The government’s focus on providing world-class infrastructure in its highway networks is going to lead to a short-term squeeze of prices by anywhere between 60 and 80 percent. The short-term rise in prices will be on the back of increased connectivity and improvements in infrastructure. The report by JLL also predicts that the price of land around micro markets will further increase by nearly a quarter after wayside amenities open up.
The National Highway Authority of India (NHAI) is all set to take advantage of these market dynamics and has already identified several locations to be developed. The NHAI has selected 650 properties in 22 states across India, with a consolidated area of over 3,000 hectares that will be developed with private sector participation in the next five years. Of these, 94 sites are located on the Delhi Mumbai Expressway, nearly 180 sites are along existing highways and 376 sites will be located on new or under-construction highways.
JLL’s Head, Strategic Consulting and Valuation Advisory, A. Shankar said, “We envisage that NHAI will give an impetus to modernisation 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 a land price appreciation in said sites’ micro markets by 60-80 percent in the short term and 20-25 percent as the facilities become operational.”
A total of Rs 4,800 crore will be invested by private investors in the projects over the next five years, with capex investment ranging between Rs 1 crore and 10 crore per site or an average of Rs 2 crore per hectare of site area. “Out of the 650 identified sites, bids are already invited for 138 sites and had received enthusiastic participation from market players. The majority of the said 138 site tenders are still active to receive bids as of 30 June 2021,” Shankar added.
News Source : Construction World
