Delhi, NCR commercial developers hit hard

Companies facing up to Rs 1-crore loss a day due to SC’s construction ban in the wake of rise in air pollution. The worst affected are malls, which are losing not only rentals but also business for retailers during the seasonal sale.
NEW DELHI: The commercial real estate industry in Delhi and National Capital Region (NCR) is facing a loss of about ?1 crore a day owing to the Supreme Courtmandated construction ban in the wake of the hazardous increase in air pollution, which has delayed projects that were scheduled for delivery in November, said leading real estate developers.
The worst affected are malls, which are losing not only rentals but also business for retailers during the seasonal sale, they said. Real estate developer DLF, for instance, had planned to open its refurbished mall in south Delhi’s Saket in mid-November but had to postpone the launch.

“We planned to launch it on November 15. Winter season sale is important for brands so they will lose on that,” said Pushpa Bector, executive director, DLF Shopping Malls.
“About 95% of the space has already been leased out while we are in the process of leasing out the remaining space. When the construction ban was announced, we were almost there — about 25 days’ work is left.”
According to another executive, who did not wish to be identified, the annual rental from this property is about Rs 115 crore, so DLF is facing a loss of Rs 30-40 lakh every day due to the delay in the launch.

“The construction ban has impacted all ongoing real estate projects, but the impact is most severe on projects which are nearing completion as the delivery of such projects is likely to be delayed,” said Pankaj Jain, managing director, Realistic Realtors, a real estate advisory firm.
“Halting of construction also adversely impacts buyer sentiment — of both end-users and investors — and results in lower transactions. At the same time, developers also need to take care of their fixed expenditure such as salary, rent and interest.”

According to the Confederation of Real Estate Developers’ Association of India (Credai), there are about 100 under-construction projects in Ghaziabad and Noida involving 20,000 workers.
“The ban also affects the completion of projects on time for which developers take the flak for no fault of theirs. While all of us are equally concerned and impacted due to pollution, we need to find an alternative mechanism at the earliest,” said Gaurav Gupta, president, Credai Ghaziabad.

Besides developers, customers as well as daily wagers are bearing the brunt of the construction ban, said Nayan Raheja, who is the executive director of Raheja Developers.

“Unfortunately, in Delhi-NCR it has become an annual phenomenon. It is imperative that all stakeholders including the authorities and developer community brainstorm and find a permanent solution to the yearly problem,” he said.

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