45 per cent of all projects delayed in NCR, MMR and BMR: PropEquity Research

Gurgaon, February 24 2012: PropEquity, a real estate data, analytics, data intelligence and research firm on Friday released a report on Execution Delays of Residential Projects in the National Capital Region (NCR), Mumbai Metropolitan Region (MMR) and Bangalore Metropolitan Region (BMR).

The latest report by PropEquity shows that massive 45 per cent of all projects surveyed are still under construction and are facing significant execution delays.

Several developers launched slew of projects pre 2008 crisis and are now facing severe funding crunch, increased borrowing costs, falling global macro-economic trends and dwindling housing demand.

“NCR has contributed to lot of that delay, and the major reason is that the number of projects that were launched here very large compared to MMR and BMR. The developers did not have that execution bandwidth to complete so many large sized projects and that led to delays,” Samir Jasuja, founder and chief executive officer at PropEquity said.

NCR was the worst performer of the three as just 23 per cent of the projects were completed by January 2012, MMR was at 61 per cent, while BMR’s performance was better as 66 per cent of its projects were completed.

The significant construction delays in the NCR region were primarily due to large-scale construction of residential projects in Gurgaon, Noida and Greater Noida. The execution timelines were further extended due to delays in obtaining regulatory sanctions in NCR.

NCR was again lagging behind MMR and BMR in timely delivery of both small and large sized projects.

Within NCR, affordable housing faced the major brunt of delays, as 92 per cent of all projects were delayed, followed by 76 per cent delay in the mid-end housing projects and luxury housing at 72 percent.

Last year, farmers protest on land acquisitions led the Supreme Court canceling construction of residential flats in Noida Extension, which tanked absorption, prices and supply.

Of the delayed projects in the three regions, 40 per cent may be delivered by December end of 2012 as they are at the finishing stage and would be completed in the next few quarters. About 12 per cent of the delayed projects are expected to be delivered by 2014 end as they are most likely at excavation stage and would need around three years for completion.

Within BMR, 33 per cent of the affordable housing projects were delayed, followed by 31 per cent delay in the mid-end housing projects and luxury housing at 45 per cent. While in MMR, 37 per cent of the affordable housing projects were delayed, 36 per cent delay in the mid-end housing projects and luxury housing at 48 per cent.

“The issue with MMR is that it takes a lot of time to get all necessary clearances before a developer can start construction which led to execution delays in this region,” Jasuja added.

The latest report further shows that small-sized projects (under 300 units) saw 62 per cent completion rates compared to just 23 per cent completion rate for large sized projects (above 300 units). Large-size projects are developed in phases, and realtors launch subsequent phases based on housing demands in that region.

The Research Study by Gurgaon-based firm talks about the projects that were launched during January 2007 to June 2009, and were expected to be delivered by January 2012. About 1,920 projects were surveyed and evaluated for the extensive survey, which showed clear warnings of execution delays in the region.

The residential market includes Apartments, Villas and Independent floors.

About PropEquity:

PropEquity is India's leading Real Time Data, Analytics, Real Estate Business Intelligence and Research Company tracking over 45,000 projects of 8,500 Developers across all Asset Classes in Real Estate.

We are soon launching India's biggest initiative in the field of Real Estate Research for Consumers helping them make informed investment decisions through our unique offering of One One Click Report, which will be an indispensable tool in the hands of a consumer.

PropEquity has over 100 prestigious Institutional Clients including Developers, Private Equity Funds, Industries related to Construction, Banks and Equity Research Firms.

PropEquity operates five verticals 1) Data, Analytics and Research & Consulting, 2) Collateral Risk Management, 3) Realty Indices including the Housing Start up Index (HSUI) , 4) Catchment Area Analysis and 5) B2C platform offering One Click Report.