Prestige Group Abandons Lutyens' Delhi Luxury Project, Shifts Focus to NCR

Prestige Group, a prominent Bangalore-based real estate developer, has decided to abandon its luxury residential project in Lutyens' Delhi due to prolonged approval delays. The group has sold the bungalow on Kasturba Gandhi Marg for approximately ₹450 crore, nearly two years after acquiring it for around ₹300 crore. The new owner is a business person with operations in Jharkhand and Kolkata.

The property, originally belonging to TDI Infratech, was initially planned as a joint development project. However, Prestige Group later took over the property entirely and aimed to transform the 5,100-square-yard land into a high-end residential project. The project was projected to generate revenues of nearly ₹700 crore and was intended to be Prestige Group's entry into the Delhi residential market.

According to real estate insiders, the developer intended to build eight to nine luxury apartments, each costing more than ₹70 crore. The concept of the project was a low-density luxury development, aligning with the strict development norms, heritage guidelines, and limited permissions for redevelopment that characterize Lutyens’ Delhi.

However, the project faced significant regulatory hurdles. Approval in Lutyens’ Delhi is notoriously time-consuming due to various layers of scrutiny, including heritage conservation rules, height restrictions, and planning controls. These issues made it extremely difficult for Prestige to move forward while adhering to the project schedule.

“The group tried hard to get the project executed, but it is a well-known fact that approvals in Lutyens’ Delhi take a long time and are complicated. Considering the limitations, Prestige has opted to shift its focus to other NCR areas where it is possible to carry out projects more quickly,” stated a person familiar with the deal, as reported by ET Times.

Moreover, the Kasturba Gandhi Marg property had an outstanding loan of around ₹225 crore, which has now been fully paid off by the Prestige Group as part of the exit strategy.

Prestige Group is now redirecting its attention to the National Capital Region (NCR), where it has been steadily expanding its residential network. The developer recently delivered its first residential project in the NCR area in Ghaziabad and is actively exploring opportunities in Noida and Gurgaon. Additionally, the company is in the final stages of an agreement to purchase a five-acre land parcel in Gurgaon, with plans to develop a large luxury housing project.

Lutyens’ Delhi remains one of the most luxurious residential areas in India, home to top politicians, diplomats, and prominent business families. Despite the high value of land in the area, redevelopment remains challenging due to strict regulations and the limited scope for new construction.

Prestige Group’s decision to exit the Lutyens’ Delhi project underscores the significant challenges developers face in executing luxury housing projects in central Delhi, despite the high demand and ticket sizes. The developer is now focusing on the NCR markets, which offer greater scale, certainty of execution, and fewer regulatory hurdles compared to the central locations.