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Another Gurgaon in the making?

realestate Updated: May 21, 2013 19:35 IST
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Located on NH1, Sonipat (also spelt as Sonepat) is barely a 20-minute drive from Delhi’s western border near Narela. When builders first sat on the drawing board to chart the city’s future way back in 2004, they bet heavily on the population of north Delhi, hoping they would follow in the footsteps of astute investors in east Delhi, who had put their money on Noida and Ghaziabad. Also, just as south Delhi had banked on Gurgaon, they assumed that those who had missed the bus in Rohini and adjoining areas would choose Sonipat. An important point, however, was not factored in. The two main drivers of development – connectivity and a thriving economy – were missing in Sonipat.

Little did they realise that a city or town’s growth story could not solely depend on the success of small manufacturing enterprises there. The success of Atlas cycles that catapulted Sonipat to fame, way back in the 1950s, was not enough. For people to move in, for the area to witness a bull run in property prices as seen in some pockets of Gurgaon and Noida, a stronger trigger was required. The slow pace of progress on proposed infrastructure projects such as the KMP Expressway, connectivity with Delhi and lack of IT/ITeS companies in the region only prolonged the growth story. The occupancy level in the existing projects was dismally low and till date hovers around 25% if not less.

The laying of foundation stones at the Rajiv Gandhi Education City, spread over 2000 acres, in Kundli last year and its construction is the first salvo. Sonipat is now being projected as a higher education hub. Chief minister Bhupinder Singh Hooda has said that his government plans to develop many more cities like Gurgaon and that Sonipat is to be the state’s future city. He has also said that once the Delhi Metro reached Narela, the Haryana government will propose its extension up to Kundli-Sonipat. On the Kundli Manesar Palwal (KMP) Expressway, he says he hopes work on it will “start as soon as possible.”

The question is, can these announcements help the city recover lost ground? Can these developments enable Sonipat to grow at a pace similar to Gurgaon and Noida? The property market in Sonipat has not taken off with the initially anticipated speed due to delay in proposed infrastructure projects. Overall, the region lacks critical mass in terms of population, and it has yet to emerge as a preferred office destination for IT/ITeS organisations, says Santhosh Kumar, CEO - operations, Jones Lang LaSalle India.

On offering financial opportunities, the Kundli-Sonipat belt has offered moderate-to-good returns on investment in absolute terms, though not as good as Noida and Gurgaon. The average plot price today is in excess of R25,000 per sq yard compared to just R5000 per sq yard a few years ago when projects were being first launched here, he says.

On an average, there has been 30-40% appreciation in apartment rates since 2007-2008, implying that the annual property appreciation rate in the Kundli region has been in the range of 6% to 10%. Property in Noida and Gurgaon have more than doubled in the same period, he adds.