursor to many a systemic changes that we are likely to see in the India real estate industry. The draft policy of “land assembly……” vide order No.F.3 (53) 2003/MP and published on the DDA website vide letter no. CEO/EL.G/102 (14) / 2009 date 11.04.09 is a departure from earlier times. Let me refer to a couple of them to highlight the attitudinal shift.

- MPD 2021 acknowledges that with the necessity for creation of infrastructure to support growth of the city at this scale, the present policy of large scale development and acquisition and its relevance in the present context needs a thorough relook. Also to involve the private sector in the assembly and development of land and provisions of infrastructure services.
- It is necessary to review and reconsider the current scheme of large scale land acquisition, development and disposal by DDA.
- Guiding principles 4.1 page 03 – Govt. / DDA to act as a facilitator with minimum intervention to facilitate integrated planned development.
- Page 07 – clause 9.1 – FAR permissible on the gross residential use in the assembled pockets – 200 ( higher than Gurgaon which is @ 175)
- FAR to be earmarked for the EWS component over & above the FAR of 200: 30 (15%)
The notification of Delhi master plan 2021, and its integration with the other agencies & watchdogs of culture, heritage etc. is extremely critical owing to the many national & international events and schedules in Delhi, over the next few years.

The intentions expressed by the various arms of the government over the past few months are indeed encouraging, and, we feel vindicated over our stand and effort invested over the past few years.

“We wait, to involve, and develop, aspirations of Delhi-ites”.