The national highways and expressways across India have been a point of growth and development over the past few decades. It is due to this that the government is planning on improving these roadside facilities and developing the real estate, as per a press release given by Jones Lang LaSalle (JLL) on June 28.
These plots of land are intended to be developed into commercial spaces, warehouses, and logistic parks, traveller facilities and way-side amenities for motorists along the highways. The way-side amenities that are to be developed will be along the lines of restaurants, food courts, retail outlets, electric vehicle (EV) charging ports and so on. This development initiative is a project set to appreciate the land value along the highways and expressways to a range of around 60 to 80 per cent.
A Shankar, a Strategic Consulting and Valuation Advisory, said in the press release that while the estimated land price for the selected sites was expected to appreciate in the micro-markets by 60 to 80 per cent, the price will further appreciate another 20 to 25 per cent when said sites become fully operational. The returns on these sites and projects will typically go up to 15 to 30 per cent, while the Capex investment per site ranging from Rs 1 crore to even Rs 10 crore, with an average of Rs 2 crore per hectare, said the report.
“We envisage that NHAI will give an impetus to modernisation of the Indian Highway network in coming years, ultimately culminating in various advantageous effects for highways users, market players, developers, investors, and facility operators,” said Shankar in the report.
The National Highway Authority of India (NHAI) has identified and selected more than 650 properties to date across 22 different states, that add up to an area of 3,000 hectares. This land will be developed over the next five years with participation from the private sector. The split of these lands is divided up as follows – 376 properties along new highways and expressways to come, 180 of them will be along existing highways and another 94 sites will be developed along the Delhi-Mumbai Expressway.
According to a statement by Shankar, the NHAI has appointed JLL as the liaison and international consultant responsible for the properties in both the North and South of India. “The engagement comprises of shortlisting of existing and new land parcels in a phased manner, identifying options for land monetization, detailed feasibility, and financial viability of each site. 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,” said Shankar.
These properties will not only appreciate themselves but the properties around them as well as more and more private players invest due to the vicinity of these locations to major cities and towns. This will drive up the employment rates of the local population. The target as of now is to develop 40 kilometres a year. The project reportedly also aims to bring much-needed stimulus to the fragmented logistics sector of India as well as develop its infrastructure as per the press release.