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Investing in development

Investing in development corridors – Things to remember

Buying property in areas close to infrastructure development is always a smart move to with an eye to gaining higher value for property in the future. But investment in such areas also comes with its risks.

HappyKeys talks to industry experts to gain an insight about some of the aspects that buyers need to keep in mind when investing along development corridors.

“Buyers (NRI or otherwise) today do a high degree of due-diligence before investing in properties. However, they also need to keep in mind that local government projects in India are different from how the ones in mature markets,” says Anirudh Khanna, land overseer and evaluate for several developers in Ghaziabad. “And this has a key influence on the value and development of the projects in the vicinity, which in turn impacts investment opportunities.”

Some of the factors that one needs to keep in mind when investing in development corridors include:

“Delayed infrastructure is generally the norm in India, more so when it is mired in controversies,” says Virath Mani, a consultant with Swara Real Estate Financial Advisors. “When investing in these aspirational corridors, one needs to factor in delays that may act as impediments for quick escalation in property values.”

An irresolvable delay in infrastructure project can have a negative impact on the potential of the location in the short term.

“A prospective buyer must take a look at the procedures undertaken to acquire land even at the planning stage,” says Khanna. “This is one key issue that can either stall escalation in property prices.”

A JV with a reliable global party
“Several roads, flyovers and bridges today are being developed in collaboration with international private parties. The advantage that these have is that they do not get into agreements unless the papers and processes are not checked,” says Mani.

Greater transparency
“Several project directors today are emphasising on greater transparency. This with the development of commercial and social infrastructure in the vicinity generally is a sign of sub-market development which can have a positive impact along development corridors,” says Khanna. “Researching enough to identify such pockets can prove to be a smart move.”

“The improving macro-economic conditions and transparency in the proposed project and the scale of investments are expected to impact the real estate market in the coming years,” says Genesan.

Targeted markets
Experts recommend targetting locations that have been earmarked for the next phase of development. Though slightly riskier with regards to ownership, if this key aspect is addressed, one can hope to book good profits even before completion of the corridor projects.

smart-city-Ghaziabad

Ghaziabad – Impact of the Smart City tag

Property In Ghaziabad has been shortlisted for stage 2 of the Central government’s Smart City project. Urban Development Minister Venkaiah Naidu’s announcement in August-end could well increase the attraction of this fast-growing micro-market.

Till date, the area has primarily been attracting professionals working in Noida and Delhi as it is an affordable option compared to Noida. In the last one year, property market has been mostly stagnant. But will the smart city tag really kickstart the real estate market of Ghaziabad?

HappyKeys takes a look at several aspects that tend to influence the property market in the area.

Current scenario

Situated in the National Capital Region (NCR), Ghaziabad, on a major level, caters to the mid-segment buyers and offers comparatively affordable homes. It is well connected and has a thriving presence of social and lifestyle amenities.

Planned infrastructure development

With the ‘Smart City’ tag, the Ghaziabad Development Authority plans to come up with several initiatives. These include putting up informative LEDs running on solar energy, free Wi-Fi access to residents for a limited period and development of infrastructure and roads.
“As of today, Ghaziabad is already experiencing infrastructural development — from Metro connectivity to flyovers and roads,” says VK Goel, chief engineer, Ghaziabad Development Authority. “We have already executed the first phase of metro line from Anand Vihar to Vaishali. In phase II, we are taking the metro from Dilshad Garden to Ghaziabad New Bus Stand via Mohan Nagar. And in phase III, the metro line can be expected to connect from Sector 62, Noida, to Indirapuram CISF Road.

There is also a proposal to have the metro from Indirapuram CISF Road to Link Road and Vaishali to Mohan Nagar. The Detailed Project Reports are in the planning stage, according to the GDA office.

Social and lifestyle amenities

Ghaziabad scores high on this category. Situated on National Highway-24, Indirapuram is today exemplified by new-age shopping malls, skyscrapers and huge commercial complexes covering the entire township. Indirapuram also has good infrastructure facilities in terms of road, metro and rail network.

Current residential offerings

The locality has a wide-range of residential projects catering to the mid-luxury to the more affordable housing segment. Some established housing clusters such as Indirapuram, Vaishali and Kaushambi continue to be popular, while fast-growing areas such as Raj Nagar Extension and Crossings Republik have drawn in many first-time home buyers.

 

Raj Nagar Extension: The Right Time To Buy

 

The average price range in Indirapuram is broadly between Rs 4,500 to 6,500 per square feet while in Kaushambi, the rates are Rs 5,200-Rs 7,080 per square feet. Vaishali commands a price range of Rs 4,400-Rs 5,700 per square feet.

The prices in Crossings Republik are in the range of Rs 3,000-4,300 per square feet. In Nagar Extension, the property prices are between Rs 3,000-Rs 3,600 per square feet.

Summing up

Given the above scenario, what can one expect for the Ghaziabad property buyers?
Expert feel if all the above mentioned development plans are successfully implemented in close collaboration with the central government’s initiatives to start the process of converting Ghaziabad into a Smart City, then property value is definitely expected to be go up.

Even if some aspects of the proposed plan are completed, local players predict a positive a surge in the property market.

“This announcement (of inclusion in smart city project) will only help in pushing up the values in the next six months or so, by at least 10-15 per cent. Once the metro and other infrastructure development gets completed, property prices can grow even further,” says Ankur Budhiraja of AB Corporations, a real estate agency.