As the table turns on Ayodhya, the temple town will become a key growth engine of UP’s economy. It is, however, wrong to presume that Ayodhya’s growth will mostly be centered on hospitality, tourism, and real estate. The temple town will follow a more balanced, multi-phased and multi-themed development, says Ankit Kansal, MD, Axon Developers.
In an exclusive interview with Sanjeev Sinha, Mr Kansal shares some interesting insights on Ayodhya’s growth trajectory alongside how the temple town can become a key lever in UP’s economy. Excerpts:
How do you think Ayodhya’s economy will evolve from here?
Ayodhya’s economy will make a steep jump. The temple town has surely arrived, boldly on the national levels and partially on the world stage. The government has unveiled an ambitious Rs 83,000-crore master plan for Ayodhya, which is backed by swift ground actions. Already 180 projects worth Rs 30,500 crore are underway. Development agencies are working on a string of big projects including townships, aerocities, artificial islands, retail & entertainment zones, riverfront developments, theme parks, etc.
New airport, revamped railway stations and widening of highways have greatly enhanced the connectivity of the city. Ayodhya will emerge as an integrated tourism market with multi-theme development. While spiritual tourism will be the focal point, there will be increased interest in rejuvenation, wellness, leisure, events, business retreats, etc. as well.
The temple town’s religious significance and increased tourism business will give a huge buying boost to the real estate sector as well. The combined positive impact will also cascade to multiple other segments such as retail, trade, F&B, etc.
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If we specifically discuss the hospitality industry, how do you view the future pipeline of hotels?
The state government estimate suggests Ayodhya will receive 4.5 million tourists monthly, translating into an annual visit of 54 million. Even if 70-75% of the estimation actualizes, it will still be a vast number. Accommodating such a large influx of tourists will require a huge number of hotels. Ayodhya presently has close to 3300 hotel rooms (apart from 2500 homestay rooms) with an additional pipeline of 76 top tier hotel projects. IHCL is coming up with 3 projects which will commence operations by 2027. It will collectively have 400 rooms. Top tier hospitality players such as Wyndham, Radisson, Lemon Tree, Kamat etc. have announced big projects. Other premium brands such as ITC, Marriott, Hyatt, etc. are expected to follow the course. In the budget segment OYO Rooms are ramping up the supply with a pipeline of around 1000 new rooms. It is a no-brainer to say that the times ahead are exciting for the hotel business in Ayodhya.
What about real estate? How will the sector in Ayodhya evolve in the times to come?
Real estate in Ayodhya is surely a goldmine for buyers. Owning a home or a piece of land in the holy city is a matter of immense emotional significance for Hindus all over the globe. Investing in second homes and hospitality suites is also a prudent choice as one can make rental income apart from personal use.
We have done an analysis at Axon on the future property price trends in region. In the central parts of Ayodhya (3 km radius from the temple premise), many hospitality businesses are vying to own a piece of land. Average property rates are Rs 6050/ sq ft but can reach over Rs 9000/ sq ft in the next 24 months. In the next 5 years, the rates can amount to 12,650/ sq ft. The wider and outer region, where majority of real estate games will be played out, will chronicle similar incremental trends. In the wider region (3-8 km radius from temple), the property prices are presently Rs 3950/ sq ft and are slated to reach Rs 7773/sq ft by 2029.
Will the growth in Ayodhya hover around hospitality and real estate largely? Can there be other potential segments?
No, it will be wrong to presume that Ayodhya’s growth will mostly be centered on hospitality, tourism, and real estate. The temple town will follow a more balanced, multi-phased and multi-themed development. As humongous volumes of tourists will pour in, a host of ancillary businesses such as retail, F&B, handicrafts, lifestyle, gifting, puja items, healthcare, transport, fruits & vegetables, farm produce, dairy etc. will witness a spike in demand.
Similarly rampant pace of infrastructure development will feed into demand for cement, brick, construction materials, furnishing, machineries, tiles etc. This will unravel new avenues of growth for both local business owners and bigger enterprises.
It is noteworthy that opportunities will also spill to other nearby districts such as Sultanpur, Barabanki, Ambedkar Nagar etc. thereby setting the stage for regional growth. There will be new opportunities in heavy industries as well.
Recently we have heard the news about Trafalgar planning big investment in Ayodhya. Do you think Ayodhya really has the potential to become an industrial powerhouse?
As per media reports, Trafalgar is planning an investment of Rs 75,000 crore to set up a defence equipment manufacturing complex in the Ayodhya district. It makes perfect sense to start a defense manufacturing system in Ayodhya, as it is conveniently linked to Lucknow (150 kms) and Kanpur (220 kms), two of the major nodes in the UP defense corridor. This will help defense companies to leverage state-of-the-art infrastructure, manpower, and established ecosystem.
Not just defense but Ayodhya can become an epicenter of a wide range of other heavy industries such as solar power, heavy machineries, automobile, textile, medical devices, pharma, farm equipments, etc. Enhanced connectivity, robust infrastructure, and global standing will naturally translate into increased interest from large business houses, both from India as well as abroad. As new townships, retail zones, and civic facilities are getting developed at relentless pace, it will be easy to attract top-quality manpower as well.
Is Axon also planning any real estate project in Ayodhya?
We are looking at a couple of land parcels in Ayodhya. The market is high up on our agenda, but we will divulge details when things are finalized.
