Value of Investment in Real Estate – Urban Area vs A Sustainable Project in a Rural Area
Urban projects have long been the mainstream choice for real estate investment in India. But do they hold up their ‘real value’ when compared to sustainable projects?
Real estate development is so crucial to urban planning that it has become synonymous with urbanization. The phenomenon has made real estate investment an economy in itself at the center of which, are urban projects. But the increasing urban investments are taking a heavy toll on Earth’s deposit of natural resources.
Sustainable projects, on the other hand, not only quantify the environmental impact of development but also minimize it.
This begs the question: What is the ‘real’ value of an investment in an urban project? And how does it fare against a sustainable project?
Urban Projects: Cost & Investment Value Breakdown
The investment value of urban projects is largely influenced by the present and future performance of various development factors. Excluding profits, the land acquisition makes up the majority of the cost (more than 50%), followed by property construction cost, infrastructure, finance, and taxes.
Incidentally, urban projects also deplete natural resources like groundwater, flora & fauna. But unlike the socio-economic factors, these costs remain unaccounted for. Moreover, most urban projects lack the facilities to replenish these natural reservoirs, further distorting their real investment value.
Simply put, the investment value of an urban project is directly proportional to the land’s monetary value. And since the land derives its value from market forces, investments in these projects are more vulnerable to market fluctuations.
Sustainable Projects: Cost & Investment Value Breakdown
The narrative changes drastically when it comes to the investment in and development of sustainable projects. Here, the land value is not of priority. Rather, the project itself serves as a diverse portfolio of investments.
Sustainable Projects usually transform barren lands in rural areas into self-sustaining nature-living communities. These projects are developed by taking into consideration their long-term impact on the environment and its resources.
Often density-controlled, these sustainable projects ensure optimum utilization and conservation of natural resources as humans thrive alongside nature. The weight of land as an investment cost reduces majorly to less than half of what it is in urban projects. The resulting freed-up funds are then invested in sustainable factors such as solar panels, land fertility, afforestation, water security, and more. Factors that are immune to the volatile nature of market fluctuations.
In other words, the investment value of sustainable projects relies on diverse, planet-favoring resources, instead of just the land.
Urban Projects V/S Sustainable Projects: Real Investment Value
Where do you see your money getting invested on?
A. Where the investment on the Land is high and on less on sustainable infrastructure?
B. Where investment on Sustainable Infrastructure is high and low on land?
Let’s understand the difference between the two in this table.
|
Point of difference |
Urban Project |
Rural, Sustainable Project |
| Center of investment | Land | Sustainable Infrastructure |
| Cost of land | More than 50% | Less than 25% |
| Construction Cost (raw materials + labour) | 10% | 20% |
| Cost to environment | Very high | Very low |
| Green Infrastructure | Less than 20% | More than 80% |
| Focus in sustainable resources |
Negligible |
Adequate provisions for groundwater recharge, solar power, etc. |
| Volatility of investment | Very high | Very low |
In their development and maintenance, urban projects often exploit natural resources beyond repair. This further affects the value of the land and the investment.
Sustainable projects are erected on the foundations of nature conservation and co-existence. At these sites, the value of investment is driven by the sustainable elements that also make up the community.
Moreover, almost all of the principal and auxiliary infrastructure at urban projects depreciate over time. Whereas, the productive infrastructure at sustainable projects is immune to depreciation as they are self-replenishing. These resources also add to the energy efficiency of the project, further reducing long-term costs.
With urban projects, you’ll be investing in the unpredictable value of the land, which may or may not profit you. But with sustainable projects, you’ll be investing in valuable resources that profit you and the planet.
How Green Panther Properties is leading the front with sustainable project near Ahmedabad
At Green Panther Properties, we build eco-luxury communities on the founding principles of sustainability and co-existence. For instance, GPP ONE, our gated community of villas near Ahmedabad, combines the joy of luxury with the act of nature conservation.
The eco-nature living villas are equipped with the most elite lifestyle amenities. But at the same time, it ensures long-term sustainability with the provisions of solar power, sustainable drainage systems, and productive Agri-Systems.
More than that, GPP ONE offers an authentic farmhouse experience with a green-to-grey ratio of 9:1 and a poly net house for each villa to grow its own organic food.
