Will Global Telcos Ring In Good Times For Noida Realty?
Once a bunch of villages, the area now referred to as Noida had become a promising residential spot for millions of people migrating from across the country for employment or in pursuit of quality education. Its proximity to Delhi and the tag of national capital region (NCR) worked their magic on this industrial city.
Noida’s promise of affordability drew scores of middle-class buyers who invested their hard-earned money in the city’s real estate. However, as time would later prove, that might not have been the best of their decisions – some have been waiting to get the possession of their dream homes for as long as a decade and a half. Worse, it is not just buyers who are suffering. Companies that pumped in insane amounts of borrowed money in Noida’s real estate are also staring at insolvency. They might have overestimated the city’s potential as a gold mine of sorts. From being the most popular choice among homebuyers to a sad story of wait and despair, Noida seems to have earned itself a bad name in a matter of a decade.
But just when you thought the city’s promise had hit the wall, South Korean electronics giant Samsung’s big bet on Noida might make you rethink. After all, it could not be without a reason that the company chose the city to set up the world’s biggest manufacturing unit, and got none less than Prime Minister Narendra Modi and South Korean President Moon Jae-in to inaugurate it.
Good times calling?
Samsung has been manufacturing mobile phones in the city since 2007. In 2016, the company acquired additional 30 acres in Noida’s Sector 81 to expand its 45-acre facility. In June last year, Samsung said it would invest Rs 4,915 crore to increase the capacity of the plant. Accompanied by PM Modi, President Moon on July 9 took a Metro ride till Botanical Garden to reach Sector 81. The two, along with Uttar Pradesh Chief Minister Yogi Adityanath, inaugurated the new mobile factory.
The plant will help Samsung raise its capacity, in a phased manner, from 68 million units at present to 120 million.
In November, Chinese smartphone maker Vivo India was allotted a 169-acre land parcel by the Yamuna Expressway Industrial Authority to set up a unit in Noida with an estimated investment of Rs 3,500 crore. Vivo already operates from a 50-acre rented set up in Greater Noida where it manufactures 24 lakh mobile phones annually. By doing so, the company aims to create 25,000 jobs within one year.
Three other companies, MT&T Ltd and Raj Corporation and Kesarwani Conduit, were also allotted land parcels in the city in the same month.
Will these investments help Noida’s real estate though?
Positively, yes.
Noida can be proud of the fact that 50 of the 120 mobile manufacturing units in India are based in the city. With companies like Oppo and Xiaomi also planning expansion here, Noida could well emerge as a global leader in mobile manufacturing. Experts also believe that this will bring an investment of as much as Rs 10,000 crore over the next three years. They also expect this mobile revolution to create three lakh direct jobs during the period.
That begs the question, will Noida’s emergence as a global mobile manufacturing leader help it rid itself of the bad name it has earned as a real estate destination?
The answer is simple and lies in the fact that people, as a rule, follow jobs. They buy homes to stay close to their workplaces. So, if these mobile manufacturing facilities create employment, people would move to the city. Realty developers here would be able to sell more homes and liquidate a lot of the large inventory they have been sitting on. That would generate funds to complete projects stuck for want of equity and help revive the market cycle. Noida’s real estate market, therefore, has a fair chance of seeing a normalisation in the times to come.
However, there also are some tough questions that might not be easy to answer.
Earlier this year, a high-powered panel set up by the Uttar Pradesh government to address the issues of home buyers asked state-run NBCC to find a viable solution to clear stuck projects in Noida. It expects to find a solution in a matter of six months — a deadline it has failed to meet. Several other Central and state agencies are busy doing the same thing, without much success. Besides, there are several cases pending in the Supreme Court against property developers. Given all the kerfuffle, it might be impossible to say in definitive terms how soon Noida’s real estate market might regain its past glory. However, the city’s emergence as a hotspot for mobile manufacturing would certainly augur well.