India Real Estate: Move Over Mumbai / Bangalore, Chandigarh / Kolkata are Here!

A global realty consulting firm predicts in the next five years, five Tier III cities are all set to emerge as major IT off-shoring / outsourcing hubs, largely due to greater cost advantages, and despite higher comfort levels offered by Tier I and II cities. Peter Barge, Asia-Pacific CEO of Jone Lang LaSalle confirms: “India is one of the lucrative emerging real estate markets and offers huge scope in IT/ITeS segments along with the retail sector, maximum growth opportunities in emerging cities lie in commercial property management”. Labour and capital cost advantages, state governments taking measures to foster a favourable business environment, improvements in basic infrastructure facilities are some of the factors providing attractive investment possibilities in Tier II and III cities

Continuing cost pressures in Tier I Mumbai, Bangalore, Delhi and Tier II Hyderabad, Chennai, Pune has generated a growth in infrastructure and commercial real estate in Tier III Chandigarh, Kolkata, Nagpur, Ahmedabad. Of these, Chandigarh and Ahmedabad offer best cost advantages whilst Kolkata has the largest availability of Grade-A office space developed by Tier I city developers, DLF and Unitech, who have set up operations in the east. With multi-nationals expanding and setting up back-processing units in smaller cities, the BPO boom has begun to reach Tier II and III cities. And, a 300-million middle class providing impetus to the country’s economy, developers are busy identifying prime real estate to turn into quality housing, develop retail, leisure and hospitality othese, Chandigarh and

Ahmedabad offer best cost advantages whilst Kolkata has the largest availability of Grade-A office space developed by Tier I city developers, DLF and Unitech, who have set up operations in the east. With multi-nationals expanding and setting up back-processing units in smaller cities, the BPO boom has begun to reach Tier II and III cities. And, a 300-million middle class providing impetus to the country’s economy, developers are busy identifying prime real estate to turn into quality housing, develop retail, leisure and hospitality options for Tier II and II city dwellers.

Hot IT destinations in the making, Tier III Chandigarh, Visakhapatnam, Coimbatore, Kochi and Jaipur have begun to attract big names in the IT sector. Already, Infosys, a billionaire club company has acquired 5-million sq. ft. of real estate in Chandigarh, Le Corbusier’s magnum opus for building an IT campus. GE has zeroed in on Jaipur’s closeness to Gurgaon, Mumbai’s Krishna Group of Industries has snapped up Nagpur’s historic Empress Mills for Rs. 300-crore for developing into an IT Park, luxury housing, 5-star hotel and shopping mall. IT majors, Cognizant, Dell, IBM, Satyam and Mphasis have big plans for Chandigarh, Coimbatore, Vizag, and Mangalore. Already, TCS and Wipro have bought land in Kochi, Vizag and Thiruvananthapuram. Honeywell is expanding operations to Madurai; Satyam is in the midst of setting up a 50-acre campus in Vizag and a 7-acres tech centre in Thotlakonda on its outskirts. Mphasis has invested Rs. 70-crore in a BPO unit in Mangalore.

Small wonder, Trammel Crow Meghraj, a joint venture between Meghraj Properties UK and Trammel Crow US has launched a real estate development fund that focuses on Tier II and III cities of India.

The next hot IT hubs, Tier II and III Chandigarh, Ahmedabad, Nagpur, Jaipur and Kolkata are giving the Tier I Mumbai, Bangalore and Delhi a run for their money!

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