Tag Archives: East India

Slow & steady tier II & III cities marching on realty mainstream-II

Posted on by Track2Realty

By: Biraj Sen, Director, Sashwaat Realty

Biraj Sen, Shaswat Realty, Indian real estate, Indian realty news, property news, Land, East IndiaTrack2Realty Exclusive: Real estate market in India is growing fast because of the increasing demand for planned development, relatively less congestion and pollution, better hygiene and sanitation etc. that is giving way to new opportunities to grow. Investors are not restricted to one category and buyers looking to buy commercial as well as residential properties are angling towards the smaller cities such as Vizag, Pune, Nasik, Ahmadabad etc.

Further, the tier I cities demand homes with better facilities like a community system with amenities like gym, community hall, garden area, etc. while with the tier II and III cities the picture is different as their demand lies in overall development of infrastructure starting from township-apartments, malls, better school buildings and healthcare facilities.

Talking from a consumer’s point of view, the recent developments in tier II & III cities indicate that there has been a rise in the overall standard of living which in turn is making a permanent place in their wish list of buying high-quality homes. In other words, demand for investments rises when the price doesn’t pinch the pocket much.

Today 50 per cent of our business is in Delhi-NCR, and the rest in Tier-II and III cities. For example, Uttar Pradesh, a state that comprises 24 per cent of India’s population and yet Lucknow being given the status of a tier-II city, which is not exactly small. The volume that these markets are generating is better than that in the NCR. Such cities definitely have a great market, immense potential and are undoubtedly more profitable than tier-I cities.

The real estate sector through its tier II and III cities are basically trying to replicate the composite lifestyle, like in the tier I cities. Buildings with ultra modern townships is already in making in cities like Mohali, Amritsar, Ludhiana, Jalandhar, Jaipur, Jodhpur, Ajmer, Sonepat, Panipat, Karnal, Kurukshetra, Gurgaon, Lucknow, Greater Noida, Ghaziabad, Meerut and Agra,

each equipped with medical, commercial, retail, schooling, housing and other core institutions.

Apart from all the economic reasons that have led to the growth of real estate market in the tier II and III cities, there is an emotional bend too. The most important factor which gives an edge to the small town entrepreneur over their metropolitan counterparts is the close relation with their customer base. Usually in small communities, people share a close relation with each other. In some businesses, word of mouth plays a crucial role, which small town entrepreneurs enjoy.

Moreover, the competition that brands face is combated with strong consciousness drive, especially among the new borns. Advertisements play a crucial role in molding the opinion people hold about a brand. Thus, the race to be seen at the top has made the real estate sector the centre of attraction. Although the entire picture looks rosy from a distance, a close look at the same reveals that though there are more opportunities in the tier II and III cities, the lack of manpower becomes a drawback in executing the innovative ideas.

The demand for construction services in these cities are increasing, slowly and steadily. There is an increase in demand for premium hospitality spaces, shopping malls, institutional buildings and premium residential colonies as well as LIG housing. Such projects automatically create the demand for good quality construction services. Also, there is a shortage of exposure and experience and a one-stop-solutions provider is highly valued.

Yet, one cannot deny that these cities are soon becoming the driving forces in the real estate industry today. Indeed, if all parts of the Indian geography are not tapped properly, it would lead to migration. To avoid such a situation from surfacing, one has to think about expanding into the tier II and III cities.

Slow & steady tier II & III cities marching on realty mainstream-I

Posted on by Track2Realty

By: Biraj Sen, Director, Sashwaat Realty

Biraj Sen, Shaswat Realty, Indian real estate, Indian realty news, property news, Land, East IndiaTrack2Realty Exclusive: Call it migration or mere attraction, the Indian Real estate is spreading its roots into cities-in-making. Though fact remains that this sector has lots to thank the tier I cities for its large scale investments, but the winds of change are here to stay. The recent economic and investment policies, initiated by the government are giving a boost to the less known lands across the Indian sub-continent. Metros are known to be the base of big players in the real estate industry, which justifies the presence of challenging projects and the flow of burgeoning investments. Yet, there has been a shift in preference to the tier II & III cities.

The real estate sector is divided in the tier system as stated above. This distinction is based on a number of factors like availability of lucrative property, standard of living determining the investment levels and returns too, etc. Based on this division the metropolitan cities like Bangalore, Mumbai, NCR form the tier I cities because of high demand; Hyderabad, Chennai, Pune, Kolkata forming the tier II cities with scope of growth and experiments; and Chandigarh, Ludhiana, Lucknow, Guwahati, Bhubaneswar, Jaipur, Ahmedabad, Surat, Nagpur, Indore, Goa, Visakhapatnam, and Baroda forming the tier III with potential demand.

The Indian real estate market is showing a trend upwards with a number of smaller cities having relatively better infrastructure and are able to support higher economic growth coming into the limelight. Another important reason behind this shift is the availability of land, untapped manpower and a need for spacious homes. Moreover, with the increasing awareness about pollution free-environment; real estate is seen to harp on new concepts like green buildings, etc. Talking about change, there are various reasons why there has been a shift from the tier I cities.

Tier II and III cities would emerge as most sought-after real estate destinations in the coming year. Factors leading to growth of these areas are the saturation of metro cities. Moreover, what we need to take note of is the fact that the primary players in the Indian real estate market do not necessarily rely on any central business location. They can expand into the length and breadth of the country; especially given the lucrative options in the tier II and III cities. Further, the liberalized FDI policies of the government have also helped in initiating investments in these markets.

Economic activity, whether industrial or service oriented is the most vital requirement for development for any industry and more so for the real estate sector. Cities like Ahmedabad, Surat, and Vishakhapatnam have shown immense developments in both commercial and residential sectors because of large investor activity. Experts believe that with the Indian real-estate sector moving higher on the growth curve, a number of state capitals and smaller cities that have relatively better infrastructure and are Cable to support higher economic growth have come into the limelight.

Today, since the demands have increased in the less developed cities, the requirements in these cities are also something that the big players have to take note of. Innovations and creative business strategies makes way to becoming a successful key to unlock these new demands. Thus, the developers are concerned that they have to play it on a Pan-India basis; which is only possible if they can re-strategize and focus on their key geographical areas. This should be coupled with a good sense of local markets and the key demand drivers. I say so simply because as mentioned earlier the demand in the metros is less of development and more of maintaining existing structures; whereas the tier II and III cities have more scope for challenging projects in both commercial and residential real estate.

…to be continued