At a time when India is taking strong and undeterred steps towards enhanced air connectivity, can real estate growth be far behind? Studies and experts indicate that regional airports are sparking realty growth in several parts of the country. Here’s decoding the phenomenon.
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India needed a regional air connectivity boost like the UDAN (Ude Desh ka Aam Naagrik) blueprint launched in April, 2017 by Prime Minister Narendra Modi. This plan aimed at enhancing air connectivity throughout several parts of India, while making flights more affordable for all citizens. The concept was to build 100 new airports in the country and 70 of these would come up at new zones while the others would ease the burden of existing airports in major cities. The upcoming airports would also boost infrastructure and real estate development in Tier-2 and Tier-3 cities throughout India.
In spite of the coronavirus pandemic, the Indian real estate market has been steadily benefiting from the Government’s emphasis on new airport developments. Experts reckon that multi-modal ventures near regional airports offer a lifetime opportunity to realty players to ensure swift recovery. At the same time, these initiatives will ensure steady demand for the industry over a period of 5-10 years as per their expectations. The last-mile funding blueprints of the Government may also boost industry-wide enthusiasm for TOD (transit-oriented development) or transit-based realty ventures.
How Regional Airports are Boosting Real Estate Growth in India?
- The communication networks of any area automatically improve with a regional airport and this automatically boosts real estate possibilities in turn.
- A similar effect is anticipated for the Indian property market in various cities and transit locations. Air connectivity naturally gives the image of a city a major boost along with working as an enabler for its industry.
- Better connectivity also enhances tourism and income of the State/region, along with fostering economic growth, industries and ultimately housing demand.
- Land prices immediately go up once any new airport project is announced for a specific region. This is estimated at an initial jump of 20-30% by industry experts. This happens since airports usually come up on the outskirts of cities where land prices are on the lower side.
- Airport projects are total game-changers for real estate markets although it takes some time for the positive factors to manifest.
- The need for more airports is necessitated by reports stating how India has witnessed a six-fold jump in air passenger count over the last 10 years. CAPA (Centre for Asia Pacific Aviation) has reported that a whopping 265 million domestic passengers went through airports in the country in 2016 alone.
- India will transform into the third-biggest global aviation market by 2025 with 478 million travellers by 2036. This will naturally require investments of $45 billion in building airports and associated infrastructure as per the DGCA report.
- The sole drawback of airport projects on realty projects is the noise. Yet, these can be tackled with innovative soundproofing solutions offered by developers and architects at the planning stage. At the same time, another aspect is road and traffic noise along with congestion. On the other hand, staying near the airport is always beneficial for frequent air travellers.
- Commercial real estate benefits the most from any airport project, ultimately sparking housing demand in catchment areas not too far yet not in overwhelming proximity to the airport.
- Demand will go up considerably for commercial real estate after airports near completion and start functioning. Better connectivity will increase earnings from tourism, giving rise to commercial development and higher employment in the region.
Commercial real estate also gets a massive boost since airports will require cargo holds, service quarters, hotels and allied provisions. - Affordable housing gets a massive benefit from the development of regional airports although luxury housing projects witness a fall in pricing and demand in the area.
- This is because the higher crowds and noise levels deter luxury housing investors as per several experts.
- Many regional airports are also planned in several tourism hotspots.
- Airports will also spark development of better cargo handling and logistics infrastructure along with better surrounding roads, public transportation facilities like metro networks, bus networks and so on. They may also lead to the establishment of retail and business hubs in the vicinity.
Major Upcoming Airport Projects in India
1. Jewar Airport
The Jewar Airport or Noida International Airport will be the biggest game-changer for infrastructure growth in the NCR (National Capital Region). Coming up in New Delhi’s suburbs, it will help in considerably decongesting the airport in the Capital and will have the highest runways in the country as well. Covering 1,334 hectares, the airport is being built for a whopping Rs. 29,560 crore. The first phase may start operating from 2022-23 itself with six runways by the fourth phase. A rapid metro will also be built between the Indira Gandhi International Airport in New Delhi and the Noida International Airport.
2. Orvakal Airport
Located at Kurnool, Andhra Pradesh, this airport will be a game-changer for the entire tourism and industrial belt in Nandyal, Kurnool and Srisailam. The license is still pending for this airport that covers 639 acres and was completed in 2019.
3. Mopa Airport
Goa’s Dabolim Airport is already saturated and hence the Government is building the Mopa Greenfield airport in four phases. Phase 1 should be done in 2022-23 and will be able to handle 4.4 million people.
4. Sindhudurg Airport
Another marvel for Maharashtra, this lies roughly 27 km away from the Mumbai-Goa Highway in Sindhudurg. The airport launched in 2019 and lies near several tourist landmarks like the Sindhudurg Fort and Tarkali Beach. Flights have already started operating from here.
5. Rajkot Airport
This Greenfield airport is coming up near the 8B National Highway at Hirasar. It links Rajkot and Ahmedabad. This will initially have a single runway and will take five years for completion.
6. Navi Mumbai International Airport
The biggest feather in the cap for the entire Mumbai region, this airport is situated at Panvel. The Navi Mumbai International Airport will be the second one in the MMR (Mumbai Metropolitan Region) and will take the load of the current Mumbai Airport. It is expected to cater to a whopping 90 million people every year at full capacity. The project is slated for completion by the year 2023.
7. Rourkela Airport
The airport will further boost industrial and economic progress of the flourishing steel city. The airport has already started operations from 2019. Two more airports for Odisha are reportedly in the works at Utkela and Jeypore.
8. Sabarimala Airport
This airport is proposed for the Kottayam district and will cater to innumerable pilgrims visiting the Sabarimala Temple. It will be Kerala’s fifth airport and boost tourism, since the current nearest airport is a whopping 136 km away from the area, at Thiruvananthapuram.
9. Kannur International Airport
The airport opened in 2018 and caters to more than 1 million people every year at present. Authorities anticipate passenger traffic going up to five million people annually over the next few years.
These are only a few of the regional airport projects that should considerably boost real estate growth in India over the next few years.
