Tier II and III cities push over Tier I cities in Real Estate
Move over Tier I cities; it is time for Tier II and III to take over. From Meerut to Kanpur to Lucknow, Tier II and III cities are becoming hubs for ambitious residential community projects. Not only are these projects ambitious in terms of the amenities on offer, but also the designs. Most of these projects are theme based. For instance, a project in Indore is coming up by a lake with the theme of a hill station while in Meerut a project is coming up in the form of Sports City. In the real estate market, Tier II and III cities are expected to show a major growth spurt in the realty market especially with concept housing. Property in Kanpur, Lucknow, Kochi, Mathura, Meerut and Indore are showing a boom when it comes to glamour houses with elite addresses.
Large property developers such as Supertech have come up with a sports themed housing project in Meerut. In Hardwar, a special Krishna Nakshatra Home is being built by Krishna Infocon. The project shall have astrological and spiritual parks founded on the idea of 27 nakshatras. Chandigarh’s Mohali too shall have a slice of Venice amidst it with the Venetian Spaces located in Sector 112, being helmed by Manohan Singh and Co. The price of this project per yard is around Rs 18000 to Rs 20,000. The project shall offer buyers premium residences of the Roman architecture style including the palatial ambience that is there in Venetian villas. Bhiwadi near Gurgaon is also coming up with the Terra Castle constructed by Renaissance Realty. The society shall have vast open spaced which would be surrounded by greenery. The gardens shall be landscaped and the water bodies within the complex combined with a grand entrance can make anyone feel like they are living a life of grandeur. The prices of these properties are between Rs 1540 and 2605 sq. ft. The smaller cities offer better benefits such as vaster expanses of greenery, peaceful environment and a comfortable and snug lifestyle. The improvement in connectivity to outskirts, more numbers of people are comfortable with travelling the distance from their home to their workplace if the housing complex suits their lifestyle.
The potential for theme based realty projects is high in the property markets of Tier II and III cities. For example, in future, Meerut shall experience the presence of many stadiums and sports academies, making their projects well adjusted with the needs of the people. For example, the complex being built by Supertech called the Sports City, shall have a well equipped sports complex which shall cover 12 acres, offering proper access to sports training for their residents. When it comes to response from markets, builders are quite positive about demand from consumers. Most of the theme based properties have started taking in bookings. The price of these theme based properties is more than the non-themed ones by almost 5 to 10 percent.
The Krishna Nakshatra Home project coming up in Hardwar is also quite an innovative concept as it aims to bring in good health and wealth and success as per your stars and planets. For this complex, Nakshatra is apt as a name. Even though some bit of this project is much under construction, the booking for it have begun. The property is quite close to Haldwani as it is located on the NH58. The configurations available in the complex are 3, 2 and 1BHK ones and their prices vary between Rs 2000 and Rs 2500 for a square foot.
Most of these theme projects have been constructed for smaller cities based on the local needs. The design and delivery of the projects too are aligned to the needs of the city. For example, Suncity Projects’ Hi-Tech City in Mathura is quite an innovative project. Aside from the residential part, the satellite city shall have highly technology oriented services which comes with top grade standards for multiple function activities such as institutional, commercial and tourism activities. The concept of investing in Tier II and III cities which are well connected to metropolitan cities and have a green and peaceful ambience is going down well with realty investors. This is the reason why property in Kanpur, Lucknow, and Meerut etc. are being developed rapidly. The tier III urban areas are emerging as lucrative destinations for the retail realty sector mainly because of the rising purchasing power of residents of these cities and the development in infrastructure. Cities such as Amritsar, Nagpur, Coimbatore, Jaipur, Lucknow etc. have high potential as retail markets.
High quality infrastructure, good immigration, rising per capita earning and higher propensity of consumption are main drivers for retail market potential in tier III cities. Aside from that, a rise in commercial and office spaces is an important market driver for retail development in these markets.
Chandigarh, Surat and Ahmedabad have already come up as high potential markets whereas property in Kanpur and Raipur are moving up slowly in terms of their potential for retail markets. Leading cities such as Bangalore, Delhi and Mumbai have the highest possible level of market potential and maturity of retail sector. Consumption, increase in income and infrastructure of Tier III cities have high potential for developers and retail marketers. Top metropolitan areas such as Delhi and Mumbai have witnessed an inflow of fast fashion, big box and higher end retailers. Other southern cities such as Chennai, Pune and Bangalore have shown reasonably high absorption of retailing spaces based on high levels of consumerism, backed by the strong IT and ITeS sector along with strong biotech, manufacturing and auto sectors.
Expansion of cities, betterment of infrastructure and right kind of supply of retailing malls have been the main reasons behind growth in the recent past.
Therefore, both housing and retail investment in these tier II and III cities are set to go up in the near future because of a lifestyle based on commercialization, consumerism and high income. In the years to come, the trend is set to strengthen especially as some of them will be developed into Smart Cities.