-J Padmapriya & Chaitali Chakravarty
SEEN that wasteland
running along railway tracks? It is being shaped up as a profit centre now.
Road, railway, highways, expressways and mass rapid transport system are busy
converting idle chunks of property around them into performing assets. This is
seen as a creative way of getting that incremental revenue which would
otherwise
be a jot difficult to raise from traditional operations.
The objective of
blending fundamentally viable core sector projects with real estate development
is two-fold: One, the projects will not solely depend on toll or fares to keep
them going. Two, real estate development by way of setting up malls, retail
outlets and multiplexes would also pull traffic along these corridors.
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Ventures chairman Vinayak Chatterjee says the catch is that the primary project
should be fundamentally sound. "Railways and highways can add to their
returns by using their idle land assets creatively. But, for projects which are
fundamentally unviable, real estate development alone cannot see them
generating returns," he says.
B Richard Ellis
however says that property development is crucial for funding infrastructure
projects and is an absolute must for expressways. The tangible difference of
the infrastructure-real estate linkage is already visible in a cluster of
infrastructure projects. Take Delhi's Rs 4,860-crore mass rapid transport
system where
Rs 500 crore is expected from earnings from real estate.
More on this front is expected with the government allowing 100 per cent
foreign investment in urban transport systems.
Ditto is the
case with the eight-lane Delhi-Noida expressway. While the expressway project
is still marketing its tollway, it has made plans for gaining additional income
from using its space. Cineplexes, food courts and a handicrafts bazaar - Yamuna
Haat - on the lines of Dilli Haat are in the offing.
Massive idle landlords,
the Railways, have also managed to jump the bandwagon. They have realised that
jacking passenger fares may be politically a difficult decision year after
year. It therefore makes sense to explore the hidden potential of thousands of
acres in their hold. Railways have in fact hired real estate consultant
Insignia Brooke to conduct a feasibility study on real estate development.
Railways have targeted generation of Rs 130 crore in the current fiscal out of
utilisation of idle space. In fact, it has identified 50 railway
stations to pump-prime its property development. The
arrangement is neat: Railways equity is in the form of land. The private
player, who could be a bank, food chain or a bookstall, takes the land on lease
and pays Railways a share in earnings too. Railways have also tied up with
Hudco for making housing complexes on its land in various parts of the country.
Another project
that reflects the growing significance of real estate development is on the
proposed 111-km-long, Mysore-Bangalore expressway project. Armed with 5,500
acres, the project derives sustainability on developing a township alongside
the corridor to decongest the city of Bangalore.