Preferred Indian Destinations
India is the favorite investor's hub for the IT, ITES, and BPO sector. Along with it the ancillary industries like hotels, transport, insurance, banking, catering etc are on a roll. The retail market in India is expanding at an unexpected rate. The above mentioned sectors are attracting huge amount of investment from the domestic developers as well as from foreign investors. As a result these industries require large amount of land space in top cities of India to establish their businesses. Due to it, the growth of real estate market in top Indian cities is on boom.
Apart from the contribution from these established and well defined sectors, the liberalized FDI policies of the government have opened gates for investments in several other sectors. Sectors like retail, hospitality, telecom services, development of new airports, power trading, laying of natural gas pipelines, petroleum infrastructure and warehousing of coffee and rubber are favored sectors for investment.
Classification of Cities on Realty Values Almost 70-80% of the commercial real estate space is occupied by the above defined sectors. Due to the large absorption by these industries defined above, the total commercial space absorption in India has gone up to almost 15 million sq ft in 2004 from 8-9 million sq ft a few years ago.
Indian cities are classified as Tier I, Tier II and Tier III in the terms of IT and real estate services
- Tier I cities are those cities which are most favored by the investors. These cities are established as the IT hot spots and consume 60% of the total real estate space.
- Tier II cities are those which saw significant IT activity and rapid growth in real estate in the last few years.
- Tier III cities are trying to emerge as IT destinations.
The growth of IT/BPO sector is likely to continue in the near 8 to 10 years in India. The real estate investors from India and abroad are establishing operational bases in the Tier I and Tier II cities. These companies are searching options in tier II and III cities to fulfill the widening gap between the demand and supply of residential and commercial properties in India.
Indian Realty DestinationsThe primary investments in the corporate sectors are focused in the premier cities of India like Delhi, Mumbai, Bangalore, Chennai, Kolkata, Hyderabad, Gurgaon, Chandigarh, Pune etc. These cities are most favored for establishing IT firms, BPOs, Retail firms and other real estate developments. The last few years has seen ample growth in real estate development. The realty prices in these cities have also heightened in recent time.
Investors like to invest at those places where there is a planned outlay of city and proper infrastructure. Delhi, Mumbai and Bangalore have been the obvious choice for the investors for real estate investment. According to the estimation by industrial sources, by the end of 2008 the top eight Indian cities will require around 66 million sq ft of new retail space through more than 200 proposed retail centers.
Delhi and NCRDelhi and NCR are the most preferred destinations for the real investors in India. The basic infrastructure and the standard of life provided are the main reasons for huge investment in the IT and BPO sectors. According to a global market rents survey, Connaught place, the heart of Delhi, is the seventh most expensive office centers in the world. The survey conducted by real estate consultant CB Richard Ellis, reveals that Delhi is ranked second among all the cities of world, with year-over-year rent growth of 79%.
A number of major Indian as well as foreign investors are currently running a number of projects in Delhi and NCR. Main Indian investors include DLF, Unitech, Omaxe, Ansal, Vatika, Ashiana etc. The foreign groups like Goldman Sachs, Morgan Stanley, Blackstone group, JP Morgan etc. are running their projects in joint venture with Indian companies. The emergence of Noida and Gurgaon as the hot properties have provided several options for the investors.
NoidaNoida is turning into a major IT hub of the country. The city has groomed extremely fine under well-defined master plan, superb infrastructure and good connectivity to Delhi. It is rapidly changing into an investor's paradise both in the residential and commercial sector. Above all the government's policies to invite investments has changed over Noida into the ultimate destination for investors.
GurgaonGurgaon has been among the favorite destinations for the investors in India for the last four or five years. The biggest corporate offices and MNCs are working from here and others are keen to open their offices. The infrastructure here is excellent and is close to Delhi.
MumbaiMumbai has been the financial & commercial capital of India since a long time. The real estate prices in the city are at on a roll. According to a global market rent survey, Nariman Point in Mumbai is the fifth most expensive office centers in the world. There has been a large number of real estate investments in the retail and residential sectors in Mumbai. The growth of the IT and ITES sector is reflected in the real estate boom in the satellite city of Navi Mumbai.
PunePune has emerged as one of the major IT, research and academic destination of India. IT and retail are the key sectors of real estate in Pune that are prime factors responsible for its transition from a solemn industrial city to a vibrant corporate city. Its close proximity to Mumbai has made it a favorite spot for real estate investors.
The IT revolution in Pune has made it one of the most likely IT/ITES and BPO investment destinations. Pune is attracting major investments in the residential sector. Top real investors and developers are making most of this opportunity and are currently running several township projects. A large number of foreign investors have entered into Pune through joint ventures with Indian companies.
BangaloreBangalore is one of Asia's fastest growing cities with an annual growth rate of 3.5%. Over the years, it has transformed itself from 'garden city of India' to 'Silicon Valley' of India. It is evolving into a major Research and Development center. The city is riding on a IT boom and is attracting huge property investments. The city has maximum number of software companies in India and it accounts for more than 35% of software exports of India.
The infrastructure available is perfect and the standard of life is high class. All these factors are attracting real estate investors to cash on into the demand for residential and commercial properties in the city. As more number of companies are in the queue to open their offices in Bangalore, the investment in real estate sector is likely to increase in near future.
ChennaiThe transformation of Chennai from 'the automobile capital of India' to an important IT and ITES hub in the recent years is just an example of the emergence of unlikely cities as the most likely destinations in IT sector. Biggest MNCs and other giants of IT and retail sector have chosen Chennai as their operational base. It is a boost in real estate in true sense as IT companies are the major occupants of commercial spaces.
The infrastructure provided in Chennai is good and well-developed. The areas nearer to the IT/ITES hubs have emerged as localities with major demand for residential development. Velachery, Madipakkam and Tambaram are just a few names.