Luxury floors push South Delhi realty up 105% as HNIs, NRIs flock to AIFs for returns: Report

South Delhi has experienced a significant rise in property prices, with increases between 64% and 105% over the past three years, according to a report from the Golden Growth Fund (GGF). This surge has been particularly pronounced in luxury and independent floors across Category-A and Category-B colonies. For instance, in Category-A colonies, the price of a 6000 sq. ft. floor has escalated by 105%, now ranging from Rs 36 to 45 crore, up from Rs 18 to 22 crore in June 2022. The demand for such properties is driven by the area’s strategic location and the prestige associated with owning a property in South Delhi. 

“South Delhi is today the most premium real estate market with per sq. ft. rate in a Cat-A colony ranging between Rs 60,000-Rs 90,000 and in Cat-B colony between Rs 36,000-Rs 56,000, depending upon floor and colony,” stated Ankur Jalan, CEO of Golden Growth Fund. The area is becoming increasingly popular among startup founders and businessmen, who value privacy and customised spaces. Its proximity to key commercial hubs and the airport further enhances its appeal. The region’s infrastructure and connectivity are also significant factors contributing to its desirability.

In Category-B colonies, the price for a 2500 sq. ft. floor has risen by approximately 70%, with current prices between Rs 8.5 and 11 crore. This increase is part of a broader bullish trend in the real estate market, driven by a consistent demand and substantial returns on investment. “The real estate market in the last three years has been bullish. However, what separates South Delhi from the rest is the consistent demand, reliable and safe investment, and substantial returns,” Jalan added. Investors are particularly attracted to the area’s potential for capital appreciation and rental yields.

The redevelopment potential in South Delhi remains robust, with an estimated value of Rs 5.65 lakh crore across 42 MCD-regulated colonies. Among these, plots (both occupied and vacant) in Category A & B colonies alone account for over Rs 5.35 lakh crore. This potential has drawn significant interest from high-net-worth individuals (HNIs), non-resident Indians (NRIs), and family offices. The area’s redevelopment prospects offer a lucrative opportunity for investors looking to capitalize on the growing demand for premium properties.

Ankur Jalan also noted a shift in investment strategies, stating, “HNIs, NRIs and family offices, who earlier invested in local properties without the cushion of compliance and safety, are making investments in AIFs that invest in these colonies. With returns as high as 18-20% without the hassle of maintenance, AIFs have opened a new avenue for these investors.” This interest is further fuelled by the high returns on investment and the strategic importance of South Delhi’s real estate. The emergence of AIFs as a preferred investment vehicle highlights the evolving landscape of real estate investment in the region.

As one of the most sought-after real estate markets in India, South Delhi continues to outperform its peers due to its attractive investment profile. Colonies such as Mayfair Garden, Panchsheel Park, Anand Niketan, Vasant Vihar, and others are witnessing substantial investments, bolstered by their established infrastructure and connectivity. These colonies offer a blend of luxury and convenience, making them ideal for affluent buyers.

The strategic location, coupled with the safety of the asset against capital depreciation, has made South Delhi a reliable choice for investors seeking long-term gains. This trend highlights the ongoing transformation of the region into a hub for affluent buyers seeking both luxury and investment security. The sustained growth in property values underscores the region’s status as a premier investment destination.