New residential buildings armed with electric vehicle (EV) charging stations are likely to appreciate by 2-5 percent, while the price of existing buildings may rise in the upwards of 1 percent, says JLL.
According to JLL, the EV industry will average an annual growth rate in the upwards of 40 percent by 2030, given government policies and massive EV adoption rate. This will lead to an increase in demand for EV charging stations in buildings, thereby driving the need for such spaces.
It is expected that installation of EV charging stations in existing buildings will go up drastically by 2026. However, according to JLL, all new residential planned developments will have at least 5 percent of parking lots reserved for common charging facilities.
Depending on the type of buildings, these retrofitted projects will have a major impact on the pricing of residential asset class and will also help in efficient utilisation of real estate.
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The owners are installing stations with support from service providers in residential areas. In many other large-scale developments, associations have installed these facilities and, in turn, earning from the users on a fixed-fee model.
“There will be a premium of at least 1 percent for spaces in existing buildings with retrofit of charging points, given the challenges pertaining to high installation costs of charging units for large residential complexes/multi-storey buildings and limited power supply capacity. Charging stations are IoT devices, so internet availability and connectivity should also be provided,” said A Shankar, Head of Strategic Consulting and Valuation Advisory for India at JLL.
“In the short term, in places where there is high demand or more than 60 percent of the residents own EVs, this premium can go up to 2-5 percent, especially in new green residential complexes. This surge of EVs in India is due to increased demand, government incentives and the considerable population moving towards sustainable way of living which will lead to economies of scale for the developers in long run,” he said.
In office markets, the landowners will create this facility with a user fee or lease the land to charging service provider or earn through regular revenue share model, however, the challenge being the non-availability of vacant parking lots. Few existing parking lots will be reserved for such requirement in offices too. Public EV charging hubs will also provide the maintaining and servicing requirements for the vehicles.
Parking lots in metro stations and malls are also being promoted to tap this demand. Many petrol stations have also been given these facilities. Either the public authority develops the charging infrastructure and lease it to operator or lease the land to the service provider for the long term.
This is estimated to create a huge demand for the space and location, trigger more real estate asset classes and ultimately command a premium over spaces which do not provide such facilities.
Government initiatives pivotal in EV ecosystem
With an aim to prioritise a shift towards e-mobility, the government has introduced the National Electric Mission Mobility Plan 2020 and adopted the Faster Adoption and Manufacturing of Hybrid and EV (FAME) scheme in 2015 of Rs 8.95 billion ($130 million), which provided subsidies for electric two-wheelers like scooters, three wheelers and e-cars.
Under Phase II of FAME Scheme launched in 2019, Rs 8,597 crore has been approved for incentives and Rs 1,000 crore has been allocated to the development of charging infrastructure. EV Policies have been implemented in 14 states – Andhra Pradesh, Bihar, Delhi, Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Punjab, Tamil Nadu, Telangana, Uttar Pradesh, Orissa and Uttarakhand – and are in the draft stage in four states – Chandigarh, Haryana, Assam and Himachal Pradesh.
