Track2Realty Exclusive: The increasing shift of corporate focus towards Noida has been a matter of both research and speculation in the region. While the critics would like to point out that the shift of the Indian business community and the Multi National Companies (MNCs) have been more due to recent economic slowdown that made the scale of economy unviable in the high rental destinations like Gurgaon, the optimists within the built environment would prefer to look at the traction points of the city.
If Noida has been scaling up on the corporate wish list in the last few years it definitely cannot be just due to lesser capital values and rental yields, compared to established PBDs (Peripheral Business Districts) of the Delhi-NCR.
As a matter of fact, the very fact that the large developers with proven track record of commercial real estate, even in prime market of Gurgaon are today foraying into Noida’s commercial realty tells a different tale altogether. There are multiple demand drivers for the commercial real estate in the city with better infrastructure been icing on the cake. Of course, Noida remained a late mover in the segment due to the fact that the MNCs preferred Gurgaon due to an international airport in the vicinity; reasons why the developers also opted for more commercial projects over there.
The point is what has changed of late that makes the fortunes of commercial real estate change in the city. Analysts point out that while the better physical infrastructure of the city was always tempting, added to the emerging better social infrastructure, two factors have changed the outlook of Indian corporate sector towards the city.
Everyone seems to have realised that sooner than later an international airport that has for long been proposed at Dadri, close to Noida is going to be a reality. More importantly, the upcoming Delhi Mumbai Industrial Corridors (DMIC) promises to open the floodgates of new investment opportunities in the region and is expected to be that catalytic factor which promises to offer investors a gold mine once the project is over.
Referred as the most over ambitious infrastructure project in India and declared as one of 100 innovative global projects by consultancy firm KPMG, DMIC, a joint venture with Japan, the USD 90 billion infra project covering an overall length of 1483 KMs between the political capital and the business capital of India, i.e. Delhi and Mumbai, is poised to redefine the urban centres in the six States that it passes through— U.P, NCR of Delhi, Haryana, Rajasthan, Gujarat and Maharashtra. Starting from Jawaharlal Nehru Port near Mumbai the industrial corridor will have end terminal at Dadri, close to Noida.
Property developers and analysts in this part of the world believe in anticipation of DMIC Delhi-NCR in general and Noida in particular is fast emerging as the epicentre of increased financial activity and the multinationals now prefer to make their base over here. The Noida market will be more beneficial than other parts of the Delhi-NCR due to better connectivity, infrastructure and overall lack of space constraint. Since the growth of the real estate is directly linked to the overall economic development, the industrial corridor is poised to be the growth driver in the true sense of the term.
Moreover, what makes DMIC project unique is the fact that it will create a level playing field in terms of the growth corridors across the regions it has been running into. Of course, Noida is expected to gain more out of it, but it will lead to holistic growth of trade, economic activity and hence real estate in the region.
Geetambar Anand, CMD of ATS Group believes the DMIC is expected to help the industries in six states – including Uttar Pradesh, Rajasthan, Maharashtra, Gujarat, Haryana and Madhya Pradesh. He reminds Dadri-Noida-Ghaziabad has been chosen to be developed as an investment region covering an area of 200 sq km east of Yamuna Expressway Industrial Development Authority targeting a population of two million, the proposed corridor shall have deep positive impact in the region especially on the Noida-Ghaziabad- Greater Noida market by having Dadri as the terminal node.
Rattan Hawelia, Chairman of Hawelia Group maintains the growth of Noida market in general and its commercial property in particular should not be seen in isolation. According to him, DMIC will be a game changer for the very fact that it will not only give boost to the Small & Medium Enterprises (SMEs) but also connect the tier-II and III cities along the stretch to the major cities. This free flow of goods and services will create a level playing field and benefit cities like Noida which has for long been striving to attract the corporate spotlight.
“The 12 National Investment and Manufacturing Zones (NIMZs) along the DMIC will boost the manufacturing sector and increase its contribution in the Indian economy to 25 percent by 2022. This in turn will create jobs, bring about socio-economic parity among states and as a result boost demand for housing. DMIC coming close to Noida will definitely catalyze into transforming the real estate because creation of job will equally be aided by the economic development of the city which in turn will see the demand for more housing and quality office and retail space,” says Hawelia.
Abhay Kumar, CMD of Grih Pravesh Buildteck believes since the Noida market offers land at a comparatively cheaper rate, developers will have an incentive to build affordable housing. According to him, the government needs to simultaneously speed up approval process and facilitate the sector. On the back of growing habitation and increased residential space, the development and demand for commercial space is inevitable. Also, growing income level and increased disposable income will see more demand for commercial space.
“The doubt according to me is not about the potential and possibilities of the Noida market once the DMIC is completed, but I also have a caveat here. What is all the more challenging is the supply side of real estate, failing this Noida market will see very high appreciation and hence lose its competitive edge vis-à-vis neighbouring markets like Gurgaon. Till now it seems to be going in a time bound manner and in fact the state governments are actually vying with each other to be first off the block. An example of the positive spinoff of DMIC is commercial property in Noida which has suddenly high on the wish list of the corporate sector,” says Abhay.
R K Arora, CMD of Supertech maintains that the corridor will fuel never-before infrastructural growth in the region. According to him, with the commencement of DMIC, the Noida market will see a huge demand in both residential as well as commercial space. Since, Dadri-Noida-Ghaziabad has been chosen to be developed as an investment region and is expected to cover an area of 200 sq km with targeted population of two million.
“The DMIC project is expected to create close to 12 million jobs in the six states and it will attract numerous MNCs across the globe giving developers an opportunity to build realty space for customers. DMIC will be an essential component of India’s future economic development. We expect that DMIC will be developing as the global manufacturing and trading Hub in partnership with private organization,” says Arora.
There is a general feeling within the built environment of Noida real estate that DMIC will open the floodgates of economic opportunities, if things as proposed and projected are executed accordingly. Since the development of new cities and residential township will lead to an urgent need for commercial and trading activity, Noida is poised to attract a sizeable investment. It will have a chain effect on the economy of the region and there would be intense requirement for quality commercial spaces for both offices and shopping complexes to support it. The growth of the residential market is hence a foregone conclusion and collective the city will grow holistically.
