Trimming of Lutyen's Bungalow Zone May Be Good For Delhi's Real Estate

In August last year, the urban development ministry invited public opinion on its plan to trim the area of the national capital's most expensive real estate, the Lutyen's Bungalow Zone (LBZ) — from 28.73 sq km to 23.60 sq km — by dropping nine localities that had been included to the earlier LBZ in early 2000s. If the media reports on the outcome are anything to go by, the government now plans to go ahead with the plan, keeping aside any resistance from champions of conservatism.

PropGuide takes a look at the plan and how the proposed changes will alter the real estate market in the national capital's LBZ, which houses India's rich and mighty:

The original plan and the alterations

The designed blueprint of the zone, envisaged by British architect Edwin Lutyen in 1912, covered an area of 19.12 sq km. The zone was demarcated for the first time 1988, covering an area of 25.88 sq km. In 2003, this was increased to the current area of 28.73 sq km. Apart from being the pivot of all political activity, the zone includes the central business district of Connaught Place, and is address of the country's rich, powerful and famous.

Area reduction: 5.13 sq km (From 28.73 to 23.60 sq km)

Losing the LBZ tag: Jor Bagh, Golf Links, Sunder Nagar, Bengali Market, Ashoka Road, Mandir Marg, Panchsheel Marg, Sardar Patel Marg and Chanakyapuri

Coming back in LBZ: The Supreme Court Complex

The vertical growth

The following are key points of the plan:

A floor area ratio (FAR) of 20, with 12.50 per cent ground coverage, has been suggested. 

These buildings will be allowed to construct basements only for household storage and car parking. 

Building height will to be restricted to 12 metres, while the number of housing units will range from one to four, depending on the plot size. 

The Delhi Master Plan, 2021, and the Delhi Building Bye-laws, 1983, will be applicable on development or redevelopment of plots for non-residential purposes.

Overall building height will be restricted to 32 metres, with up to three levels of basement for parking, which will not be included in FAR. 

The construction of a total of seven floors, including the ground floor, will be allowed.

 

The likely impact

While keeping the 'architectural character of the zone' is important, the national capital's growing space crunch cannot be ignored, either. Thousands of people flock to Delhi in search of employment every year. Making room for them in the capital's real estate is becoming increasingly important. The move will increase property for sale in Delhi 

The irony of the low-rise buildings in LBZ has been that while they are exorbitantly expensive, the strict construction norms curb their vertical growth. This not only limits the potential of this pricey land but also restricts housing options in a space-starved city. The new FSI norms will allow vertical growth and make real estate in the nine areas achieve its true potential with new apartments in central Delhi. 

About 90 per cent of the buildings in LBZ are government-owned properties, most in a great need of redevelopment. The new guidelines will also help the city preserve its past better. 

The Delhi real estate market has long saturated and offers few new properties. The government's move will give a fillip to the city's super-luxury and luxury real estate market with upcoming flats for sale in central Delhi. This will cater to the country's rich and affluent, whose number has been rising lately. 

The process to turn the heritage low-rises into grand high-rises will trigger huge construction activity in a city that has seen almost no action in the recent past. 

The under-construction properties in Delhi, especially as they will be premium ones, will bring new investments and help revive the city's stagnating real estate market.