The formula behind formula 1 in the national capital regionNovember 26, 2012 / By
In terms of planning and execution, the Formula 1 race in October 2011 showed the coming of age of India and outlined the importance of the Indian market in the current global environment with its consumption potential. With the second race completed last month, it is appropriate to wonder if the event could bring about a fundamental shift in the Indian real estate scene and if sporting events could act as a fulcrum for future development. Large sporting events such as the Olympics and Soccer World Cups have resulted in new infrastructure and the upgrading of existing infrastructure, while also providing the motivation for re-development or new development towards a city’s peripheries and suburbs. A similar scene is currently unfolding in Greater Noida, where the F1 event was held at the Buddh International Circuit. Greater Noida is an upcoming suburb that has yet to emerge as a significant contributor to the vibrant real estate landscape of the National Capital Region.
The 15-km radius around the track is a veritable smorgasbord of development, featuring modern office projects and proposed social and physical infrastructure initiatives, headlined by golf communities and numerous residential projects. The recently completed Yamuna Expressway offers an excellent connectivity and an unhindered drive to the location.
The excitement of the first race caused an increased number of residential launches and office project announcements. With the race promoters, expressway developer and operator and the largest land rights holder being the same business entity, the overall development plan for the area is massive. The grand plans include the creation of a world-class cricket stadium and an integrated sports city, which will span over 5,000 ha (approximately 50 million sqm), educational institutes and night safari besides integrated townships by various developers. The race track and other planned sports infrastructure are expected to encourage associated industry development and a corresponding interest in residential accommodation, providing the economic engine for growth in this region. Investors have shown interest in putting their money in one of the more affordable sub-locations in NCR with appreciation expectations based on a homogenous and planned city ecosystem.
The second race saw less interest amid questions about viewer fatigue. The investment activity also showed signs of easing off. Overall development progress is the actual differentiator. A long term development agenda has been set in motion based on an annual event. An overall boost to infrastructure growth cannot be achieved by a short-term planning horizon. The expected results and the delivery of projects will determine if the event will change the face of this suburb and leave an indelible mark.
The race has acted as a catalyst, but the future depends on the vision of the promoters, they being the largest stakeholders in this region. In the past, similar large projects have struggled with financial strains and legal and environmental hurdles. Treating the future development merely as an opportunity to speculate on land values instead of a chance to create actual properties with excellent infrastructure would be another case of an enterprise being limited by its leadership’s vision.