DELHI: The 250-km stretch between Delhi and Jaipur has become a hotbed for real estate development, with areas like Manesar, Dharuhera, Bhiwadi, Neemrana, Kotputli and Alwar becoming the new catch words for investors.
Highways connecting various towns and cities serve a dual purpose. Not only do they provide good connectivity and accessibility, they also serve as nodes which spur development. Typically, the portions of highways which abut cities, lying on these routes, witness hectic development activity right from the time the projects are first announced. This activity gathers momentum as the highway nears completion. The NH-8 connecting Delhi to Jaipur has seen a similar growth trajectory.
Gurgaon, closer to Delhi and part of NCR, has seen spiraling growth in the real estate. With existing road infrastructure in the form of NH-8 and the Gurgaon city exhausting its land resources near the main city, the boundaries of the city have been pushed further towards NH-8. The residential real estate sector has seen tremendous growth along this route. Some residential projects are underway even on the upcoming Dwarka-Gurgaon Expressway which runs nearly parallel to the NH-8 and meets it near Sector 82.
Prominent township projects are coming up on NH-8 beyond the second toll plaza. The major developers active here include Vatika, DLF and Orris Infrastructure. Other major developers on this stretch are Godrej, Emaar MGF, 3Cs, Ansal API and Spaze, among others.
Manesar, Dharuhera and Bhiwadi are satellite cities of Gurgaon and have a thriving industrial sector. Manesar is also witnessing commercial development and residential projects by ABW, DLF, SARE and Sidharatha, which have seen good demand on account of their affordability. Dharuhera has developers like Parsvnath, Vipul, Bestech, Vardhman, M2K, Ferrous Infrastructure and Dwarkadhis, among others.
Bhiwadi is seeing residential development by the likes of Omaxe, Ashiana Group, BDI, Star Raison Landmark, MVL, Cosmos Infra, Avalon, Krish infrastructure and Piyush Group among others.
Neemrana has attracted heavy industrial investment from Japanese manufacturing firms. Currently, a 1,200-acre Japanese Zone is 70 per cent operational, with heavy investment in manufacturing facilities by firms such as Daikin, Mitsui Chemicals, Nissan, Nippon and NYK Logistics. The Japan External Trade Organization and the Export Promotion Industrial Park, spread over 3,500 acre, developed by the Rajasthan State Industrial Development and Investment Corporation (RIICO) in several phases, are other industrial zones that have led to this sub-market’s emergence as a major industrial hub. Some residential projects by Ashiana, Eldeco and Anant Raj have already been launched. This sub-market has potential for integrated township projects and low-cost, affordable housing.
Kotputli in Rajasthan has development by Eklavya Housing and is largely defined by plotted development projects by a host of small, individual developers. There are a number of developments on the outskirts of Alwar, especially on the Bhiwadi-Alwar Bypass and outskirts of the city. Ansals are undertaking a residential project, while other projects are by small, individual developers.
Physical infrastructure comprising of roads, power, sewage, sanitation and water supply while social infrastructure refers to schools, colleges, malls, entertainment avenues among others. Currently, Gurgaon itself suffers from inadequate infrastructure in respect of proper roads, regular power and water supply and city sewage disposal mechanism. In the light of this, other cities need to make infrastructure development a priority and ensure that capacity building takes place in a proactive and progressive manner, keeping in mind the expected demand over the next 10-15 years. However, since all infrastructure projects have long gestation and operation periods, a time period of 10-15 years can be easily taken as reference.
Gurgaon has shown the most progress in providing livable amenities to its residents. Though the internal road infrastructure is developing fairly rapidly in Gurgaon and Manesar, other towns are yet to catch up. Most locations closer to these cities’ centres will have provisions of basic amenities. However, since a large portion of development is still underway, amenities are yet to become fully functional. Towns like Bhiwadi and Neemrana are likely to see faster growth. In the former case, residential projects are progressing at a rapid pace while in the latter, a promise of all-round industrial and residential led development and a notified Master Plan will enhance the infrastructure progress at a rapid pace.
Prices are a function of demand and supply, and currently are at an all-time high in Gurgaon. With infrastructure development lagging behind in the emerging residential corridors, prices are operating on speculation of future appreciation and investor sentiment. Manesar, by virtue of its locational advantages, has also seen healthy appreciation in residential projects located there.
Manesar, also a well-established industrial town, is a nascent office destination and is considered a part of Gurgaon. This has led to significant price increments in housing projects located here. Dharuhera and Bhiwadi largely cater to affordable housing in terms of amenities and pricing. Prices in these areas have remained largely stable, showing only range-bound growth in projects which are nearing completion. Neemrana has shown appreciable increment in land values and apartment prices since the Master Plan-2031 was notified. Its inherent location and thrust on manufacturing and industries is likely to make this a preferred investment destination going forward.
Alwar and Kotputli have residential prices which are at nearly one-third of the prevailing prices in the Gurgaon residential market in upcoming corridors adjacent to NH-8.
Land values differ based on the expected pricing for residential projects and the projected demand in each location. In Gurgaon, the land values are Rs 2,500-3,000 per sq ft in locations on NH-8 which are closer to the second toll plaza. Manesar has land values in the range of Rs 2,200-2,400 per sq ft. Dharuhera’s land pricing is Rs 1100-1400 per sq ft while Bhiwadi is Rs 800-1000 per sq ft. Neemrana’s land prices are in the range of Rs 800-900 per sq ft, while land value range in Kotputli is Rs 350-500 per sq ft, while Alwar’s land values between Rs 500-600 per sq ft.
Land values are currently at a premium in Gurgaon, and hence are adding to the project costs of developers. This in turn is leading developers to price their projects higher to service their debt as well as earn some profit margin. Similarly, with land prices rising across all towns on the NH-8 corridor, project costs are rising. This impacts the profit margin of developers, or impacts sales if project pricing is higher than what could be considered competitive.
There is opportunity in the affordable and mid-income housing segments for developers in these areas, as majority of the demand is directed towards these segments. Healthy demand for the right kind of project with the correct price point can be expected. Towns like Dharuhera, Bhiwadi and Alwar can expect to see local demand as the first two are major industrial centres and will see some part of the DMIC development, adding to the infrastructure in these towns.
Neemrana is likely to emerge as a major corridor, driving both industrial and manufacturing growth. Residential development will be an offshoot of the increasing housing requirements for the working population and the expatriates likely to be employed here. Its strategic location, strong industrial linkages and prospects of employment generation have led to it becoming a real estate investment hotspot.
The government of Rajasthan has already notified the 2031 Master Plan for the Shahjahanpur-Neemrana-Behror Urban Complex. A Korean Dedicated Manufacturing Zone has already been proposed to be set up through an agreement between RIICO and the Korean firms’ nodal body, Kotra. With industrial growth acting as a pull, real estate development across office, retail and residential asset classes is likely to find greater traction.
Manesar too, is expected to be a major node on the DMIC project, with a host of multi-product hubs and industry incentives driving industrial development. This will catalyze demand for residential projects. If land prices can be controlled by the state authorities unlocking more land parcels, the business opportunity in residential development on the NH-8 corridor will see an impetus, with more projects being launched and generating demand. The norms for ECB for affordable housing are likely to be helpful in lowering financing costs, bringing greater thrust to residential projects in these locations.
The Master plan for DMIC corridor’s first zone has been notified. Khushkhera-Bhiwadi-Neemrana is being developed as the first node for which land acquisition is almost complete. The Manesar-Bawal region is also one of the investment regions selected for development in the first phase of this industrial corridor. The creation of these investment regions is likely to spur residential investment in these corridors at a greater scale.