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Industrial corridors will give a boost to not only infrastructure development but also real estate in smaller centres along the way

Add comment   |   September 7, 2014    08:34pm   |Contributed by Indian Realty News

If anyone would like to see how there is a strong co-relation between infrastructure development, real estate opportunities and revival of the economy, there can be no better example than the industrial corridors which in the global context have a proven track record of igniting the economic activity. In the Indian context, it has all the more relevance since these corridors promise to take development beyond the metro cities by connecting through tier-II and III cities. The shift of focus from in and around the CBDs (Central Business Districts) and providing a level playing field to the SMEs (Small & Medium Enterprises) through seamless connectivity and transportation is what makes the prospects of industrial corridors very attractive.

There are four prominent industrial corridors that promise to change India’s urban landscape, bring economic opportunities and prosperity and take commercial developments to a new level. First, and the most talked about is the Delhi-Mumbai Industrial Corridor (DMIC), second is Chennai-Bengaluru Industrial Corridor (CBIC), third is Bengaluru-Mumbai Economic Corridor (BMEC) and the fourth important growth corridor is Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC). In addition to these four key corridors, the proposed East Coast Economic Corridor, linking Kolkata to Chennai, is also being eagerly awaited by the real estate developers to open more floodgates of economic opportunities.

The industrial corridors promise to attract more FDI, bring world class technology, improve economies of scale, ensure better connectivity, lead to low logistics cost and low inventory, manage supply chain integration, give cost advantage, attract skilled manpower with optimum cost, enhance export competitiveness and are meant to provide two important inputs for competitiveness: lower distribution costs and high-quality real estate.

From the standpoint of North India, facts speak for themselves. The competitive advantage of DMIC suggests 45 per cent of country’s registered factories (129,704), catering to an employment of 3.36 million jobs, are located in DMIC states. About 1.234 million registered small scale industries, constituting 46 per cent of overall country, are located in DMIC states. In terms of Gross Industrial Output and export trends, DMIC states together constitute 56 per cent of country’s industrial output (Rs 12,874 billion) and 62 per cent of country’s total exports (Rs 4564 billion).

Similarly, the Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC) that connects Ludhiana (Punjab) to Dankuni (West Bengal) covering Punjab, Haryana, Delhi, Uttar Pradesh, Uttarakhand, Bihar, Jharkhand and West Bengal promises to create world class infrastructure. In a band of 150-200 km on either side of EDFC, in the first phase every state to promote at least one cluster of about 10 km area to be called Integrated Manufacturing Cluster (IMC), in which 40 per cent area would be earmarked permanently for manufacturing and processing activities. It will also leverage the Inland Waterway System being developed along National Waterway 1.

What about the real estate opportunities? Sanjey Roy, DLF Spokesperson addresses a wider concern to say the industrial corridors will not only lead to even growth along the connecting cities, these will also create new real estate opportunities and lead to economic turnaround of these cities. He believes the industrial corridors will help build the smart cities along the way at par with international cities. It will develop infrastructure in many connecting cities of the major city as the development of such a corridor will require townships and commercial establishments to be built along the corridor. Thus, there will be an increased trading activity between these cities, and this will help generate demand for commercial and residential real estate projects in the corridor.

“Of course, the industrial corridors will ignite the already proposed smart cities as the extension of the main city that connects with these corridors. The way manufacturing hubs has been planned with these industrial corridors I have absolutely no doubt that there will be a new lease of life to the real estate segment across the connecting cities and the adjoining tier II and III cities as well. This will have the chain effect on the economy of the region as well. Already we have seen such a model working so very well in Gurgaon,” says Roy.

Rahul Gaur, CMD of Brys Group says he is more concerned about the DMIC as it will set the tone for other proposed corridors. According to him, the DMIC also assumes more significance because it is connecting to two major business centres of Delhi and Mumbai. Besides reviving the real estate sector in these cities, industrial corridors will also provide a boost to the overall economy of all the connecting cities.

“Across the value chain opportunities lie for power, transportation, equipment, internal infrastructure and ICT. Of course, real estate opportunities are ingrained in the project itself. I have always believed that the idea should be to ignite the economic activity which will take care of the demand side of market restraint. And it is here that industrial corridors are promising to be the game changer,” says Gaur.

Rattan Hawelia, Chairman of Hawelia Group makes it a point that real estate opportunities should not be seen in isolation but the focus should be to make sure that investment flows to the market, which is on the cards along the stretch of industrial corridors. According to him, the development of these cities will tend to have a chain effect to the natural growth of the city and the real estate will be the beneficiary.

“We are all aware of the lost ground in our urbanisation and the opportunities that lie with the proposed industrial corridors. I feel it will not only provide a boost to real estate but it will also take other areas of real estate like residential, retail and hospitality into a fast forward mode. Experience across the world suggests that such large scale developments always affect the demand for property. These corridors have the potential to transform the market dynamics,” says Hawelia. Industrial corridors are hence anticipated to be a milestone in India’s tryst with inevitable urbanisation. There is no denying that its success will address many of the real estate and infrastructure concerns that make India’s urban management very complex. Development of many smart cities along the stretch of these industrial corridors is hence a foregone conclusion.

Source: TNN

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