Wednesday, 17 June 2015

Top reasons why NCR expansion is good for realty

To address the infrastructural and environmental challenges, Urban Development Minister, M Venkaiah Naidu announced inclusion of three new districts namely Jind and Karnal districts of Haryana and Muzaffarnagar district of Uttar Pradesh to the National Capital Region (NCR). The next question that arises is whether these new inclusions bring any real estate development in the areas.

Though development in these areas are expected to take place at a later stage, let’s list some expected changes.

Sanjay Dutt, executive managing director, South Asia, Cushman & Wakefield says, “The primary reason for inclusion of new districts within National Capital Region (NCR) is to promote balanced development. Distribution of economic activities will ease the pressure on over-burdened infrastructure in Delhi. This will also make available additional land for development and the ever increasing housing needs.”

What are the benefits that come along with the inclusion of districts within Delhi-NCR?

Better planning of the areas in line with the Regional plan made by National Capital Region Planning Board (NCRPB)

Development of infrastructure due to inclusion in infrastructure projects envisioned by the NCRPB for the entire National Capital Region (NCR)

Improved connectivity with Delhi via Rapid Rail Transit System (RRTS) and roads

Increased investment activity in the region due to improved visibility as part of the NCR

Promotion of industrial activity

Pick-up in real estate activity

Better health facilities

Mere inclusion in Delhi-NCR is not enough. “As land is a state subject, respective states must ensure timely preparation of development plans (in line with the regional plan for NCR) along with steady implementation of infrastructure projects,” adds Dutt.

Current status of new districts

Jind is a city in Jind district in the Indian state of Haryana and is well connected via road with NH-71 and several state highways passing through the town. The area is also well connected via railways running frequently on the Delhi-Ferozepur line. Major economic activity of Jind is primarily agro based with the presence of large grain market; cattle feed plant and milk plant. At present there are only few local real estate developers in the area therefore, the real estate sector in Jind is yet to mature.

Karnal with its proximity to Delhi has developed rapidly in the last decade. It has excellent connectivity to both Delhi and Chandigarh via National Highway-1 and the Chandigarh Expressway. The area is already a part of the proposed Delhi-Sonipat-Karnal Regional Rapid Transit System project. Karnal has developed social infrastructure and has presence of mall, multiplex and numerous educational and research institutions. Several renowned developers have their projects in the town.

Muzaffarnagar is located in sugar-belt region of Western Uttar Pradesh and is well connected both by road and rail and to Delhi via NH-58. The real estate sector in the city is marked by the presence of several reputed developers.

Will new inclusion turn out to be a real estate boom?

Inclusion in NCR is a big positive for these new towns. Property prices will appreciate primarily due to improvement in buyer sentiment. As infrastructure improves, capital values of real estate will strengthen. Availability of land at cheaper rates (compared to the existing NCR) could facilitate creation of affordable housing in these new towns.

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