KMP should be completed for the Sonipat realty market to prosper
Sonipat-Kundli will also require the support of other forces such as manufacturing, IT, and infrastructure to get into high gear
The property market in Sonipat has not taken off with the initially anticipated speed due to delay in proposed infrastructure projects, especially the Kundli-Manesar-Palwal Expressway (KMP). The region also lacks critical mass in terms of population, and it has yet to emerge as a preferred office destination for IT/ITeS organisations, say real estate experts.
The initial euphoria and optimism about the Kundli-Sonipat region is waning. This can essentially be attributed to the extremely slow pace of progress on the many proposed infrastructure projects there. Due to the delay in the growth of the KMP Expressway, the property market in the region has not taken off with the initially anticipated speed. Overall, the region lacks critical mass in terms of population, and it has yet to emerge as a preferred office destination for IT/ITeS organisations. The occupancy level in the existing projects is just around 25% and could even be lower.
Apart from this, basic infrastructure like schools and hospitals are yet to make a convincing appearance in the region. The affordability tag - which used to be a prominent driver for investors who were discouraged by the much higher ticket sizes in other NCR areas - is gradually losing relevance. Prices have reached levels that place all good options beyond the financial appetite of the retail investor. That said, the price points at Kundli are still lower when compared to other NCR areas.
As far as education as a driver of property prices is concerned, realty experts are of the opinion that for the Sonipat-Kundli market to get into high gear it requires the support of other forces such as manufacturing, IT, and up-and-running infrastructure as seen in Greater Noida and Pune.
They point out that the education sector provides significant opportunities for developers to create an asset class in line with residential, commercial, retail and hospitality. However, it cannot be considered a sole driver for residential real estate. Most large education campus developments are centered along the peripheral locations of cities and provide hostel accommodation for both students and staff. Additionally, cities like Delhi and Pune, which have large student populations and have rental accommodation for them, lack volumes to drive residential real estate demand.
“Therefore, presence of employment hubs (manufacturing and service sector) along with a growth population are key drivers for residential real estate. A case in point is Hinjewadi in Pune where the Rajiv Gandhi Infotech Park spawned residential space along with a host of higher education institutes,” says Anshul Jain of DTZ India.
Jain points out that the development of an education- centric real estate development is spread across various stages. While the first phase is focused on creation of education institutes and its ancillary services (hostel, staff housing, etc), the sector provides potential to create additional revenue-generating opportunities like budget hotel, retail, entertainment and recreation facilities, etc. As a result, real estate development spans out to be a long- term proposition.
On an average, there has been 30% to 40% appreciation in apartment rates in Kundli since 2007-2008