Central Park Resorts, Gurugram

Good projects are not always Good investments from a financial return point of view.

POSITIVES

• A good customer experience
• Acceptable build quality
• A worthwhile product for self consumption

CHALLENGES

• Price appreciation has not been as expected

LEARNINGS

• As per the builder, the project has appreciated close to 100% over a 10 year period. To an untrained mind, this may seem a handsome return and an investment in a successful project that has created wealth for the buyer.
• My Personal views, however, are contrary to the above. First, the returns, on an annual compounded basis, are (at best) average at just above 7%. Second, if the cost of money i.e. the cost of Home Loan has been any higher than 7% (which it incidentally has) then the investor has infact lost money on the principle he invested.

RECOMMENDATIONS

• The returns are expected to improve for investors as the rental returns get added to the overall returns from investment.
• The Capital Value is expected to appreciate over a period of time and will nullify the initial high cost of purchase.
• As a product, Central Park Resorts are well designed, well executed and delectable albeit delivered after considerable delays. Hence, from a self-use perspective and in its present stage, this is a wonderful project.

Good projects are not always Good investments from a financial return point of view.

And this case study underlines the lesson. Although, if the ultimate motive is/was a good place to stay and social prestige then Central Park Resorts is an excellent purchase.