Lower Costs, Infrastructure Development, and Untapped Markets Drive Surge in Investments
In response to the burgeoning demand for affordable housing and commercial spaces, real estate developers are increasingly turning their attention to Tier-II and Tier-III cities across India. The lure of bargain land deals, coupled with untapped growth potential and government initiatives aimed at improving connectivity, is reshaping the landscape of real estate investment.
IndiaLand Group, a Mumbai-based real estate firm, announced plans to inject approximately Rs 700 crore into the sector over the next few years, with an initial investment of Rs 200 crore earmarked for this year alone. According to Harish Fabiani, chairman of IndiaLand Group, the rapid development of infrastructure in Tier-II cities is attracting both businesses and settlers, making these regions prime targets for investment.
Similarly, Bengaluru-based BCD Group has experienced significant demand in Tier-II cities like Raipur and Lucknow, witnessing a remarkable 60% revenue growth in 2023, particularly in plotted sales. Tejas Patil, founder of Arbour Investments, highlighted the advantages of investing in Tier-II and Tier-III cities, including streamlined infrastructure planning, cost-efficiency, robust rental yields, and enhanced connectivity.
Guardians Real Estate Advisory emphasized the untapped demand in these regions, presenting significant opportunities for developers to expand their market presence. Ram Naik, director of The Guardians Real Estate Advisory, pointed out that lower land costs, coupled with burgeoning infrastructure and rising urbanization rates, make Tier-II and Tier-III cities attractive investment destinations.
Anant Raj, while primarily focusing on the Delhi-National Capital Region, has ventured into providing quality accommodation for industrial workers in cities like Neemrana, Rajasthan, and Tirupati, Andhra Pradesh. Aman Sarin, CEO of Anant Raj, highlighted their commitment to enhancing the living conditions of factory workers through affordable housing projects.
Looking ahead, the World Trade Centers Association (WTCA) foresees its future expansion in India primarily targeting Tier-II and Tier-III markets. Scott Wang, vice-president of Asia-Pacific at WTCA, expressed confidence in India’s real estate market’s sustained growth, expecting a significant increase in membership and investment in the coming years.
In summary, real estate developers are betting big on Tier-II and Tier-III cities, drawn by the promise of lower costs, infrastructure development, and untapped market potential. As investments pour into these regions, they are poised to witness significant growth and transformation in the years to come.
