Investor Sentiments Unleashed: How Infrastructure Corridors Reshaping Indian Real Estate Landscape?

The Indian real estate market is going through major changes, where the rapid pace of infrastructure development is fundamentally changing the dynamics of investments and the perception of real estate across the nation. The synchronized integration of infrastructure corridors that are developing throughout the country is creating and completely changing the future of real estate investment.

The large-scale infrastructure corridor development policy of the government comprising dedicated freight corridors, expressways and multi-modal transportation networks, serves as the most important factor for the enormous growth of real estate. These large scale spanning infrastructure projects do not only enhance open connectivity but rather shift the structural economic activities to previously seen under-developed areas and geographical landscapes.

"Infrastructure is not an ancillary aspect of real estate development anymore. It has become the most important factor when making investment choices," states Aman Gupta, Director of RPS Group These infrastructure corridors advance the development of economic frameworks that enable institutions and retailers to compete without restrictions.

The DMIC or Delhi-Mumbai Corridor, the Eastern Dedicated Freight Corridor and the expansion of the national highways are defining an entirely new investment potential throughout India. The foothills of development are now moving far, inviting Vadodara, Ahmedabad, Pune cities and many nodes along these corridors to graduate to a new level with dramatic growth in property prices.

This shift is however not the result of the random growth dynamics, Sandeep Mangla, Managing Director of Forteasia Realty Pvt. Ltd. emphatically states: "The third in the triad of factors that influence the price of real estate - 'Location, location, location' is in the past. Today, it is 'Connectivity, infrastructure's possible investment returns, and future income streams. Investors are no longer looking for clear-cut paybacks, but rather how paybacks will arise in the longer term through investments in infrastructures."

The construction of a real estate asset, in this instance a boom, attracts a multitude of forces in different directions. New transport corridors shorten distances and integrate these virgin territories into the broader economy, while new hubs and development territories emerge. Accordingly, where new nodes emerge lasting around these corridors, the value of the properties has already increased by approximately 30-50% recently to attract good institutional and investor interest.

Smart cities, high-speed internet corridors and technology-enabled urban development are augmenting the digital infrastructure with the physical consequently such investments are providing substantial added value on real estate investments along strategic corridors with ever-expansive and integrated investment opportunities.

"We are seeing the integration of the physical and digital infrastructure and the emergence of a new format for investing in real estate," says Siddharth Maurya, Founder & Managing Director, Vibhavangal Anukulakara Private Limited. "There is an integrative perspective to infrastructure than just roads and railways, its about technologically enabled living and working spaces."

There have been major headwinds on investors' attitude from a wider focus on metropolitan centres to a more specific sphere striving for investment opportunities within functional infrastructure. Now, retail investors, institutional funds, and real estate builders focus on regions of emerging economic corridors, areas of planned infrastructural development, regions with multi-modal links and sites of prospective industrial and commercial activity.

The investment in infrastructure projects is expected to completely change the Indian real estate sector. As infrastructure is further built in the country, there is great potential demand for infrastructure-created real estate and investments made by foreigners in India.

There are several factors driving investment in both infrastructure and real estate in a mutually reinforcing manner that is enabling the evolution of an exciting growth horizon that requires a contrarian approach. The lesson here is quite simple and straightforward: With respect to the Indian real estate market, it is not merely that infrastructure is important; it is the most important thing.