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AUGUST 2013 DELHI MASTER PLAN - 2021 INSIGHT INTO NEW DEVELOPMENT ZONES A Cushman & Wakefield Consulting Publication

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Page 1: Delhi Masterplan 2021

AUGUST 2013

DELHI MASTER PLAN - 2021INSIGHT INTO NEW DEVELOPMENT ZONES

A Cushman & Wakefield Consulting Publication

Page 2: Delhi Masterplan 2021

Contents

Foreword 1

Introduction 2

Key Provisions - MPD 2021 3

Historical Inference and Comparison 4

New Land Policy - Development Potential 5

Hindsight and Foresight - Satellite Cities 6

Other Key Policies - MPD 2021 7

Key Pointers 8

Land being Released - For Development 8

Land Use Break Up - New Zones 9

Latest Development - Amendments tothe Land Pooling Policy 10

Riders for Participation 11

Anticipated Challenges 11

End Note 12

Page 3: Delhi Masterplan 2021

DELHI MASTER

PLAN - 2021

1

FOREWORD

The objective behind presenting this white paper is to provide an

insight into the key provisions of the Master Plan Delhi (MPD) –

2021 and the potential / challenges that will need to be

considered by the various stakeholders involved in the real estate

domain.

Delhi Development Authority (DDA) has liberalized its land

acquisition policy, which will enable developer entity to directly

acquire land from farmers / landowners. By providing historical

inference and comparison, the impact of the new land policy on

urbanization and housing dynamics is presented. The paper also

discusses the intricacies involved across the various policy

changes brought about by the new master plan in comparison to

the older master plan documents.

A total of 66,000 Hectares (Ha) of land is to be unlocked through

MPD 2021 for development in Delhi. This is the largest share of

land unlocked for urbanization till now. Hence it presents a very

good opportunity for market constituents to participate in the

supply of property within Delhi. A substantial 4,357 million sq.ft.

of development across residential, commercial and public/semi-

public segments is estimated through private participation. There

is an opportunity to develop approximately 1.45 million new

dwelling units in Delhi over the next decade, apart from

commercial development. The possibility to achieve this by 2021

has been analyzed considering historical occurrences and

development pattern witnessed in the realty market.

The paper provides a perspective on the impact of this additional

supply in Delhi on the satellite cities surrounding Delhi. The

paper further presents a zone wise analysis of the land unlocked

for urbanization, the respite offered to various stakeholders and

the riders for private participation. The paper concludes with an

understanding of the anticipated challenges and implication of

market occurrences / master plan provisions to be considered by

market stakeholders.

Page 4: Delhi Masterplan 2021

INTRODUCTION

With an ever increasing population, Delhi has witnessed a rapid

growth in urbanization. The pressure on land and infrastructure

has lead to the land regulating agency – DDA to unlock land for

urbanization in a controlled manner through the various master

plans. Around 66,000 Ha of land has been earmarked as per

MPD-2021 for the purpose of urbanization. ~33% of this

unlocked land is planned under residential land use; ~ 26% is

planned under green belts; and another 3% is planned under

commercial land use.

The zones planned for development include J, L, KI, KII, N, PI and

PII. While Zone KII (Dwarka) has already been developed by

DDA and offers around 276 Ha of land (264 Ha of which is under

green belt land use), Zone P I (Narela) is presently under

development by the DDA. The rest of the zones are yet to

witness development. These zones can be expected to provide

potential source of business for Developers, Funds and Financial

Institutions, Contractors, Landlords (including Farmers) and

other market constituents. At the same time, development in

these zones would provide housing solution to individual buyers,

investors and occupiers.

The MPD – 2021 brings about a crucial change wherein

developer entity’s role has been considered in the process of

land acquisition and development in Delhi. This long over due

(commonly perceived) change, has been implemented by

including the policy of Public – Private Partnership within the

new land policy framework. More such key changes brought

about in MPD – 2021 have been discussed subsequently.

AUGUST 2013

2

A Cushman & Wakefield Consulting Publication

“Delhi will grow to almost twice its

existing size from 82,300 hectares to

148,300 hectares”

DELHI - URBAN EXPANSION

Source: Master Plan Delhi - 2021

PROPOSED 1981 URBAN AREA (487 SQKM)

PROPOSED 2001 URBAN EXTENSION (URBAN AREA: 200 SQKM)

PROPOSED 2021 URBANISABLE AREA

GREEN BELT + VILLAGES

Page 5: Delhi Masterplan 2021

3

DELHI MASTER

PLAN - 2021

KEY PROVISIONS - MPD 2021

KEY PROVISIONS – MPD 2021

Source: Master Plan Delhi - 2021

�Optimum utilization of available resources

�Both Public and Private land assembly,

development and housing (role of

developer entity)

�Policy to define the path for development

of the newly unlocked land

�Public participation through Decentralized Local

Area Planning (LAP)

�Plan implementation and monitoring through

Performance Oriented Planning and Development

�Marked as a low density zone

�Development options in the zone

include farmhouses and country

homes

�Incentivised redevelopment with

additional FAR

�Policy aimed at regularizing

unauthorized colonies

New Land

Policy

Local Area

Planning

Green Belt Re-development

Page 6: Delhi Masterplan 2021

PLANNING PROVISIONS - INSIGHT

Source: Master Plan - Delhi 1962, 2001 and 2021; Cushman & Wakefield Research

AUGUST 2013

4

A Cushman & Wakefield Consulting Publication

HISTORICAL INFERENCE AND COMPARISON

The planning of Delhi came into force in 1962 with the

notification of the first Master plan for Delhi. Since then, the

Master Plan – Delhi (MPD) has been updated and revised in 1981

and 2001. The following analysis provides brief insights on how

the planning policy of Delhi has changed towards being proactive

and participatory:

PARTICULARS MPD 1962 MPD 2001 MPD 2021

Total Area – Delhi (in Ha) 148,300 148,300 148,300

Urbanized Land (in Ha) 17,287 (1962) 48,777 (1981) 68,777 (2001)

Land unlocked for Urbanization (in Ha) 48,777 20,000 66,000

Estimated Urban Population (in million) 4.6 (1981) 13.8 (2001) 23.6 (2021)

Existing Dwelling Units (in million) 0.747 (1962) 1.15 (1981) 2.45 (2001)

Additional Dwelling Units (DU) planned - 1.62 (2001) 2.4* (2021)

for future (in million)

Farm House/Country Home Not allowed Allowed with Allowed with further

Development certain norms relaxed norms

Indicative Timelines for End User – – 5 – 7 years

Participation (considering present status)

DDA's role

Developer Entity's Role

�Housing and

Infrastructure Developer

�Land Leasing Agency

�Regulatory Authority

�Housing and

Infrastructure Developer

�Land Leasing Agency

�Regulatory Authority

�Physical Infrastructure

Developer

�Regulatory Authority

�Develop on land leased

by DDA

�Purchase commercial land

auctioned by DDA; and

�Develop on land leased by

DDA

�Allowed acquisition and

development of land

PLANNED DWELLING UNITS

EWS and LIG (15%)

MIG

HIG

EWS

LIG

Housing through

Developer Entity

Housing through

Regularization and

Redevelopment

0.95 million DU 1.45 million DU+ 2.4 million DU* Break-up of 2.4 million Dwelling Units

(DU) planned as per MPD 2021

60% of the dwelling units (1.45 million units) would be

provided through new zones being developed; the rest

40% (0.95 million units) would be met through

redevelopment and regularization in both existing and

new zones of Delhi1.25 million DU

0.20 million DU

Source: Master Plan - Delhi 2021; Cushman & Wakefield Research

Note: “ A land owner, or a group of land owners (who have grouped

together of their own volition/will for this purpose) or a developer” –

has been referred to as Developer Entity in the Master Plan – Delhi

(2021) provisions

�EWS - Economically Weaker Section

�LIG - Low Income Group; MIG - Middle Income Group;

HIG - High Income Group

Page 7: Delhi Masterplan 2021

Source: Master Plan Delhi 1962, 2001 and 2021; Cushman & Wakefield Research

NEW LAND POLICY - DEVELOPMENT POTENTIAL

URBANISATION

Delhi Development Authority through the master plan has been

periodically unlocking land in a controlled manner for

urbanization. The rapid urbanization witnessed, based on

economic prosperity and rapid influx of immigrant population in

the last two decades – has put pressure on land and support

infrastructure. The figures below indicate when and how much of

land has been unlocked by DDA for urbanization.

The last and the largest chunk of land being unlocked by DDA, is

part of its planned strategy to ensure controlled and sustainable

development, to meet the demands of estimated increase in

urban population by 2021.

5

DELHI MASTER

PLAN - 2021

HOUSING DYNAMICS

Out of the planned housing of 2.4 million dwelling units for the

estimated population of 23.6 million by 2021, 60% would be

constructed in new zones and the rest 40% would be met

through redevelopment in existing urban areas of Delhi. The onus

for development of the planned housing has been consciously

provided to developer entities, by DDA, as part of its policy

initiative.

LAND RELEASED FOR URBANISATION

Before MPD

1962 - 1981

MPD 1962 -

1981

MPD 1981 -

2001

MPD 2001 -

2021

Are

a (T

housa

nd H

a)

0

20

40

60

80

100

120

140

160 Total Area of Delhi: 148,300 Ha

33%

13%

44%

Best Opportunity to

participate in the fresh

supply within Delhi

Source: Master Plan Delhi 1962, 2001 and 2021; Cushman & Wakefield Research

SCALE OF DEVELOPMENT

1

1.5

2

2.5

3

0

-0.5

Dw

elli

ng

Units

(mill

ions)

1981 2001

Housing planned

till 2021

Housing planned

till 2001

Existing Units Planned Units

1.15

1.62

2.45 2.40

Page 8: Delhi Masterplan 2021

DWELLING UNIT - COMPARISON

Gurgaon Noida Delhi

0

1

2

3

4

5

Dw

elli

ng

Units

(mill

ions)

Existing Units Planned Units

AUGUST 2013

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A Cushman & Wakefield Consulting Publication

HINDSIGHT AND FORESIGHT - SATELLITE CITIES

The satellite cities of Gurgaon, Noida, Faridabad and Ghaziabad

have emerged due to the lack of land available within Delhi. These

satellite cities have now developed into self contained locations

with their respective Master Plans in place. To provide a

perspective to the reader on the quantum of development, the

two largest satellite cities of Gurgaon and Noida have been

compared with Delhi. More than 0.7 million dwelling units have

come up in Gurgaon (0.5 million) and Noida (0.287 million)

during the past 15 years to cater to the spillover from Delhi. In

comparison to the 2.4 million dwelling units being envisaged for

Delhi, another 0.562 million and 0.337 million dwelling units are

envisaged for Gurgaon and Noida as per their respective master

plans.

An inclusive or integrated approach rather than an isolated

approach between the Master Plan regulators of each city, within

the National Capital Region (NCR) is advocated, in order to

Source: Master Plan Delhi 2021; Master Plan Gurgaon 2031; Master Plan Noida 2031; Cushman & Wakefield Research

enable sustainable market dynamics for the overall real estate

development within the region.

0.50

0.56

0.29

0.34

2.45

2.40

Page 9: Delhi Masterplan 2021

7

DELHI MASTER

PLAN - 2021

OTHER KEY POLICIES - MPD 2021

LAND POOLING POLICY – NEW ZONES

The new land assembly and pooling model adopted by the MPD

2021 provides a path breaking solution – to DDA’s monopoly in

land acquisition in Delhi and certain instances of litigation

involved during land acquisition.

DDA’s role has been limited and private participation in terms of

land acquisition and development is being looked at optimistically.

LAND POOLING - PROVISIONS

Source: Master Plan Delhi 2021; Cushman & Wakefield Research

PARTICULARS 3 Ha - 20 Ha ABOVE 20 Ha

Land retained by DDA 60% 40%

Land returned to 40% 60%

Developer Entity

- Residential 40% 53%

- Commercial - 5%

- Public and Semi Public (P&SP) - 2%

FAR - Residential 400 400

FAR - Commercial - 250

FAR - P&SP - 250

While developer entities have been provided the complete

responsibility for developing residential and commercial land,

DDA has assumed responsibility of providing required

infrastructure as per summary provided in the table below:

DEVELOPMENT RESPONSIBILITY

Source: Master Plan Delhi 2021; Cushman & Wakefield Research

DDA DEVELOPER ENTITY TOTAL

Residential - 53% 53%

Commercial - 5% 5%

Public/ Semi-Public 8% 2% 10%

Industrial 4% - 4%

Recreational 16% - 16%

Road and Circulation 12% - 12%

Total 40% 60% 100%

GREEN BELT – NEW ZONES

Relaxation of norms would lead to increase in size of dwelling

unit.

The permissible BUA as per MPD 2001 was limited to 100 sq.

mt. for a plot area of 1Ha – 2 Ha and 150 sq. mt. for a plot area

of above 2 Ha. The permissible BUA has been increased and is

now solely based on FAR provisions.

Out of the total unlocked land of 66,000 Ha, ~ 27% comprises of

land under green belt. With a revised opportunity of Green Belt

in the offering, the areas demarcated as low density zones within

the green belt can be developed into country homes with

relaxed norms of FAR and ground coverage. The MPD 2021

redefines the development in green belt as low density

residential plot instead of farmhouses.

GREEN AREA - PROVISIONS

Source: Master Plan Delhi 2021; Cushman & Wakefield Research

Parameters 2001 2021

Minimum Plot Area 1 Ha 0.4 Ha

(2.5 acre) (1 acre)

Maximum FAR* 20 20

Maximum Height 6 mt 12 mt

Minimum Green Cover - 50%

Maximum Soft Parking and Roads - 20%

Ground Coverage 10% 30%

No of Dwelling Units - 1 per acre*

* 1 EWS unit of 60 sq.mt. is permitted additionally per main dwelling unit

* Farmhouse owners can enjoy FAR up to 30 by paying additional charges to the

relevant authority

• BUA - Built Up Area

• P&SP - Public & Semi-Public

• EWS - Economically Weaker Section

Note: Please refer latest development on amendments in the land pooling policy

captured in Page 10 of this white paper

Page 10: Delhi Masterplan 2021

AUGUST 2013

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A Cushman & Wakefield Consulting Publication

KEY POINTERS

�A key reason for the lack of fresh supply within Delhi, has

been widely accepted to be the large-scale acquisition policy

of DDA as per the earlier version of Master Plan (1962) –

which failed to keep pace with rapid urbanization of Delhi.

Accordingly the land pooling policy has been adopted to

target the huge gap for residential units (basis estimated

population growth trends).

�To be noted that the very reason for Satellite Cities of

Gurgaon, Noida, Ghaziabad and Faridabad – was lack of

supply in Delhi (which also led to increase in real estate

prices within Delhi). The answer to the question of whether

the new supply in Delhi will add to the realty pricing

conundrum in the NCR or be the great common divisor for

realty prices across NCR will be dependent upon multiple

factors and need to be analyzed further.

�While an FAR of 400 points has been provided for residential

development, a key element to note is that the FAR is to be

applied on net residential area. Net residential area has been

provided to be a maximum of 55% of gross residential area.

This effectively means an FAR of 220 points on the entire

residential area available for development. This derivation of

FAR is excluding 15% of BUA to be provided for EWS –

which effectively brings the average FAR to 253 points for

residential development.

�FAR – Floor Area Ratio

�BUA – Built Up Area

Note: Please refer latest development on amendments in the land pooling policy

captured in Page 10 of this white paper

LAND BEING RELEASED - FOR DEVELOPMENT

WHAT EACH ZONE OFFERS

MPD 2021 offers new development across zone J, KI, L, N and PII.

Zone KII has been fully developed by DDA with only 276 Ha of

land identified for further development including 264 Ha of green

belt. Zone PI has been phased for development by DDA with

Phase 1 almost complete.

Total Area (Ha) Urbanizable Area (Ha) Residential (Ha)

URBANIZED AREA UNLOCKED BY EACH ZONE (HA)

– AS PER MPD 2021

Source: Master Plan Delhi 2021; Cushman & Wakefield Research

0

5,000

10,000

15,000

20,000

25,000

J KI KII L N PI PII

ZONAL PLAN OF DELHI

Zone PIZone PII

Zone N

Zone L

Zone KI

Zone KII

Zone J

Urbanized Delhi

Page 11: Delhi Masterplan 2021

9

DELHI MASTER

PLAN - 2021

LAND USE BREAK UP - NEW ZONES

NEW ZONES - DEVELOPMENT POTENTIAL

Source: Master Plan Delhi 2021; Cushman & Wakefield Research

PARAMETERS J KI L N PII

674 160 800 957 505

101 24 120 144 76

111 88 156 130 84

44 35 62 52 34

Total Land (in acres) 20,422 16,092 28,679 23,885 15,487

Residential Land – Existing Settlement

(village and abadi areas) (in acres) 4,201 7,035 5,335 1,670 2,717

Residential Land – New Settlement (in acres) 7,029 1,672 8,346 9,986 5,273

FAR – Residential Development 400 400 400 400 400

Estimated Residential BUA (million sq.ft.)

Estimated EWS BUA (million sq.ft.)

Estimated Households (million) 0.45 0.261 0.435 0.526 0.413

Existing Agriculture Land Pricing (Quoted)

(INR million per acre) 20-30 30-40 30-60 20-30 40

Commercial Land (in acres) 1,021 805 1,434 1,194 774

FAR – Commercial Development 250 250 250 250 250

Commercial BUA (million sq.ft.)

Public and Semi Public Land (acres) 165 130 232 193 125

FAR – Public and Semi Public 250 250 250 250 250

Public and Semi Public BUA (million sq.ft.)

The zones together offer a total built up area potential of 3,561

million sq.ft. residential development; 569 million sq.ft. of

commercial development and 227 million sq.ft. of public/semi

public development for developer entities.

�FAR - Floor Area Ratio

�BUA - Built Up Area

�EWS - Economically Weaker Section

Note: Please refer latest development on amendments in the land pooling policy

captured in Page 10 of this white paper

Page 12: Delhi Masterplan 2021

AUGUST 2013

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A Cushman & Wakefield Consulting Publication

LATEST DEVELOPMENT –

AMENDMENTS TO THE LAND

POOLING POLICY

Basis updated information available in the public domain, the

Delhi Development Authority during its meeting chaired by the th

Delhi Lt. Governor during the week ending July 26 , 2013 has

approved the land pooling policy with certain amendments. The

amendments were effected consequent to objections &

suggestions received by the authority and recommendations of a

board of enquiry – after the policy was notified for objections &

suggestions during March, 2013. The policy has now been

forwarded to the Union Ministry of Urban Development for a

final notification.

Based on information available in the public domain, following are

the amendments effected:

• The land pooling area for the category of 3 Ha to 20 Ha has

been revised to 2 Ha to 20 Ha

• Ground Coverage has been increased from 33% to 40%

across categories

• Under the 2 Ha to 20 Ha category:

• The proportion of land retained by DDA has been

revised to 52% from the earlier 60% and the proportion

of land returned to Developer Entity has been revised to

48% from the earlier 40%

• The residential usage has been increased to 43% from the

earlier 40%

• The commercial usage has been increased to 3% from the

earlier 0%

• The public & semi public (P&SP) usage has been increased

to 2% from the earlier 0%

• Consequent to the above increase in proportion of land

being provided to Developer Entity and consequent increase

in respective land use of certain segments, the difference of

8% will need to be provided from the land being earlier

retained by DDA. However due to lack of information

available in the public domain, we are unable to comment on

how the difference has been adjusted between other land

uses. Considering that an official notification regarding the

amendments is not yet available in the public domain,

therefore the consequent changes to Built Up Area potential

have not been effected in the analysis undertaken as part of

this white paper.”

Page 13: Delhi Masterplan 2021

11

DELHI MASTER

PLAN - 2021

RIDERS FOR PRIVATE PARTICIPATION

�The developer entity has to assemble and surrender the land

to DDA for physical infrastructure development.

�The developer entity has to prepare detailed layout plans as

per master plan provisions.

�The developer entity has to demarcate all roads as per layout

plan and sector plan and get the same verified by concerned

authority within the assembled area and seek approval of

layout plans/detailed plans from DDA.

�The developer entity has to develop sector roads, internal

roads, infrastructure, services (including water supply lines,

power supply, rain water harvesting, STP, WTP, etc.) falling in

its share of land.

�The developer entity has to return prescribed built up space/

dwelling units for EWS/LIG housing component to the DDA

as per policy.

�The developer entity has to ensure timely completion of

development and its maintenance with the neighborhood

level facilities, i.e. open spaces, roads and services till the area

is handed over to the concerned Municipal Corporation for

maintenance. The deficiency charges (if any) shall be borne by

the developer entity at the time of handing over of services

to the corporation.

�The developer entity needs to construct EWS housing (15%

additional above the residential BUA), 50% of which would

have to be sold to DDA at a price of INR 2000 per sq.ft. and

the rest 50% would be retained with the developer entity for

regulated sale to community service personnel.

ANTICIPATED CHALLENGES

LAND POOLING

INCREASING COST

IMPLEMENTATION TIMELINES

Land Pooling has typically been a complex matter to deal with

based on past occurrences. MPD 2021 provides for Private

Participation, limiting the involvement of DDA in this role.

Therefore DDA will be completely dependent on developer

entity to acquire land and provide DDA with the 40% (in total)

land required for development of necessary infrastructure – in

order to ensure sustainable development. This means that an

adequate proportion of >20 Ha land parcels and >3 <20 Ha land

parcels should be applied with DDA for development – to

provide DDA with the required land area for infrastructure

development in the different Zones being released for

development. Else, a Catch 22 situation is foreseen, wherein

required infrastructure development is delayed and sustainable

development is impacted.

Land is expected to be pooled at present market rates. Clubbing

this factor with 40% / 60% of land being retained by DDA, the

proportionate land cost would be loaded on the rest of the

project – contributing to an increase in selling price of a dwelling

unit. In such a scenario, the model of Affordable Housing which

has been advocated and pursued by market stakeholders would

be impacted. The Joint Venture model between the Developer

Entity and the Farmers/Landowners will have an impact on land

cost.

�Citing historic inferences, it took DDA 10 years to bring out

MPD 1991 (due by 1981) and 7 years to bring out MPD 2021

(due by 2001 but published in 2007).

�The realty market has also witnessed typical delays ranging

from 1 to 3 years in delivery timelines of private development

within the NCR.

�The starting point for estimating future development

timelines would be based on the commitment by DDA of

time bound completion of spade work (relevant approvals for

MPD 2021; finalization of sector plans and its imposition on

village settlements; and development of physical infrastructure

in the region).

Note: Please refer latest development on amendments in the land pooling policy

captured in Page 10 of this white paper

Page 14: Delhi Masterplan 2021

AUGUST 2013

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A Cushman & Wakefield Consulting Publication

END NOTE

To conclude, the white paper brings the readers back to the point

that MPD 2021 provides scope for vast development within Delhi

through the new Land Policy involving Private Participation. The

MPD 2021 along with inviting private participation through

opportunity for large scale development in Delhi, lays down

norms to check unplanned growth and violations by developer

entities. Though the land pooling model proposed by MPD 2021

brings in a remarkable change in the way private participation is

perceived in the context of Delhi; it can be expected to impact

the cost of new housing units. It will be interesting to witness the

various parameters of land sharing, infrastructure provisions,

mandatory EWS and LIG housing provision and premium factor

for being located in Delhi – impacting the pricing of the MIG and

HIG housing segment. Market participants have been provided

with good opportunities. However, the implication of different

facets of regulatory and realty market characteristics /

occurrences captured in this white paper will need to be

analyzed further – to make an informed decision for benefiting

from each opportunity.

Source: Master Plan Delhi 2021; Cushman & Wakefield Research

�NCR – National Capital Region; MIG – Middle Income Group;

HIG – High Income Group;

Page 15: Delhi Masterplan 2021

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DELHI MASTER

PLAN - 2021

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Authors of the report:

Cushman & Wakefield Consulting

Kushalappa KP

Regional Manager - North & East India

[email protected]

Gaurav Bhatia

Senior Associate

[email protected]

Anuj Shandilya

Senior Associate

[email protected]

Tanmae Jha

Consultant

[email protected]

Disclaimer

This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.

©2013 Cushman & Wakefield.

All rights reserved.

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