Do real estate projects and infrastructure development go hand in hand? Yes, say realtors on the Yamuna Expressway.

Going by industry estimates, property prices around Noida and Greater Noida slumped by 25-30 per cent after the Uttar Pradesh Government cancelled the greenfield airport project at Jewar in Greater Noida.

The Yamuna Expressway is a fast-lane highway connecting Delhi and Agra via Noida and Greater Noida. Realtors had reportedly invested over Rs 7,000 crore in the zone, hoping to gain from the development there.

Over Rs 10,000 cr invested

Mr Shobhit Agarwal ,Managing Director, Protiviti Consulting Pvt Ltd, says, “The Yamuna Expressway's returns would be linked to a large part on the development of the airport at Jewar and the consequent traffic generated on this highway. Investment in the Yamuna Expressway is expected to be in excess of Rs 10,000 crore. Investments done by real estate developers along the Yamuna expressway will be hit.

“There are already reports of some of them not paying their commitments to the Yamuna Expressway development authority leading to cancellation of allotments. Also, projects being developed or proposed have a lot of consumer investments at an early stage — all these would likely be adversely affected.”

The Uttar Pradesh Chief Minister, Mr Akhilesh Yadav, had scrapped the Taj International Airport in Jewar that was hanging fire since the idea was first floated in 2001.

Mr Manoj Gaur, Managing Director, Gaursons India Ltd, says, “Cancellation of the proposed airport at Jewar will definitely have a huge impact on the market. Many five-star hotels were planned but now it is unlikely that they will come up. Airport at Jewar was much needed as it could have boosted not only the real estate but would have also brought the movement of MNCs to Noida and Greater Noida.”

Prop Equity's Mr Samir Jasuja says, “The announcement may negatively impact prices by 5-10 per cent for projects around and in Greater Noida and Yamuna Expressway. Several projects in this region are around 20 km away from Pari Chowk and availability of basic infrastructure is still a major challenge. Our research shows that prices in Greater Noida have already trickled down by around 3 per cent in the first quarter sequentially from Rs 2,564 (in the fourth quarter of 2011) a sq. feet to Rs 2,492.”

Official sources say that the Government was not keen on clearing the project in Greater Noida because it was too close to the Indira Gandhi International Airport in Delhi. The Aviation Ministry's norms stipulate that a second commercial airport cannot come up within a radius of 150 km from the Delhi airport. Land for the Jewar airport is located about 72 km from the Delhi airport.

Two views

Also, leading multinational companies, who had been eyeing development in and around Greater Noida, are now staying clear of investing in the area. Airbus, for instance, has put on hold its plans to set up a factory in Greater Noida.

Mr Sanjay Rastogi, Director, Saviour Builders Pvt. Ltd, says, “This is a big jolt for the job industry as well as the real estate sector. Infrastructure always plays a main role for the development of any particular area. Gurgaon is booming because of the airport and Jewar airport would have done the same to Noida and Greater Noida. Airports should come up keeping in mind the density and infrastructure and not the distance as is the case in India. Residential market will remain stable, but commercial market will be affected.”

However, not all realtors agree that the scrapping of the project is bad for the industry as a whole. Mr Neeraj Gulati, Managing Director, Assotech Realty, says, “We feel it is not going to affect at all. In any case, people had expectation that the delivery of such a task will take very long time. Moreover, Noida has a niche of good infrastructural development and being near to the capital enjoys preferential treatment from all segment of customers.”

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