Real estate development along national highways offers over 15% returns: JLL India

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Real estate development along national highways can generate a return of more than 15% for builders and potential investors, according to property consultant JLL India.

The government is focusing on providing world-class infrastructure and related services for the highway network, it said.

The consultant said there is a need for the development of commercial spaces, warehouses, and logistic parks, traveler facilities including wayside amenities along the highway.

These wayside amenities include restaurants, food courts, retail outlets, and electric vehicle charging stations.

“National highways offer real estate development opportunities across India with 15% upward returns,” JLL India said in a statement.

NHAI (National Highway Authority of India) has identified more than 650 properties across 22 states with a combined area of over 3,000 hectares to be developed with private sector participation in the next five years, the consultant said.

It includes 94 sites on the Delhi-Mumbai Expressway, 376 sites in under-construction new highways/expressways, and close to 180 sites along with an existing network of highways in India.

“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,” A Shankar, Head – Strategic Consulting & Valuation Advisory, JLL said.

He estimated a land price appreciation in said sites and micro-markets by 60-80% in the short term, and 20-25% as the facilities become operational.

“JLL has been appointed as an international consultant by NHAI for properties located in the North and South region of India. The engagement comprises shortlisting of existing and new land parcels in a phased manner, identifying options for land monetization, detailed feasibility, and financial viability of each site,” Shankar said.

Out of the 650 identified sites, bids were already invited for 138 sites and had received enthusiastic participation from market players, he said.

“Clear land title, encumbrance free and pre-approved sites, with no change in land use required, in addition to attractive lease tenure option of up to 30 years with flexible project development options will open more doors of growth for developers and potential investors,” JLL said.