Real Estate Development In Tier – II Cities

A leading real estate consultant company has said that tier-II cities of India will continue to be the hot spot for real estate investors despite the slump. According to the company, cities such as Chandigarh, Guwahati, Nashik, Indore, Dehradun, Vadodara and Vizag would emerge as most sought-after real estate destinations in the coming year.
Factors leading to growth of these areas:
One of the basic factors which have encouraged growth in these areas is the saturation of metros and other tier-II cities. However, besides this, the coming of IT companies despite the poor performance of IT stocks is the other impacting factor.
As per sources, the primary drivers in Indian real estate market do not rely on central vbusiness locations. It is very much possible for IT/ITeS companies to operate from anywhere in India, as long as the availability of skilled man power and necessary resources is accessible easily.
Moreover, the liberalized FDI policies of the government have also led to initiated investments in the realty sector.

As per the industry analysis, the sector is currently pegged at US$ 70 billion and is expected to attain the size of US$ 120 billion by the end of 2010, thus attaining a consolidated growth rate of staggering 70 per cent in three years. These investments have not only ensured growth of real estate in the mainstream cities but also in various tier-II cities.
Other contributing factor is the coming of MNCs:
Another reason which has led to the growth of tier-II cities is the coming of MNCs. MNCs’ take full advantage of the cheaper real estate prices in tier-II and III towns, which in turn leads to pushing up of the retail, residential property and infrastructure sectors wherever they go.
Emerging areas like these tier-II cities offer excellent real estate investment opportunities because of the low entry level costs compared to the saturated big city markets where getting space is very difficult.
That is one of the main reasons why places like Vizag that with cheaper lands when compared to main city, Hyderabad, low cost manpower, low competition, better infrastructure coupled with high purchase power, is one of the most promising tier-II cities. The most sought-after areas in Vizag for residential investments are Dwarakanagar, Seethamadhara, Gajuwaka, Rushikonda, Anakapalli, Bheemili and Paarwada for commercial property development.
Vadodara is following the same trend, with prime residential areas in Alkapuri, Race Course Road, Old Padra Road, Jetalpur, Akota and Fatehganj. Other contributing factor that has taken the real estate development in the city skywards is a 60-acre IT Park (to be developed by Uttranchal Government) in Dehradun. Places like Chakrata Road, Mussoorie Bypass and Sahastradhara Road are the best and the most promising locations for small to medium investors.
In cities like Indore, low-entry prices in places like Vijay Nagar, Bypass, A B Road, Rau, Gulmohur Colony and Green Park Colony offer great real estate investment opportunities. Similarly, Nashik because of its proximity to Mumbai and connectivity make suburbs of Anandwalli (Gangapur Road), Indiranagar, Untwadi, Aadgaon (off Mumbai-Agra Road) and along Pathardi Link Road, is a good catch.
Even far-fled areas like Guwahati because of an upsurge in the retail market like Khanapara, Zoo-Narengi Road, Basistha and Beltola, has become a hot residential spot.
When it comes to talking about tier-II cities, how can we forget Chandigarh?
This union territory scores very high on property front as well as because of its people, physical infrastructure, social infrastructure and business environment. Along with rapid development on its outskirts, the city has seen very encouraging real estate and retail trends. Besides that, the city itself has areas like Panchkula, Mohali, Dera Bassi and Zirakpur that offer interesting investment options.
Besides the real estate development, a lot of retail activity is planned in tier-II cities. In the coming years, the tier II and III towns and cities are expected to see many niche malls developing up.
For instance, Mr. BK Modi promoted Mcorp Global, which owns the Spice World chain, is focusing on lifestyle and entertainment in tier-II cities. Besides that, Omaxe Properties is developing most of its 14 shopping malls in tier II towns.
International property consultant, Jones lang La Salle has identified 25 cities in India as the most attractive real estate investment destinations. About 21 of these are tier II include tier-II cities.

Sukhpreet Kaur writes on behalf of 99acres.com, which is an internet portal dedicated to meet every aspect of the consumers needs in the real estate industry. It is a forum where buyers, sellers and brokers can exchange information. At 99 acres, you can advertise a property, search for a property, browse through Real Estate and Properties.