Realty on fast track

Written by Timsy Jaipuria | Updated: Mar 23 2014, 10:34am hrs
AFTER BEING in cold storage for over two decades, the much-awaited Faridabad-Noida-Ghaziabad (FNG) Expressway project has finally been put on the fast track. Along with the residents of the three prominent satellite cities of the national capitalwho will delight at the prospect of getting better connectivity with the rest of the regionthe real estate market along the stretch is also expected to witness a lot of action. As per reports, the area has already seen price appreciation in property rates by as much as 20% since 2010, and the demand is only expected to rise further as the expressway project becomes a reality.

Realty players unanimously feel the corridor will make the region more accessible to the rest of the National Capital Region (NCR), leading to more demand for development. Brijesh Bhanote, director, sales and marketing, 3C Company, says, The work on the FNG Expressway has been speeding up in the last few months and it will increase the demand, leading to higher appreciation of timely investments. It is expected that the expressway will be functional in the next year, connecting the satellite towns of Delhi. As per reports, the area has seen price appreciation in property rates by 15-20% since 2010. Hence, it will be a good decision for developers, as well as property buyers, to invest in this area.

The idea for the expressway came into being in 1989 and work commenced in 1993. But multiple reasons, including vociferous protests from farmers, who were not willing to give up their

land for the project, delayed it by several years.

After over two decades, the project has finally been revived. The FNG Expressway is 43 km long and is set to cost R1,000 crore. Around 21 kms of the expressway fall under the purview of the Noida authority, which has completed work on 16 km so far. The rest of the expressway lies in Faridabad and Ghaziabad. The development of the FNG Expressway is great news in terms of traffic decongestion, along with real estate development, along the stretch. However, as with any infrastructure-related project, the benefits of the FNG Expressway will take time to reach the masses.

As per experts, the realty market along the stretch will be end-user-driven contrary to Noida and Gurgaon, which are investor-driven. Anil Kumar Sharma, president of the Confederation of Real Estate Developers Associations of India (CREDAI), NCR, and CMD, Amrapali Group, says, We see a lot of potential on this stretch, given the futuristic model being developed and the density of economic activities.

Not just for home buyers, the expressway is being considered the next hub for commercial real estate too. Developers believe that after Gurgaon, the areas around the expressway could be another option for MNCs to house their offices and other facilities.

With this corridor, the emerging realty hubsFaridabad and Ghaziabad, which are an integral part of the expresswaywill become a preferred destination for investment in residential, retail and commercial spaces. The areas around the expressway are bound to yield handsome returns to corporates and investors, adds RK Arora, CMD, Supertech.

The corridor is considered to be a hot destination for developers in the NCR market. Rohan Sharma, senior manager, research and real estate intelligence service, Jones Lang LaSalle (JLL) India, says: With positive movement on the road project, the areas around the stretch are likely to see price appreciation and many new launches as well. The FNG corridor is also likely to cause faster speculative project launch activity in the Faridabad and Ghaziabad regions. Apart from the improvement in connectivity between Noida and Ghaziabad, the linking road may cause further development along the stretch all the way up to Ghaziabad, thus making the future bright for the real estate market in the region.

Impact on nearby areas Road development is likely to benefit projects coming up in Crossings Republik, NH-24, Noida Extension and Raj Nagar Extension along NH-58. The total number of units across actively selling projects along the entire stretch are in excess of 1,70,000.

Both analysts and developers are quite vocal about the right time for end users to jump into the market. Buyers can invest along the stretch, including projects in Faridabad. Individually, the rates along the stretch are pretty high. But in comparison to other areas in and around the NCR, the rates here are still low, making the area attractive. A couple of years down the line, we expect the FNG stretch to attract huge traffic from motorists who put up in Noida and work in Gurgaon or Ghaziabad, and vice-versa, along with heavy vehicles that can avoid Delhi. If you get down to the basics, people avoid buying property in areas where connectivity is a problem. Since expressways provide smooth connectivity, the working class would like to make that area a preferred choice for residence. Looking at it from the point of view of infrastructure, we dont see any reason why people would not like to buy property along the stretch. says Navneet Gaur, director, Brys Group.

Similarly, Sam Chopra, chairman, RE/MAX India, adds that since the FNG Expressway starts from Chijarshi village on NH-24 and will pass through the main Noida sectors like 63, 121, 113, 120, 143 and hitting the Noida-Greater Noida Expressway in Sector 168, it will add further momentum to the area.

Roughly 45,000 to 50,000 units covering Noida, Faridabad and Gurgaon would benefit from the expressway, as it will drastically improve connectivity between Noida and Gurgaon, via Faridabad, completely bypassing Delhi traffic. Rates are definitely bound to see an upward trend for projects on the periphery of the expressway, adds Navin Raheja, president, National Real Estate Development Council (NAREDCO), and CMD, Raheja Developers.

The price factor realty experts opine that the major NCR cities are already reaching a saturation point as far as prices and supply of residential stock are concerned, and both buyers and developers are moving out to the periphery to new locations and to explore new possibilities. In such a scenario, connectivity between different areas in the region will be a major factor in the emergence of new residential destinations for mid-segment buyers.

As much as 10-12% of Delhis load is shared by Noida and Ghaziabad. After the completion of this road, within the next eight to nine months, the commute time from Delhi will be just about 30 minutes. This will make it a good option for those looking for a home closer to their workplaces, says Anil Mithas, CMD, Unnati Fortune Group, a Noida-based company dealing in real estate and infrastructure, among others.

Investments in the area will be a benefit for both consumers and developers. Since the land prices are cheap compared to other NCR points and Delhi, the quality of infrastructure is expected to be better and more modern.

As a developer, we can launch the project in the range of R3,000-4,000 per sq ft. Simply put, the cost of a flat will be in the range of R35-40 lakh, which is easy to sell and motivates people to invest in the area, says Rajesh Goyal, MD, RG Group, a Delhi-based real estate company.

As per industry estimates, approximately R13,500 crore have been invested in the residential sector and about R7,000-8,000 crore in the commercial sector along the FNG corridor.

Although the past one year has seen slow price movement in the range of 5-6%, in the next two years, about 15-17% appreciation in prices is expected. If the FNG Expressway gets operational, it might reach 20-22% as well, say industry insiders.

Many builders have land banks in sectors like 79 and 143, on both sides of the FNG Expressway. We expect around R8,000 crore of fresh investment to come in the next two years with the launch of around 10 new projects, says Vineet Singh, business head, 99acres.com.

Consumer response

The projects along the stretch have received a good response from buyers so far. Buyers generally tend to be cautious about investing their hard-earned money into any property, which is a reason why they tend to do it with due diligence. Their decision-making is based on factors such as connectivity with other regions, price of the property, its return on investment, commercial development and amenities around the area like hospitals, schools and proximity to the local market.

Sachin Sandhir, MD, RICS, south Asia, says: With the development of infrastructure in and around our cities, expressways and highways have become centres of real estate activity. Hence, all the important expressways like FNG are being developed as destinations of residential and commercial projects. For those looking to invest in a second property, this could be a good bet, as it will give them healthy returns on account of its location and surrounding infrastructure.

Kumar Bharat, managing director, BCC Infrastructures, who has been selling properties in the area, also says the company has received a positive response from its customers.

Now, with the Ghaziabad Development Authority coming up with new projects like Koel Enclave and the FNG corridor, the sentiment is only going to pick up from here.