30 Jun , 2021 By : Kanchan Joshi
As per a report published by JLL, the price of land in micro markets near the national highways may appreciate by 60-80% in the short term while in the long run, after the facilities become operational, they may go up by 20 to 25%.
In the short term, the price appreciation will be driven by the infrastructure development and connectivity created. Another spurt in price happens when the facilities/wayside amenities become operational along the highways.
The National Highway Authority of India (NHAI) has identified more than 650 properties across 22 states with a combined area of over 3,000 hectares to be developed with private sector participation in the next five years. It includes 94 sites on the Delhi Mumbai Expressway, 376 sites in under-construction new Highways/ Expressways, and close to 180 sites along an existing network of highways in India.
A Shankar, head, strategic consulting and valuation advisory, JLL said, “We envisage that NHAI will give an impetus to modernization of the Indian highway network in the coming years, ultimately culminating in various advantageous effects for highways users, market players, developers, investors, and facility operators. Further, we estimate land price appreciation in said micro-market sites by 60% to 80% in short term and 20% to 25% as the facilities become operational."
Capex investment per site ranges from Rs1 to Rs10 crore on an average or Rs2 crore per hectare of site area which all together translates into private investment to the tune of Rs4,800 crore in the next five years for this mission. The lessee returns for a typical site and project are estimated to be in the range of 15% to 30%. Clear land title, encumbrance free and pre-approved sites, with no change in land use required, in addition to attractive lease tenure option of up to 30 years with flexible project development options will open more doors of growth for developers and potential investors.
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