Impact of Navi Mumbai International Airport on property prices


Read our analysis on the impact of the much-delayed Navi Mumbai International Airport on the property markets close-by, once it sees the light of the day.

Despite the fact that nearly 23 years have passed since the idea to build a second airport in the Mumbai Metropolitan Region (MMR) was mooted, agencies responsible for building the Navi Mumbai International Airport Limited (NMIAL)  have failed to start the real work on account of legal, environmental and land-related hurdles. Now, fresh money troubles might cause further strain on the project, which has already seen cost escalations since projections were first made with regard to funding (for Phase-I, costs have escalated 50% since as against 2013 projections to nearly Rs 136 billion from Rs 90 billion). How so?

In 2018, GVK-led MIAL, the concessionaire in the special purpose vehicle NMIAL, which had in 2017 won the bid to develop the project, had tied up with embattled YES Bank to finance Phase-I and Phase-II of the Navi Mumbai airport. MIAL now has to look for alternative sources to fund the development work under the two phases, the projected cost of which is pegged at Rs 12,000 crore. Work on Phase-I was likely to start by the end of 2020 after years of delays caused by various issues.

Considering the entire land where the proposed airport would be built falls under the coastal zone regulations (CZR), which don’t allow construction activity on land under its purview, legal and environmental hurdles caused major delays in start of the work initially. More complications came with regard to land acquisition and rehabilitation of displaced families even as authorities struggled to accomplish daunting pre-construction tasks such as diversion of the Ulwe River and channelising of the Ghadi River, raising the ground level to 8.5 metre and laying underground power cables.

The inordinate delay in its completion notwithstanding, the NMIAL is likely to significantly change the region’s property market dynamics once the project sees the light of the day.

 

Plan of Navi Mumbai Airport

LocationKopra-Panvel area
Project costRs 160 billion (as per 2012-13 estimates)
Project phases4
Completion timeline2022 (Phase-I); 2031 (Phase-IV)
Operation commencement2023 (Phase-I)
Passenger capacity10 million initially; 60 million upon full completion
Land requirement2,268 hectare
Equity holdingMIAL 74%-CIDCO 26%
Runways2
Flight handling capacity80 flights per hour

 

 History of Navi Mumbai International Airport 

 

2019

 GVK awards a contract for construction to L&T Engineering and Construction

 2018

Feb: PM Narendra Modi presides over the ground-breaking ceremony

March: London-based Zaha Hadid Architects appointed to design Terminal 1 and ATC Tower 

2017

 Feb: GVK-led MIAL wins the bid to develop the airport

 April: Environment ministry gives clearance to carry out pre-development work for the airport 

June: Pre-developmental work for the project starts 

2016

 Environment ministry gives stage-2 forest and wildlife clearance for the project

 2014

 CIDCO invites tenders for requests for qualification

 2010

 Defence ministry gives go-ahead to the project

 2008

CIDCO appointed nodal agency for the project

 2007

Union Cabinet gives in-principle approval to project development report

 1997

 Central aviation ministry sets up a panel to find a site to develop a second airport in the MMR

 

Impact of Navi Mumbai airport on property market

Upon completion, the NMIAL would not only ease the burden on Mumbai’s Chhatrapati Shivaji International Airport (CSIA) ─ the single-runway airport in India’s financial capital which accounts for over 25% of the entire air traffic in India ─ but also give a major boost to Navi Mumbai’ realty, where housing sales have seen a downwards movement year after year.

Despite being a hotbed of affordable realty lying among scenic beauty, Navi Mumbai realty hasn’t been able to get the attention expected to receive when plans were first made to create a city parallel to the country’s commercial nerve centre Mumbai, during the 1970s, when it became clear the space-starved Maximum City was on the verge of a population explosion.

As against 16,787 units sold during 2017, only 15,533 homes were sold in the 25 key localities of Navi Mumbai in 2019, shows PropTiger.com data.  On the other hand, over 34,000 housing units were lying unsold in markets across Navi Mumbai.

A brand-new airport would positively impact the housing market in Navi Mumbai by way of improving the area’s commercial value, primarily by generating employment opportunities. Once operations start, the NMIAL would create job opportunities for as many as four lakh people. This working population would buy and rent homes in nearby areas, pushing the demand for rental and residential realty in Navi Mumbai.

Once the Navi Mumbai Metro becomes operational (likely to happen by August 2020), demand for property in this area would increase further, resulting in an increase in values. Similarly, the Mumbai Trans Harbor Bridge, which will significantly reduce the commute time from Navi Mumbai (Nhava Sheva) to South Mumbai (Sewri), will act as a booster for the realty of the independent city, which was ranked second in the government’s ease of living index in 2018.

 

Average price in top* Navi Mumbai localities

LocalityPrice per square foot
PanvelRs 6,100
UlweRs 7,470
TalojaRs 4,564
KaranjadeRs 1,551
DronagiriRs  1,108
KhargharRs  7,596
SeawoodsRs 15,143
GhansoliRs 11,406

 

Note: Rankings are based on sales numbers in 2019

 

FAQs

Where is the location for Navi Mumbai International Airport Limited (NMIAL)?

The NMIAL is located in the Kopra-Panvel area.

When will the NMIAL start operations?

Operation under phase-1 of the project is likely to start in 2023.

When will work on the NMIAL start?

Work on phase-1 of the project is likely to start by the end of 2020.

When will work on the NMIAL be completed?

Work on phase-1 of the project is likely to be completed in 2023.

How many families are impacted by the airport?

An estimated 3,500 families across 10 villages are impacted by the airport project.

What is the estimated cost of Navi Mumbai airport?

As per government estimates in 2013, it would require Rs 160 billion to complete the project.

What would be the passenger capacity at NMIAL?

The fully constructed airport will handle 60 million passengers in a year.

 

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