Risks and Rewards of Investing in Delhi’s L-Zone: Risks and Rewards of Investing in Delhi’s L-Zone
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L-zone
8 May 2019 - 8:00, by , in NRI, No comments

Delhi Development Authority (DDA) has begun the master plan of L-zone to facilitate the growing housing need in Delhi. Located in South-West Delhi and spread across 22,840 hectares of land, the L-Zone is expected to give a stimulus to the slow and stagnant real estate market of the national capital. It is close to Indira Gandhi International Airport and is strategically positioned between Dwarka and Gurgaon.

Under the development plan, Delhi has been divided into 15 zones and among these the L-zone is the largest. These zones are open for purchase of land. Housing societies/private developers have shown a keen interest and presented their investment plans. While early buyers in the region could benefit, they should study the project in which they intend to invest & check all the relevant papers.

The Delhi government has not yet enacted the land pooling policy, which has already been approved by the centre and notified. Once adopted, landowners in the L-Zone can submit their land to the DDA. The authority will take 40 percent of the total land area for development of roads, sewerage, drainage and other civic amenities. After the roads, and water, power, sewage lines are laid, a part of the developed land will be returned to the owners who can then build apartments on it by partnering with real estate developers. The delivery of completed apartments is likely to begin in 2019. The location will soon become an essential destination in the NCR.

The land pooling policy is going to fuel a housing boom in the capital with 24 lakh dwelling units to become available in the next five years to serve the housing needs of the projected population of 230 lakh by 2021. This policy will be the way forward in Delhi as land acquisition has become a cumbersome process. The policy is applicable in 95 villages of the five zones- K-I, L, N, P-II and J. Concerning L zone, it is an individual choice for the owners to give their land to DDA for development. It will take about five to seven years for the policy to be implemented and for the flats to be completed for occupancy. It is only applicable to vacant land available in the respective zones and not to illegal colonies. The pricing of projects will depend on the facilities and amenities being offered by individual developers. As per the policy, a group of landowners shall be permitted to pool land for planning, servicing and share the area for development.

Of the total five zones, Zone N and L have the required physical and economic characteristics to evolve as self-sufficient sub-cities. Zone L is situated next to Dwarka which recently got a new water treatment facility. It has the most massive land pocket and includes parts of Najafgarh, Dichaon Kalan, Qazipur and Samaspur Khalsa.

The L-Zone is in the early stages of planning, and an investor can get the benefit of a first-corner however certain things must be kept in mind before making any investment decision. The buyer must be well versed with the land pooling policy. It is crucial that an individual investor does a recce of the land and the project before investment. The land pooling policy has been notified and not yet operational. It may take some time for the developers or group housing societies to receive land from DDA for further development. An individual must authenticate the market reputation of the developer and the credentials of the owners of the organisation and check the track record of past deliveries.

It seems like a favourable time to invest in the L zone under DDA Master Plan 2021. However, the area will take at least four to five years to be ready for habitation. Development in these areas is going to be vertical leading to higher population density which would need robust water, sewage and transport network. Consequently, the buyers should take an investment decision only after carefully considering their requirement and the associated risks.

 

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