The Rapid Infra Development Drive Comes As A Shot In The Arm For Satellite Townships

Consider these facts. India is expected to invest over Rs. 143 lakh crore in infrastructure by 2030 and most of is earmarked for urban clusters, driving significant activity in infrastructure-led urban development. The focus is on second airports, inter-city metro connectivity, aero-cities, highways (including quick transit freeways), high-speed rail corridors, IT + ITES zones and large datacenter concentration zones. Apparently, the rapid infrastructure development drive is fuelling the growth of satellite townships.

Describing infrastructure and mega projects as key enablers of urban expansion, a recent study by Colliers also suggest that India's urbanization is at a turning point, marked by a surge in rural-to-urban migration. This drives the expansion of existing urban nodes, towards areas along their peripheries. At least 40 per cent of the population is expected to reside in urban areas by 2030. This mandates quality urban infrastructure. For instance, trend magnified in and around the MMR region alone, with the planned decongestion of Mumbai and ancillary locations- with potential returns reaching 4X over the next decade.

This growth is driven by various infrastructure projects, including the Mumbai Trans-Harbor Link (MTHL), Navi Mumbai Airport Influence Notified Area (NAINA), Virar-Alibaug Multimodal Corridor, Mumbai-Pune Missing Link Project and JNPT extension. The upcoming Navi Mumbai International Airport will be India’s first airport with multi-modal transport connectivity. This new airport will have the capacity to serve nearly nine crore passengers annually and boost growth around the 90,000 acres of surrounding land via NAINA. This, in turn, would drive the growth of real estate in the region, with land prices appreciating nearly 3.9 x in the next five years from Rs. 4,200 to Rs. 16,200 per sq. ft. (2024-2030) in micro markets like Khopoli, Pen. This is backed by the expected sprouting of improved infrastructure, better connectivity, along with opportunities for new residential and commercial developments.

Jewar airport, expected to be completed by 2025, is the biggest catalyst for urbanization in Uttar Pradesh. Its strategic location along the newly built Yamuna Expressway, connecting the urban centers of Delhi, Noida and Agra serves as a distinct advantage. Government initiatives have provided impetus to the growth of Jewar as a township. These initiatives have resulted in land price appreciation by nearly 1.4X in the last five years. The Chennai Peripheral Ring Road (expected to be completed by 2025), which is a 132- km long highway, will drive the growth of satellite towns like Sriperumbudur and Singaperumalkoil, among others. This will help ease the congestion in and around the city.

These areas have witnessed a land price appreciation of nearly 1.5X in the last five years, from Rs. 2500 to Rs. 3800 per sq.ft. (2020-2024). There are more such examples across the country. From the investors’ point of view, this may be the right time to invest in a location that is expanding rapidly and experiencing high land price appreciation, driven by existing and upcoming infrastructure initiatives, and enjoy high returns and explore various rental yield options including second homes, holiday homes and so on.