Development Feasibility Report- Utkarsh Sharma by Utkarsh Sharma

Development Feasibility Report

UERP Studio 2023 Utkarsh Sharma PUP22378

Development feasibility Report

Can Shahdara, a district in East Delhi, assess its potential for business growth?

By 2041, Delhi’s population is expected to reach 28-30 million. To meet the requirements of a massive population in a systematic and sustainable manner, there is need for holistic development approach. Currently, there is 220 million population out of which 0.83 million is the total workforce population. To cater to this influx, Shahdara has various employment centres, like CBD, TOD node of Karkardooma and District centres. This report aims to study the development potentiality of Sub-district centre of Shahdara.

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Table of Contents 01

Site Selection Context and Location Connectivity Site dimensions Site Appraisal

Planning Feasibility

Market Feasibility

Site Zoning Development Regulations Development Scenarios

Demand Analysis Development Cost Profit and Return on Investment

Recommendations Recommendations to the Developer Recommendations to the Development Authority

Development feasibility Report

Site Location

Site Context from the DP perspective ZDP of Zone E The Site lies in the zone E, Surrounded by 3 sides by Uttar Pradesh State and River Yamuna on one sd\ide. Planning Zone E (Trans-Yamuna Area) has a total area of 8797 ha/87.97 km.

Site Regional Context and connectivity

Surrounding Landmarks

The site is located in Eastern part of Delhi in Vishwas Nagar, Shahdara. The Site is well connected by three metro lines i.e. Red-line, Pink-Line and Blue-Line, all within 2 km radius. Vishwas Nagar is also well-served by buses, and there are several major roads that connect it to other parts of Delhi. Vishwas Nagar is a commercial center in Shahdara, with a number of shops, markets, and banks. The area is also home to several large office buildings and industrial complexes. Vishwas Nagar is located close to other commercial hubs in East Delhi, such as Preet Vihar, Laxmi Nagar, and Karkardooma. This makes it a convenient location for businesses and individuals who need to be close to other commercial areas. Page no. 1

Site Selection

Location of Zone E in context of Delhi

The site is located in Sub-district centre of Delhi

Page no.2

Development feasibility Report

Site Appraisal

Road Network connectivity with the site

The plot of land is well-connected to the surrounding area, with a 60-meter wide main road on one side and 24-meter wide roads on the other three sides. This provides a number of benefits, including: 1. Easy access for fire trucks and other emergency vehicles: In the event of an emergency, fire trucks and other emergency vehicles will be able to easily access the site from any side. This can help to minimize damage and loss of life. 2. More commercial frontage: Site’s multiple access points make it ideal for businesses that rely on street traffic to generate customers. The additional commercial frontage can also be used to generate additional revenue for the property owner. 3. Increased visibility: The plot’s location on a busy road makes it highly visible to potential customers. This can be a major advantage for businesses that are trying to attract new customers. 4. Improved property value: Property values in areas with good connectivity are typically higher than in areas with poor connectivity. This is because well-connected areas are more attractive to businesses and residents. Page no. 3

Site Selection

Site Dimensions

The Site is located in closed proximity with Karkardooma TOD zone and also is in close proximity with IP University and Yamuna Sports Complex giving it a amenity boost. It is in close proximity with three metro lines which enhances it connectivity with Delhi-NCR. Retail PotentialDue to its locational advantages the site has a potential to gauge on its retail potential and can attract higher rental yields.

Page no. 4

Development feasibility Report

TOD Influence Zone

Site Zoning in respect with ZDP

Site nearby context- The site is connected with 3 metro lines

The site lies within 1km radius of TOD influence zone which focuses on creating high density mixed land use development of areas falling in the influence zone of transitstations, i.e. within a walking distance of 500-800 m or along the transit corridor, provided the station is within 1km of site

TOD Influence Zone- 800m

Page no. 5

Planning Feasibility

The site has a blend of commercial and residential zones

The Site is located in commercial zone with District centre

Page no. 6

Development feasibility Report

Development Control Regulations

10500 m²

Built form Based on the Regulation

25% GC 10500 m²

75%

25% GC

Planning Feasibility

75%

Development Control Regulations

Page no. 7

Parking Regulations allowed

Page no. 8

Development feasibility Report

Planning Scenarios 1- Retail+Office space

Area Statement Area statement - Scenario 1 Commercial Regulations Plot Area (sqm) Base FSI Achieved Built up area (sqm) Green Incentive FAR Additional purchasable built up Total permissible BUA (sqm) Net Plot Area Road Margin Deduction (front, side, side, rear) 15m ;12m ;12m ;12m Max.Permissible Ground coverage

S.no. 1 2 3 4 6 7 8 9 10

12 13

Brief

16 Green cover

Increased property values: Retail+office projects can help to increase property values in the surrounding area. This is because they attract businesses and residents, which can lead to increased demand for housing and other amenities. Envisioned Form Plot Area- 10500 m Max FSI- 1.5 Max Built-up- 15750 m2 Net Plot Area - 7920 m2 N0.of Floors - 4 Parking rqd - 473 ECS Open Space - 6825 m2 2

Page no. 9

Planning Feasibility

Convenience: Retail+office projects can be a convenient option for businesses and employees, as they offer both office space and retail amenities in one location. This can save businesses time and money on commuting and other expenses. Attractiveness: Retail+office projects can be more attractive to tenants and customers than traditional office buildings. This is because they offer a variety of amenities, such as shops, restaurants, and cafes, which can make the work environment more pleasant and productive.

Basement Number of floors Total Height 15 Open space

17 Green cover Required Parking Parking spaces can be used in setback Basement Parking

Item no.

Area 10500 1.5 15750 0 0 15750 7920 2580 3675

When there is setback of 6m and above, it should be after leaving required 6.0 m from plot boundary

9306 4.29 17.14 6825

Floor to floor ht considered 4 m

Since building is Category 1(5000- 1 tree for every 80 20,000 sqm) sq.m. 196.88 Out of 75% of open space, 20% of the space shall be pervious. 1365 3 ECS / 100 sqm 473 Open area= 23 m2 per ECS Basement= 32 m2 per ECS

112 291

Rest 70 parking can be achieved 403 from open space

Total Parking achieved Net Open space left

1610

5215

Land Costs- (Purchase Model) LAND COSTS Land Rate (in sqm)

56640

Use Factor Land Use

3 Commercial

Property Type

Non Agricultural Plot

Area (in Sqm)

10500

Land Price

₹

1,78,41,60,000

₹

4,20,00,000

Stamp Duty (7%)

₹

12,48,91,200

Registration Fees

₹

1,78,41,600

External Development Charge

4000/ sqm for East Zone in Delhi

Total (in crores)

₹

197 Page no. 10

Development feasibility Report

Building Permit costs

Total Revenue Generated

BUILDING COSTS

Revenue Generation

4394250 105000

Building Construction cost Rs.279/sqm Building Permit Fee Rs 10 / sqm Application for completion certificate Rs 10 / sqm of covered area Preoccupancy Charges Rs 2000 per sqm for commercial

105000 21000000

Fees for Inspection of completion work till plinth lvl Rs 500/ sqm Betterment Levy Rs.700 for plots above 50 sqm Additional FAR Rs. 450 per sqm for additional FAR Parking Charge for one ECS per 50 sqm of plot area

66500

13965000

Parking provision in Basement & Stilt (Free from FAR)and open Setbacks (per ECS)

50000

14540625

Total (in crores)

₹

Total (in crores)

Commercial

5250

First

Commercial

Second

Office 100000 per ECS

15750

26910

₹

1 Land Cost 2 Building Permit Cost 3 Construction Cost Total

197 6 42

Price Escalation Factor (@10% yearly) Year 1 Year 2 Year 3

245

1.1 1.2 1.3

Total (in crores)

269.5 296.45 326.095

₹

326.10

Page no. 11

193752

Total Revenue 1017198000 Generated

5250

129168

678132000

101.7198

5250

107640

565110000

67.8132

47250000

56.511

Price Appreciation Factor (@10% yearly) Year 1

253.8459

1.1

Year 2

279.23049

1.2

Year 3

307.153539

1.3

Year 4

337.8688929

Year 5

371.6557822

Profitability= Capital-Revenue

Total Capital Investment Total COST ASSESSMENT Purchase of Land

Ground

Profitability of the Project

Rate per sqm

Area in sqm

4.725

Planning Feasibility

Area

Use

230.769

Construction Cost Construction Cost

Floor

Parking Sale (Per ECS)

7875000 7350000

Average Capital Value/ sqm Revenue

Base Year Year 1

Year 2

Year 3

Year 4

Year 5

Occupancy Ratio

0.2

0.4

0.6

0.8

Total Inflows (Commercial+Office)

50.76918

111.692196

184.2921234

270.2951143

371.6557822

Total Outflows (Commercial+Office)

-326

-65.2

-13.04

-2.608

-0.5216

-0.10432

Profit before tax (Commercial+Office)

-326

-14.43082

98.652196

181.6841234

269.7735143

371.5514622

Accumulated Losses/ Profits

-652

-79.63082

85.612196

179.0761234

269.2519143

371.4471422

29.5956588

54.50523702

80.9320543

111.4654387

-326

-14.43082

98.652196

181.6841234

269.7735143

371.5514622

Income Tax@ 30% Net Cash Flow

NPV(Net Present Value)

224.42

Discount Rate

0.12

IRR

30%

Net Present Value- 224.42 IRR- 30%

PROFITABILITY Total Inflows (Commercial+Office) Total Outflows (Commercial+Office) Linear (Total Inflows (Commercial+Office)) 500 400 300 200 100 0 -100 -200 -300 -400

371.6557822

0 1

50.76918 -65.2 2

111.692196

184.2921234

270.2951143

-13.04

-2.608

-0.5216

-0.10432

-326

An IRR of 30% means that the project is expected to generate a return on investment of 30% per year. This is a very high return, and it is well above the cost of capital for most businesses. Page no. 12

Development feasibility Report

Land Costs- (Lease Model)

Total Revenue Generated Revenue Generation

LEASE COSTS

Ground rent is payable annually in advance @ 2.5% of the cost of land as given in the Allotment cum LeaseRent /Ground Rent Demand Letter in respect of all Rate (in sqm) 44604000 allotment on lease hold basis. Stamp Duty (1%) (One-time) 16057440 Land Use Commercial Property Type Non Agricultural Plot Area (in Sqm) 10500 Lease Period 10 years Total Lease Rent 446040000 External Development Charge 4000/ sqm for East Zone in Delhi 42000000 Registration Fees 0

₹ 49

Total (in crores)

Use

Area in sqm

Average Average Rental Rental Value Value for Lease/ for Lease/ Year Revenue month

Commercial

5250

1450

17400 ₹

9,13,50,000

Commercial

5250

Office

5250

1300

15600 ₹

8,19,00,000

1150

13800 ₹

7,24,50,000

₹

Profitability of the Project The lease cost for 10 years is 49 crores, and the revenue generated can 245 cr for 10 years giving a average profit of 200 cr.

Building Permit costs

Planning Feasibility

BUILDING COSTS

4394250 105000

Building Construction cost Rs.279/sqm Building Permit Fee Rs 10 / sqm Application for completion certificate Rs 10 / sqm of covered area Preoccupancy Charges Rs 2000 per sqm for commercial

105000 21000000

Fees for Inspection of completion work till plinth lvl Rs 500/ sqm Betterment Levy Rs.700 for plots above 50 sqm Additional FAR Rs. 450 per sqm for additional FAR

7875000 7350000

Parking Charge for one ECS per 50 sqm of plot area

66500

13965000

Parking provision in Basement & Stilt (Free from FAR)and open Setbacks (per ECS)

50000

14540625

Total (in crores)

₹

Construction Cost Construction Cost

Area

Total (in crores)

15750

Rate per sqm

₹

26910

Page no. 13

Page no. 14

Development feasibility Report

Planning Scenarios 1- Retail Commercial space

S.no. 1 2 3 4 6 7 8 9 10

12 13

Brief

16 Green cover

Increased property values: Commercial spaces can help to increase property values in the surrounding area. This is because they attract businesses and residents, which can lead to increased demand for housing and other amenities.

Envisioned Form Plot Area- 10500 m Max FSI- 1.5 Max Built-up- 15750 m2 Net Plot Area - 7920 m2 N0.of Floors - 4 Parking rqd - 473 ECS Open Space - 6825 m2 2

Page no. 15

Planning Feasibility

Economic growth: Commercial spaces are essential for economic growth, as they provide a place for businesses to operate which can lead to job growth and increased tax revenue. Vibrant communities: Commercial spaces can help to create vibrant and livable communities by providing residents with access to a variety of amenities, such as shops, restaurants, and entertainment venues.

Basement Number of floors Total Height 15 Open space

17 Green cover Required Parking Parking spaces can be used in setback Basement Parking

Item no.

Area 10500 1.5 15750 0 0 15750 7920 2580 3675

When there is setback of 6m and above, it should be after leaving required 6.0 m from plot boundary

9306 4.29 17.14 6825

Floor to floor ht considered 4 m

112 291

Rest 70 parking can be achieved 403 from open space

Total Parking achieved Net Open space left

1610

5215

Land Costs- (Purchase Model) LAND COSTS Land Rate (in sqm)

56640

Use Factor Land Use

3 Commercial

Property Type

Non Agricultural Plot

Area (in Sqm)

10500

Land Price

₹

1,78,41,60,000

₹

4,20,00,000

Stamp Duty (7%)

₹

12,48,91,200

Registration Fees

₹

1,78,41,600

External Development Charge

4000/ sqm for East Zone in Delhi

Total (in crores)

₹

197 Page no. 16

Development feasibility Report

Building Permit costs

Total Revenue Generated

BUILDING COSTS

Revenue Generation

4394250 105000

Building Construction cost Rs.279/sqm Building Permit Fee Rs 10 / sqm Application for completion certificate Rs 10 / sqm of covered area Preoccupancy Charges Rs 2000 per sqm for commercial

105000 21000000

66500

13965000

Parking provision in Basement & Stilt (Free from FAR)and open Setbacks (per ECS)

50000

14540625

Total (in crores)

₹

Total (in crores)

Commercial

5250

First

Commercial

Second

Commercial 100000 per ECS

15750

26910

₹

1 Land Cost 2 Building Permit Cost 3 Construction Cost Total

197 6 42

Price Escalation Factor (@10% yearly) Year 1 Year 2 Year 3

245

1.1 1.2 1.3

Total (in crores)

269.5 296.45 326.095

₹

326.10

Page no. 17

193752

Total Revenue 1017198000 Generated

5250

129168

678132000

101.7198

5250

118404

621621000

67.8132

47250000

62.1621

Price Appreciation Factor (@10% yearly) Year 1

260.06211

1.1

Year 2

286.068321

1.2

Year 3

314.6751531

1.3

Year 4

346.1426684

Year 5

380.7569353

Profitability= Capital-Revenue

Total Capital Investment Total COST ASSESSMENT Purchase of Land

Ground

Profitability of the Project

Rate per sqm

Area in sqm

4.725

Planning Feasibility

Area

Use

236.4201

Construction Cost Construction Cost

Floor

Parking Sale (Per ECS)

7875000 7350000

Average Capital Value/ sqm Revenue

Base Year Year 1

Year 2

Year 3

Year 4

Year 5

Occupancy Ratio

0.2

0.4

0.6

0.8

Total Inflows (Commercial+Office)

52.012422

114.427328

188.8050919

276.9141347

380.7569353

Total Outflows (Commercial+Office)

-326

-65.2

-13.04

-2.608

-0.5216

-0.10432

Profit before tax (Commercial+Office)

-326

-13.187578

101.387328

186.1970919

276.3925347

380.6526153

Accumulated Losses/ Profits

-652

-78.387578

88.3473284

183.5890919

275.8709347

380.5482953

30.4161985

55.85912756

82.91776042

114.1957846

-326

-13.187578

101.387328

186.1970919

276.3925347

380.6526153

Income Tax@ 30% Net Cash Flow

NPV(Net Present Value)

238.60

Discount Rate

0.12

IRR

31%

Net Present Value- 238.60 IRR- 31%

PROFITABILITY Total Inflows (Commercial+Office) Total Outflows (Commercial+Office) Linear (Total Inflows (Commercial+Office)) 500 400 300 200 100 0 -100 -200 -300 -400

380.7569353

0 1

52.012422 -65.2 2

114.4273284

188.8050919

276.9141347

-13.04

-2.608

-0.5216

-0.10432

-326

An IRR of 31% means that the project is expected to generate a return on investment of 31% per year. This is a very high return, and it is well above the cost of capital for most businesses. Page no. 18

Development feasibility Report

Land Costs- (Lease Model)

Total Revenue Generated

LEASE COSTS

Revenue Generation

₹ 49

Total (in crores)

Use

Area in sqm

Average Average Rental Rental Value Value for Lease/ for Lease/ Year Revenue month

Commercial

5250

1450

17400 ₹

9,13,50,000

Commercial

5250

1300

15600 ₹

8,19,00,000

Commercial

5250

1301

15612 ₹

8,19,63,000

₹

Profitability of the Project The lease cost for 10 years is 49 crores, and the revenue generated can 245 cr for 10 years giving a average profit of 200 cr.

Building Permit costs

Planning Feasibility

BUILDING COSTS

4394250 105000

Building Construction cost Rs.279/sqm Building Permit Fee Rs 10 / sqm Application for completion certificate Rs 10 / sqm of covered area Preoccupancy Charges Rs 2000 per sqm for commercial

105000 21000000

Fees for Inspection of completion work till plinth lvl Rs 500/ sqm Betterment Levy Rs.700 for plots above 50 sqm Additional FAR Rs. 450 per sqm for additional FAR

7875000 7350000

Parking Charge for one ECS per 50 sqm of plot area

66500

13965000

Parking provision in Basement & Stilt (Free from FAR)and open Setbacks (per ECS)

50000

14540625

Total (in crores)

₹

Construction Cost Construction Cost

Area

Total (in crores)

15750

Rate per sqm

₹

26910

Page no. 19

Page no. 20

Development feasibility Report

Recommendation to the developer

Recommendation to the development Authority 1. Allow for TOD zone incentives

PROFITABILITY

These may include Higher FSI, Built-to line, Higher ground coverage adn this will promote less on-street parking as well as promote walkability.

Total Inflows (Commercial+Office) Total Outflows (Commercial+Office) Linear (Total Inflows (Commercial+Office)) 500 400 300 200 100 0 -100 -200 -300 -400

371.6557822

0 1

50.76918 -65.2 2

111.692196

184.2921234

270.2951143

-13.04

-2.608

-0.5216

-0.10432

-326

Scenario 1 Retail+Office development Net Present Value- 224.42 IRR- 30%

Total Inflows (Commercial+Office) Total Outflows (Commercial+Office) Linear (Total Inflows (Commercial+Office)) 500 400 300 200 100 0 -100 -200 -300 -400

380.7569353

0 1

52.012422 -65.2 2

114.4273284

188.8050919

276.9141347

-13.04

-2.608

-0.5216

-0.10432

-326

Scenario 2 Commercial development Net Present Value- 238.60 IRR- 31%

Scenario 2 has a higher IRR of 31% and also shows a higher profitability. The recommended model should be Lease Rental model since the intial cost of investment is lower and it will be easier to do the financing for lease model. It is recommended to undertake the construction in a phased manner.

Page no. 21

Recommendations

PROFITABILITY TOD Based approach planning Source- Delhi’s TOD Policy

2. Road width based FSI

1. This promotes mixed used development, creating more vibrant communities. 2.This also reduces the enviornmental impacts by adding more greens to the site.

Building frontage with Arcade and Built-to line Source- Delhi’s TOD Policy

Page no. 22

Development feasibility Report

Appendix Surrounding District Centres Market Rates S.no Location

Use

Lease Typology Area/sqft Rental/Month Price/sqft

Price/sqm

Occup ancy Reference

1 Karkardooma

Commercial

Retail

2200

300000

136.36364

1467.8182

0.4 99acres.com

2 Janakpuri

Commercial

Retail

170

16000

94.117647

1013.0824

0.5 Magicbricks

3 Laxmi Nagar

Commercial

Retail

356

65000

182.58427

1965.3371

0.6 Magicbricks

4 Nehru Place

Commercial

Office

12000

1600000

133.33333

1435.2

0.8 Housing.com

5 Mayur Vihar

Commercial

Office

465

45000

96.774194

1041.6774

0.5 99acres.com

Bhikaji Cama 6 Place

Commercial

Office

3000

300000

100

1076.4

0.4 Housing.com

7 Saket

Commercial

Office

5000

600000

120

1291.68

0.5 Housing.com

418000

123.31044

1327.314

Average

Sources 1. https://dda.gov.in/zonal-development-plan-mpd-2021 2. http://52.172.182.107/BPAMSClient/seConfigFiles/Downloads/UNIFIED_BUILDING_BYE_LAWS_FOR_DELHI_2016.pdf 3. https://smartnet.niua.org/sites/default/files/resources/delhi_tod_policy_manual_0.pdf 4. https://wri-india.org/sites/default/files/DelhiNCR%20EG%20Report. pdf

References

5. https://igod.gov.in/organization/H84zv3QBGZk0jujBKgGW 6. https://www.magicbricks.com/property-for-rent/commercial-real-estate?bedroom=&proptype=Commercial-Office-Space,Office-ITPark-SEZ,Commercial-Shop,Commercial-Showroom&cityName=New-Delhi&areaUnit=12852&areaFrom=100&areaTo=1000 7. https://www.magicbricks.com/Real-estate-projects-Search/ residential-new-project?&proptype=Commercial-Office-Space,Office-in-IT-Park/-SEZ,Commercial-Shop,Commercial-Showroom&cityName=New-Delhi&areaUnit=12852&postedSince=-1&areaTo=1000&mbTrackSrc=tabChange&isNRI=N&page=1&category=R&multiLang=en&areaFrom=100 8. https://www.99acres.com/search/property/lease/bhikaji-cama-place?city=3&keyword=bhikaji%20cama%20place&includeCoworking=true&preference=L&area_unit=1&res_com=C

Page no. 23