Will luxury project 'Delhi One' find enough takers?

This episode of Prime Property looks at upcoming luxury project called 'Delhi One' located in Noida on the outskirts of Delhi and why realty gaints like Housing Development and Infrastructure ( HDIL ) and Unitech are in trouble.

'Delhi One' is built by local developer 3C, the starting price of a flat here is at a whopping Rs 20 crore. The apartment size is 7,500 square feet of super area, not carpet area.

3C is charging top dollar for getting these luxury residences branded by the Four Seasons Hotel. A 250-key Four Seasons Hotel is also being built at this site. 3C tells me there will be no per square feet rate for these apartments.

There will also be six big apartments having a super area of 15,000 square feet. 3C may actually auction these six apartments and it believes each of them should actually cost Rs 40-50 crore rupees.

Also read: India among world's top 20 realty investment mkts: Report

Larsen and Toubro (L&T) has the contract for the construction and the plan includes a hotel and three towers. We don't have pictures but the hotel and the residential tower will be connected with what 3C calls a Sky Lounge.

However, the Prime Property team found a slum and a sewage drain around 200 meters away from this high value project.

HDIL in deep trouble:

HDIL is feeling the earth shift under its feet. The bleeding which started in January in the form of a cash-flow crisis continue and investors, who started selling after the promoters sold a 1.2 percent stake in the company to raise Rs 57 crore on the 21st of January, are not easing up on the pressure. The stock continued its downwards spiral, collapsing to an all time low.

The beating for HDIL got worse after rating agency CARE, downgraded the company citing failure to make interest payments on Non-Convertible Debentures (NCDs) to the tune of Rs 2,059 crore. According to Company sources roughly Rs 2 crore of interest payment due in February was delayed till March, as HDIL's accounts has been temporarily frozen by the service tax department.

HDIL is working on getting its finances in shape as soon as possible. CNBC-TV18 learns one of these steps include repaying Punjab National Bank a sum of Rs 150-180 crore by March 31. The funds for this will come from the sale of two acres of land in Andheri in the third quarter. The land was sold to Adani Group for Rs 900 crore and it reflected in HDIL's third quarter numbers.

HDIL is looking at more ways to finance its mammoth Rs 4,000 crore debt going forward, with an aim to bring it down by Rs 1,000 crore over the next 12 months. However, it is a long bumpy road ahead for the company and it has to act swiftly to regain if investor confidence.

Power to consumers in Gurgaon

Unitech is also facing a similar nightmare. Besides the trouble its promoter Sanjay Chandra is facing on account of the 2G mess, Unitech has been getting flak from buyers in Gurgaon for its Nirvana South Close project. This project, pegged at around Rs 300 crore has flats selling at over Rs 2 crore.

Apartment buyers had moved a District Court in Gurgaon alleging that Unitech had changed the original layout plan and relocated the area earmarked for building apartments for the economically weaker section. The Gurgaon Court passed an order in favour of the apartment association, and stayed Unitech from further construction at the site.

Unitech is not the only one under consumer fire. Even DLF 's buyers in Gurgaon had won a case at the competition commission of India (CCI) against the company for increasing the number of floors in its luxury projects like the Belaire, Park Place and Magnolia without the consent of buyers. DLF was fined Rs 630 crore by the competition watchdog, and its appeal is now before the Competition Appellate Tribunal (COMPAT).

The government in Haryana seems to have taken note and the Gurgaon town and country planning department has come out with a new directive to empower consumers.

Developers will now have to get approvals from flat buyers and investors to make any changes in layout plans, especially those related to the green belt and open spaces. Till now it was not mandatory for developers to share details of a project's layout plan or any proposed changes. Buyers will have upto 30 days to object.