Appraisal experts have raised concerns over the growing risks of overvaluation in Special Economic Zone (SEZ) corridors as land prices continue to soar beyond fundamental levels. While SEZs are designed to boost exports, manufacturing, and investment, rapid speculative buying has led to land valuations that often do not align with current industrial demand. Analysts point out that many of these zones are still under development, lacking the full tenant base needed to justify such sharp price escalations. Overvaluation threatens to create artificial bubbles, making projects financially unviable over the long term. Experts are advising investors and developers to exercise caution when assessing land acquisitions in newly designated SEZs. An overvalued market could disrupt planned industrial expansion and delay broader economic goals.
A key issue highlighted is the reliance on projected economic activity rather than on-ground realities such as operational industries, infrastructure readiness, and actual occupancy rates. In many corridors, while infrastructure projects are announced, the supporting ecosystem for industries is still evolving, creating a gap between perception and real value. Appraisers stress the importance of basing valuations on verified leasing activity, supply-demand assessments, and regional economic performance. Overvalued properties could face challenges in securing financing, leading to stalled developments and stressed assets in the future. Lenders and institutional investors are being urged to tighten their due diligence processes. Grounded, fact-based valuations are essential for maintaining sustainable growth in SEZ corridors.
Industry bodies and financial institutions are now pushing for stricter regulatory oversight to ensure that SEZ corridor valuations remain transparent and realistic. Regular market audits, dynamic valuation models, and updated government guidance rates are among the measures being suggested. Appraisal experts recommend phased land releases and incentives tied to occupancy milestones to avoid unchecked speculation. Ensuring pricing discipline will help SEZ corridors mature into true engines of economic activity rather than becoming zones of speculative volatility. Sustainable valuation practices will be crucial for maintaining investor confidence and supporting long-term industrialization efforts. Addressing overvaluation risks today will safeguard the future success of India’s SEZ development initiatives.