Net Absorption is an important metric to understanding the profitability, sustainability, and stability of an investment in commercial real estate.
An Aerotropolis is a metropolitan region that is situated or constructed around an airport. It is a fusion of the two words aero (aviation) and metropolis. While Aerotropolis may have been a novel idea for Indians, it wasn’t completely unknown, as we have a rich history that is filled with examples of cities and towns developing around local trading centres ( port cities) like Machlipatnam and temple towns like Varanasi. Aerotropolis or Airport cities are just modern-day examples of cities developing around trading centres.
The SujalaamSkycity (Andal Aerotropolis) in Asansol parliamentary constituency was the first Aerotropolis in India. Hyderabad, due to its strategic location, connectivity, economy, infrastructure, governance, and real estate demand is on an assured path to getting recognized as an Aerotropolis city very soon.
History of Airport Cities in India
India is diversifying into becoming the new Aerotropolis hub. There are several reasons for such dramatic changes, a few of which are listed below.
- Economic Liberalisation (1991)
As the open skies policy of 1991 led to a substantial increase in air traffic. Years 2006 to 2013 saw the passenger traffic grow by 65% that is up to 159 million. Increasing air traffic requires better infrastructures and also scope to expand the airports to minimize challenges and ensure growth in the sector. Experts believe that this could have been the first spark of Aerotropolis in India.
2. Airport Privatisation
The Airports Authority of India or the AAI had passed an amendment that allowed airports to be owned and operated by private bodies, or follow a Public-Private Partnership model (PPP) model for the development of greenfield airports. These bodies were also permitted to acquire FDI of foreign direct investment for expansion and up-gradation of existing airports.
3. Airport City
While the public and private bodies worked in synchronicity to expand airports and build new infrastructure, it was around this time that they also accepted and adopted the global concept of Airport City or cities situated around an Airport.
Why is India the next Aerotropolis hub?
Aeroteopolis is a very dynamic concept as it does not just aim at increasing business or developing an ecosystem around the airport, but it also aims at connecting other trades and businesses, civilizations, people, and regions. It is a great way of taking one’s culture forward with a modern approach. Aerotropolis or the airport city is an urban development with an airport at the center and aviation-linked businesses growing and flourishing around it. This western concept, while still in its exploration phase, has attracted a lot of investors to work on its greenfield airports of Bangalore, Hyderabad and Kochi.
These are also emerging as great investment hubs and Assetmonk is bringing an investment opportunity within Hyderabad International Airport. As the wealth-tech platform aims at democratizing the investment world and bringing world-class investment opportunities for its clients, you wouldn’t want to miss out on this once-in-a-lifetime opportunity.
So do visit the Assetmonk website to explore this investment opportunity and grow with the future.
Top 3 Aerotropolis cities in India
GMR Hyderabad Aerospace and Industrial Park
Hyderabad International Airport will soon become an aerospace cluster and an industrial cluster as a part of the international airport. As the city falls into a multi-product Special Economic Zone, we will witness the development of business, healthcare, education and even fun centres all in one place.
Bengaluru International Airport
Bangalore has a strategic location that allows it an opportunity to grow in length and diversify while holding on to its heritage. The growing government and real estate demands of the property are sure to make it the next big Airport Capital of South-East Asia’s Changi International Airport in Singapore and Incheon International Airport located in Seoul, South Korea.
The Kempegowda International Airport is spread over 4000 acres and is located about 30 km north of the city of Bangalore. The Bangalore Airport city will be spread over 530 acres and will enable passengers and visitors to indulge in business and leisure within the Airport vicinity itself.
Indira Gandhi International Airport
With the IGIA at its centre, the Aerocity of Delhi will be seeing a lot of growth and vibrancy. As Aerocity directly connects Delhi, Gurgaon and other major cities, Aerocity can grow as the commercial hub of NCR.
The IGIA is built to provide leisure and luxury to its passengers and also help the business and connections grow.
Infrastructure development is a key driver of the economy. The development of roads, highways and logistics will be an impetus for tourism and business in a city. Airports are becoming the new centres of economic activity making them both a great asset and investment. As airports are a considerable boost to the city area, cities developing around airports or aerotropolis can be the next big hit in India.
According to a 2015 report, 80 airport cities around the world are either fully functional or greatly occupied to make the most of it. Diversification of Indian Airports into aerotropolis will be a big hit.
Aerotropolis Culture in India FAQ’s:
Aerotropolis is a metropolitan city that develops and diversifies within and around an airport space.
As an aerotropolis includes a healthcare and education centre all combined, the airport city is just a mini-city situated around an airport.
Still worried about real estate investment? Here is the complete guide to investment risk management
In the world of real estate, property investment has long been a hot topic. People have shown a desire to invest huge sums of money in residential and commercial properties. However, the fact that remains unspoken is that the investment will only be effective if the purchasing method is carried out appropriately. There are various concerns that you should be aware of, even if they are not immediately apparent to you.
Internal rate of return (IRR) and return on investment (ROI) are two typical metrics for determining how well an investment has fared over time.
If you’re considering real estate investment, you’re about to embark on one of the most rewarding investment experiences of your life. Here are a few pointers to help you invest like a pro!
When it comes to meeting tax requirements, buyers must pay the applicable GST on their property purchase in addition to property taxes. Several adjustments to the GST regime aimed at the real estate sector have been introduced in recent years. To make an informed decision about investing in this industry, potential investors and homebuyers must examine the impact of GST on real estate.
Due to the complicated nature of GST, several myths are being spread in the market to fool customers. Here is what you should know.
Reasons why NRIs are moving to Indian Commercial Real Estate ✓ Growing market ✓ Urban development policies ✓ Growing demand for office spaces ✓ MNCs in India ✓ Government reforms in favor of Foreign Investors
What factors should you consider while selecting an investment tool? In reality, it all boils down to a few factors: the duration of the investment, the volatility of the investment, the risk of the investment, and the validity of the investment. We compared investments in equities, real estate, and digital assets for these factors.
Investing in commercial properties such as apartment buildings, hotels, vacation homes, resorts, and office spaces to earn high rents or income. The pandemic taught us many important lessons, but most of all, it reminded us of the importance of having multiple income sources, especially a large corpus of regular passive income to keep us afloat in case of emergencies.
Which is the better investment: rental property or REITs? ✓ Adding real estate to your investment portfolio can help you diversify, increase profits, and even hedge against inflation risk ✓ When it comes to investing in real estate, though, you have a few options. Rental property and real estate investment trusts are two of the most common real estate investing options (REITs)
Fractional property ownership, being a relatively newer topic in India, has been through a lot of speculations and questions based on the norms and regulations surrounding it.
An investment is only good enough as long as it gives high returns, in the context of real estate investments via fractional ownership, planning an exit route becomes very easy.
Fractional ownership is a relatively newer idea for Indian investors, which also makes it subject to speculation. As misconceptions breed around the topic, more and more people distance themselves from the investment class for their disadvantage.
The biggest investment in India’s real estate sector by an international private equity (PE) recently has caused a lot of activity that might be in your favour.
Property investment is not only limited to buying and selling properties. It is also about generating a steady rental income. An ideal property is one that keeps appreciating in value until it is sold off. Hence, property management is essential.
REITs, in comparison to direct real estate investments, allow investors to make affordable investments by purchasing highly liquid shares of the property. The income tax norms also provide reit investors with indexation benefits and much more.
Development plans are taken at major airports across the world. Many cities around the world have developed an aerotropolis of their own. About 80 aerotropolis towns and aerotropolis cities are operating and developing around the globe.
REITs are good portfolio diversifiers that can help enhance returns and minimize overall portfolio risk.
A REIT is a hybrid investment product with features of equity and debt. It’s a way to get both regular income and capital appreciation.
With more NBFC banks jumping on the low home loan bandwagon, real estate companies forecast a new booming holiday season, while some are concerned about lower home loan rates.
Right when commercial offices and co-working spaces were going to expand, the world went standstill due to the pandemic. The new normal has not just changed our perception of what is right or wrong but also made everyone unsure.