Tier II Cities- Best Bet
January 4, 2008
The upcoming tier-II cities across the country would still remain the best bet for real estate investors, according to Jones Lang LaSalle Meghraj. The real estate consulting company that recently announced an investment of more than $1 billion in the Indian property market says cities such as Chandigarh, Guwahati, Nashik, Indore, Dehradun, Vadodara and Vizag would be the hottest real estate destinations for 2008.
US-based Jones Lang LaSalle, the world’s leading integrated global real estate services and money management firm, recently merged with Mumbai-based property consultant Trammel Crow Meghraj. The saturation of metros and other tier-II cities is one of the factors for the drift. However, in addition to this, the proliferation of IT companies despite the poor performance of IT stocks in the latter half of 2007 would be the other impacting factor.
According to Jones Lang Lasalle Meghraj chairman and country head Anuj Puri, IT companies — the primary drivers in Indian real estate market, are not dependent on central business locations. Since it makes more sense for foreign-based companies to offload back-office functions and even serious research processes to India than to undertake these in situ, IT/ITeS companies can operate from anywhere in India, as long as there is access to skilled manpower and necessary resources.
Therefore, MNCs would want to benefit from cheaper real estate prices and set up shops in tier-II and III towns, driving up the retail, residential and infrastructure sectors wherever they go.
For sound investments in the real estate sector, emerging areas are the market drivers as they offer low entry level prices compared to the saturated markets where getting space for market drivers such as malls is often very difficult.
Hence, places like Vizag that offers cheaper land compared to Hyderabad, low cost manpower, low competition, better infrastructure coupled with high purchase power, are making it one of the most sought after cities. Designated areas in Vizag like Dwarakanagar, Seethamadhara, Gajuwaka, Rushikonda, Anakapalli, Bheemili and Paarwada for commercial development and Madhurawada, Pendurthy, Parawada, Bheemunipatnam and the areas towards the Anakapalli Corridor for residential investment are considered hot.
On similar lines comes Vadodara with prime residential areas in Alkapuri, Race Course Road, Old Padra Road, Jetalpur, Akota and Fatehganj. The Uttaranchal government is making a 60-acre IT Park in its capital Dehradun which is also driving the real estate markets skywards. Places like Chakrata Road, Mussoorie Bypass and Sahastradhara Road are the best locations for small to medium investors.
In Indore, low-entry costs in places like Vijay Nagar, Bypass, A B Road, Rau, Gulmohur Colony and Green Park Colony offer great investment opportunities. While Nashik with its proximity to Mumbai and connectivity makes suburbs of Anandwalli (Gangapur Road), Indiranagar, Untwadi, Aadgaon (off Mumbai-Agra Road) and along Pathardi Link Road a good catch. An upsurge in the retail market in Guwahati has made the Khanapara, Zoo-Narengi Road, Basistha and Beltola as the new residential hot spots.
Chandigarh scores very high on property market, people, physical infrastructure, social infrastructure and business environment. Coupled with rapid development on its outskirts, the city has seen very encouraging real estate and retail trends. Other than the city itself Panchkula, Mohali, Dera Bassi and Zirakpur offer interesting investment options. var RN = new String (Math.random()); var RNS = RN.substring (2,11); b2 = ‘ ‘; if (doweshowbellyad==1) bellyad.innerHTML = b2;