The Zurich Airport International AG, on November 29, was selected as the concessionaire for developing the greenfield Jewar airport in the NCR region.
Jewar Airport or the Noida International Greenfield Airport, will come up in 5,000 hectare area when fully constructed and is estimated to cost Rs 29,560 crore. On completion, the airport is expected to be the largest in India.
Experts say that once operational, the airport will be a game-changer – not just for Noida and Greater Noida markets, but also in areas such as Greater Noida and across the Yamuna Expressway, which are areas that have seen lacklustre demand.
However, the impact would not be immediate but be visible only after eight to 10 years, they caution
The Switzerland-headquartered company made the highest per passenger bid for the airport, outbidding competitors like Delhi International Airport Limited, Adani Enterprises, and Anchorage Infrastructure Investments Holdings Limited, reports said.
It should be remembered that both Greater Noida and Yamuna Expressway have seen a lot of speculative activity in the past few years. While these areas always looked promising for end-users, liveability was a challenge. As a result, several housing projects along the Expressway remained unoccupied and were largely ghost towns. The residential stock that came up in these areas was mostly inhabited by students who attended universities in the vicinity.
With the new airport coming in, this market will attract more end-users and see steady, genuine capital appreciation rather than mere speculation, real estate experts said.
Despite being more affordable than Gurgaon and Delhi, Greater Noida and the areas along Yamuna Expressway did not become end-user driven markets due to unimpressive infrastructure.
The new airport will boost the region’s overall infrastructure and make it more liveable and active. As a result, more and more end-users will drive the property market in this region, said Santhosh Kumar, vice chairman – ANAROCK Property Consultants.
It would create multiple job opportunities and give decent impetus to the property market in the Noida, Greater Noida and Yamuna Expressway areas. These markets have been reeling under tremendous pressure over the last three to four years, and require a fresh injection of opportunity and intent to overcome this slump, he said.
Commercial activity to pick up
“The new airport will not only increase housing demand but also lead to an uptick in commercial developments like office spaces and retail. In fact, office spaces which will eventually and inevitably proliferate along the region as rentals will be relatively cheaper than in Gurgaon and Delhi, without compromising on the purchasing power of the consumers they cater to”, said Kumar.
Logistics would come up in the nearby areas followed by ancillary activities related to the airport. Warehousing and residential sectors are expected to get a shot in the arm first followed by the commercial sector, but all this will take over five years, said Mudassir Zaidi, executive director – North, Knight Frank India.
To cite an example, Gurgaon, especially its commercial and residential markets, benefited more than Delhi from the existing airport, despite Noida having better infrastructure, he adds.
Will there be long term price appreciation?
The airport would definitely be a game changer for the real estate market in the region but experts warn that prices would not increase immediately. “The airport is not coming up tomorrow,” cautions Zaidi.
Greater Noida itself has more than 40 percent units in the entire NCR. While construction of the airport will help revive the market in this region, prices will not shoot up overnight. If at all, they will only go up by 2 to 4 percent, but gradually, he said.
According to Anarock Research, the average price of units in Noida is Rs 4,780 per sq ft. In Greater Noida it is Rs 3,320 per sq ft and on the Yamuna Expressway, it is in the range of Rs 3,350 per sq ft.
All this sounds rosy enough, but investors, buyers and developers would be well-advised not to jump the bandwagon immediately. While a second international airport in NCR will certainly have a major impact on the real estate market in and around the region and the state of UP, the ‘real’ impact will become visible only in around 8-10 years.
“Until there are visible signs of construction activity on Jewar International Airport, the potential of other real estate developments such as residential, commercial or retail will remain on hold. To be sure, developers who had hoped to cash in on this mega project when it was announced several years ago bought large land parcels in the vicinity,”said Kumar.
“However, they will refrain from launching residential or commercial projects in the immediate future, as the nearby areas including Noida, Greater Noida and Yamuna Expressway still have more than enough existing inventory,” he said.
There is ample unsold or unfinished stock in these markets. Developers will not risk launching new residential projects until the previous stock is cleared or completed. Also, major land bank holders in and around the new airport – one of which is estimated to hold over 2,000-3,000 acres – are yet to find relief in the form of adequate funding.