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

HT Estates - - HTESTATES - Van­dana Ram­nani

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

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