Yamuna Expressway: options aplenty,prices within reach
The stretch along the just-launched expressway has many projects in the affordable segment. With the area poised to be the next industrial hub buyers can expect good living and reasonable returns
The six-lane,165 kilometre long Yamuna Expressway,which was opened last week connects Greater Noida with Agra and passes through Aligarh and Mathura districts of Uttar Pradesh. For the last couple of years,the Yamuna Expressway has emerged as a booming real estate investment destination. This is due to some fundamental factors such as increasing industrialisation of Greater Noida and the presence of a large number of educational institutions there, proximity to the DMIC Delhi Mumbai Industrial Corridor etc. However,the hype was around proposed projects along the Expressway: i.e. the international airport,night safari,Formula 1,townships etc.
India had the first successful Formula 1 race last year. Developers were smart to cash-in on this event,and the plotted development along the expressway witnessed a price increase of almost 50-70 per cent. This increase in prices has been arrested in recent months,partly due to cancellation of the Taj International Aviation Hub at Jewar and also the concurrent emergence of investment corridors along the Dwarka Expressway,Manesar,Meerut,NH-24,Sonepat,Sohna,Bhiwadi and Daruhera.
The main idea of developing the aviation hub was to boost industrial development in the region,increase tourism,growth in hospitality sector,SEZ exports,agriculture exports etc. Many of the five star hotels,which were planned along the Yamuna Expressway are now unlikely to come-up any time soon. The airport would have given boost to business and would have helped to avoid double taxation in Delhi and Uttar Pradesh. Hopes,however,are alive. The new location for the airport is proposed between Agra and Mathura in the vicinity of the expressway.
After the Noida Extension agitation,land acquisition has become a big challenge along the Yamuna Expressway. Farmers are demanding toll-free movement on the expressway,increased compensation and a 10 per cent share in developed land instead of 7 per cent. There are wide-ranging speculations in the market that it will be very difficult for the authorities to acquire land.
The Yamuna Expressway Industrial Development Authority YEIDA has allotted 5,500 acres of land having 21,000 plots of different sizes. It remains to be seen as to when these plots are handed over. Real estate developers are now defaulting leading to the YEIDA cancelling allotments.
The Yamuna Expressway also has a lot of supply. Jaypee is the leading Real Estate developer who has been given rights to develop almost 6,175 acres of real estate along the expressway. It is developing five townships at different locations – Noida,Jaganpur,Mirzapur,Tappal amp; Kuber. Developers like Supertech and many others have their projects coming up.
A Special Development Zone SDZ was floated by YEIDA for allotment of plots of 1,000 hectares or more. It is estimated that approximately Rs 7,000 crore have been invested hoping to gain from the development along the expressway.
Among all this confusion,the question to be asked is,where is the the silver lining if there is one? Well,the ground situation is that the plots allotted by the YEIDA still quote at a premium of 50-200 per cent of the allotment price of Rs 4,750 per sq metre depending on the size and location.
There are,however,very few buyers who are willing to bet on these plots at these prices. Private developers quote between Rs 20,000 and Rs 35,000 per sq metre.
Knowledgeable brokers argue that it makes more sense to buy plots in the existing inhabited sectors in Greater Noida that are still available between Rs 25,000-35,000 per square metre. Most investors feel that the development along the Yamuna Expressway is a 10-year story and will,at best hedge inflation.
Any bonus over inflation would depend upon the pace at which YEIDA hands over the possession of the plots allotted. For those looking for a second home at affordable price,some of the private developers offer good facilities. The long-term future of Greater Noida is,however,promising and is poised to become a hub for investment in Uttar Pradesh.
In addition,due to a large number of commercial developments along the Noida-Greater Noida Expressway,many ‘value buyers’ will look for options along the Yamuna Expressway,much like the road between Bhiwadi and Gurgaon. The future is therefore not dark,nor too bright,but that promises a good living with reasonable returns. For the moment,distress buyers in this area need to be cautious,while investors with a long-term horizon should hold on and play the wait and watch game. Looking at current trends,prices do not seem like they will get out of reach any time soon.
The author is MD,Bajaj Capital. Sunil Agarwal,principal advisor,Bajaj Capital Realty also contributed to the story
Share
