Zurich Airport has emerged as the highest bidder to develop and build the second international airport of Delhi-NCR at Jewar in Uttar Pradesh with a bid of Rs 400.97 per passenger. The airport has been awarded for a concession period of 40 years.
Zurich Airport has surpassed the bids submitted by Adani group and GMR to win the construction award.
The expectation is that just like any mega infrastructure project, this greenfield airport will give a major boost to the overall economic activity around Noida and Greater Noida region. Let's take a closer look.
Once completed, Jewar International Airport will not only ease traffic at Delhi's IGI Airport but also create multiple job opportunities and give decent impetus to the property market in Noida, Greater Noida and Yamuna Expressway. 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.
For an area to become end-user-centric and liveable, a massive infrastructure project like Jewar International Airport can definitely make a huge difference. Such projects are invariably followed by more real estate developments including housing, commercial and hospitality.
Real benefits: Strictly long term
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.
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.
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.
Fast forward: Distant future trends
Once operational, the Jewar airport will definitely be a game-changer - not just for Noida and Greater Noida markets but also for the nearby hinterlands. Some of the major positive trends over the long term would include:
Healthy end-users demand: 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 lacklustre 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.
Greater Noida and Yamuna Expressway to be affordable options for first-time homebuyers: With increased connectivity and several infrastructure upgrades on the anvil, these two regions will see major realty developments in the times to come. The new airport will be a booster shot. These regions are more affordable than Gurgaon or Delhi, where prices sometimes skyrocket into peaks of unaffordability. First-time homebuyers are apt to focus on these areas -- unlike before when investors drove these markets. Commercial activity to gain momentum:
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.
Santhosh Kumar is vice-chairman of ANAROCK Property Consultants.