UP film city: Will it transform Noida’s realty market?

[ecis2016.org] With the Yamuna Expressway Authority firming up plans for the development of a proposed film city on a 1,000-acre site at Sector 21, we examine the impact it will have on real estate in the region

Even as plans are afoot to build India’s largest airport at the proposed site in Greater Noida’s Jewar, the Uttar Pradesh government has proposed to build a film city, in yet another attempt to make real estate in western UP on a par with financially successful cities like Mumbai.  The state government has also proposed to develop a financial centre close by, on the lines of the GIFT City of Gujarat.

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In fact, the bid for developing the Rs 10,000-crore film city will open on November 23, 2021, and the pre-bid conference is scheduled for December 8, 2021.

“The bid for the development of Rs 10,000 crore film city will open on 23 November, pre-bid will be done on 8 December. It will be built upon 1,000 acres of land, out of which 740 acres will have filming activities and 40 acres for film institutions,” Yamuna Expressway Industrial Development Authority (YEIDA) CEO Arun Veer Singh told news agency ANI.

Earlier, the UP government approved the bid document for the UP Film City project after CBRE, the company hired to act as the consultant for the UP Film City project, submitted its detailed report for the project.

All this means the construction of what is billed as India’s largest film metropolis, might start soon, and the production of movies from this location may start in 2024.

Of the two sites proposed by the Noida Authority and the YEIDA, the UP government decided to go ahead with the one proposed by the latter for the UP film city, primarily because of its size. The YEIDA has identified a 1,000-acre land parcel in Sector 21, for the proposed film city, as against the 500-acre site offered by the Noida Authority. The proposed UP Film City site  only six km from the upcoming Jewar airport.

Where will the UP film city be located?

The proposed film city at Sector 21 of Yamuna Expressway, is barely five kilometers from the site of the Jewar Airport, close to the proposed logistic hub in Noida, the proposed dry port and the freight corridor, while it lies at a distance of 80 kms from the Indira Gandhi International Airport in Delhi. Consequently, the location not only enjoys proximity to the national capital but also with Agra and Mathura, cities of international fame that often feature in Bollywood and Hollywood movies. In broader terms, the film city would not only be easily accessible from seven neighbouring states but also from Nepal.

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What will the UP film city have?

While inviting the film industry to the proposed film city, the UP chief minister said it would not only be a place to make films but also have the advantage of having an electronic city and financial district close by.

In fact, UP plans to provide the film fraternity a complete pre-production and post-production infrastructure, assisted by processing labs, VFX and digital technology of international standards. Adding value to the film city and attracting tourists, would be public utilities like star hotels, resorts, entertainment zones, cinemas and parks. At the proposed site, 780 acres of land will be used for industrial purposes while the remaining 220 acres will be for commercial purposes.

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Does the NCR need a film city?

Barring Satish Kaushik, Vivek Agnihotri and Ashok Pandit, no other prominent producer or filmmaker made an appearance at the event, where Adityanath announced the launch of the ambitious project that might take years to shape up. While the conspicuous absence of many producers and filmmakers from the film city launch event that took place on September 22, 2020, at the CM’s residence in state capital Lucknow, evokes skepticism about the intent of the film producing community to move base to the film city in UP from Mumbai (home to Bollywood) and Hyderabad (home to Deccanwood), the state government has made changes in its film policy, drafted during the SP government’s tenure, to offer monetary benefits to filmmakers. A filmmaker shooting over 50% of his movie in UP would get a subsidy of Rs 1 crore while the amount would increase to Rs 2 crores, if 75% of the film is shot here. If four key artistes in the script are hired from within UP, the producer would get an additional ex-gratia payment of Rs 25 lakhs. This amount goes up to Rs 50 lakhs, if the entire cast is from within UP.

So that government approvals are quick to get (an area where UP is notoriously slow), the state also plans to establish a single-window system for filmmakers.

Impact of film city on Noida, Greater Noida and Yamuna Expressway real estate

As a slowdown that started in 2013 caused primarily by overvaluations, project delays and weak buyer sentiment, gradually tightened its grip on India’s otherwise highly successful residential real estate, Noida, Greater Noida and Yamuna Expressway real estate markets suffered a severe blow.

Unlike other overvalued markets, these lacked basic infrastructure and connectivity. The fact that most builders who were dragged to the insolvency courts because of payment defaults, were from this region, only made matters worse. Amrapali, Jaypee, Unitech and 3C Company are some of the cases in point. If the market had any hopes of springing back to recovery on the back of the affordability factor, the impact of Coronavirus on real estate eliminated all those possibilities.

Note that the average property rate in Noida is Rs 4,293 per sq ft. This is much lower than the average value in cities like Pune, Chennai or Hyderabad. Even though rates shot up after the announcement of the Jewar Airport in the region, they have since remained range-bound. At a time when COVID-19 cases are increasing despite lockdowns, dragging economic growth to record low levels and consequently battering real estate in this region, developers see a ray of hope in the proposed film city.

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According to Manoj Gaur, MD of Gaurs Group, this is the biggest announcement for the region after the Jewar Airport and is likely to bring a lot of positive momentum in developments and Investments. Gaur does have a reason to cheer. His company’s integrated township, Gaur Yamuna City along the Yamuna Expressway lies quite close to the proposed site for the film city. “This announcement would be a boon for the region, both, in terms of residential and commercial development. We hope that the work starts soon on this project,” says Gaur.

Calling the move a welcome step that will open up opportunities for the regional real estate market, Amit Modi, director, ABA Corp, and president-elect, CREDAI, western UP, says the film city will positively impact all segments of real estate in and around the Noida market. “Any such initiative is bound to have a major economic multiplier effect on the local economy. It will not only attract the best talent involved in the film making process but also millions of support staff and workers, who will be looking for accommodation in the region. We feel it will have a huge impact on owned, rental, office and commercial real estate in the region,” he maintains.

While Noida’s real estate market has been plagued by connectivity issues in the past and this has significantly affected any positive moves, the same is unlikely now, says Mohit Goel, CEO, Omaxe. According to Goel, there have been meaningful infrastructural developments in this region over the past decade. Along with the upcoming Jewar Airport, the proposed film city will have a positive impact on the real estate markets of Noida, greater Noida and Yamuna Expressway, he asserts.

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Will the Uttar Pradesh film city boost luxury housing?

Developers are also of the view that the luxury housing segment would particularly benefit from Uttar Pradesh film city development. According to Deepak Kapoor, director of Gulshan Homz, Noida will emerge as the ‘most robust luxury real estate destination’ after the announcement of the film city. “People working in Bollywood would look for real estate spaces that can meet their standards and thus, projects with niche offerings will fetch good rewards. The demand for customised penthouses, villas and farmhouses in the region will increase. The wellness home concept will also witness a considerable upsurge in demand,” says Kapoor.

Kapoor also expects property values to rise. “We foresee a massive appreciation in property prices within a radius of 50 kms from the proposed film city. Not only Yamuna Expressway but the whole Noida region will benefit from this announcement,” he says.

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