The “orchestral cacophony’ of the beastly Formula 1 machines that has ruled over Yamuna Expressway in the last three years might fade out till 2016. F1 supremo Bernie Ecclestone said recently that “at the moment, India won’t be on for next year, for sure.”
However, will an event of such magnitude have any impact on the emerging real estate market in an area where F1 racing was the chief pivot? The real estate market here was expected to get about three lakh residential units over the years, out of which over 25,000 units are likely to be delivered within the next three years.
When the first race was held, realty experts had said that the real impact of the event would be “felt in the mid to long term as the event becomes more regular. The gains from the event will emerge once the area develops into a live, play and work destination.”
While the main driver, the Yamuna Expressway, itself is up and running, reducing travel time between Delhi, Noida, Mathura and Agra to almost half and the education sector has got a fillip with some universities getting operational, the going is slow for the market. Actual delivery of units, people settling in the area and job creation in commercial sectors will take another five to six years.
F1 all along has been seen as a great anchor for developers as returns do not come from the event but out of the real estate monetisation of residential projects. The impact is akin to the setting up of the Maruti ­factory that brought thousands of people to Gurgaon in the early ’90s.
“The global event was an excellent anchor strategy to bring a far flung area not considered part of an established development corridor into the mainstream,” say real estate experts.
The story of Yamuna Expressway was woven around the F1 track. It appeals to people looking at the value end of the market, in the range of `20 lakh onwards. These people are not necessarily waiting for the F1 to happen and their decision is largely based on the budget that is set aside for a property purchase. Had the F1 event, which added value to the area, continued, it would have allowed developers to position the area as an upmarket one, says Anckur Srivasttava of GenReal Advisers.
According to Honey Katyal of Investors Clinic, the F1 destination was like an address, something similar to Golf Links. The destination became attractive in 2011 after the first F1 event was held. Since then, there have been a host of new developments – Night Safari, new universities, an international cricket stadium, not to mention the Yamuna Expressway, the completion of which has so drastically improved connectivity in the area.
While properties in Noida Expressway are priced at `4,500 per sq ft and `5,000 per sq ft, expect to pay up anything between `2,500 per sq ft to `3,000 per sq ft in the Yamuna Expressway area close by. The price difference is almost 50%. Two universities are already functional and the proposed Night Safari is likely to see a spike in tourist traffic and development of hotels and guest houses in the area.
The Buddha International Circuit is currently being used for events bycorporates. Companies such as Ferrari, Mercedes and Volkswagen use the track for their events and racing series, a truck racing event will also be organised soon, says Vibhor Gupta of Jaypee Greens. The F1 races might have created the initial demand motivation but the area holds promise,”points out Shveta Jain, executive director, residential services Cushman & Wakefield.
F1 across the world
The Silverstone F1 circuit, built on the site of a WW II Royal AF bomber station, hosted the first race in 1948. Rooms are rented out three months before the event
In Monaco, real estate agents let out apartments and even balconies when the F1 is held in spring. The price tag is nothing less than $6,000 for the use of an apartment
Sepang, 25 km from the Malaysia’s capital Kuala Lumpur, hosted its first grand prix in 2010. The city’s rand prix track was built on a 260-hectare swamp
Istanbul has built a track in a desolate outlying part of the Turkish city, while the circuits at Yas Marina in Abu Dhabi and at Marina Bay in Singapore are residential areas