Leading real estate hotspots in India- JLL Report

A recent report released by Jones Lang LaSalle India and the Confederation of Indian Industry lists out eight hot real estate destinations across India which are likely to be supported by excellent infrastructural development.

The report named ‘Emerging Investment Hotspots – €”Mining Opportunities From the Complex Real Estate Terrain of India’ was released at the Confederation of Indian Industry (CII) Real Estate Conclave in Mumbai on Friday.

The eight destinations selected by JLL and CII are observed to be either emerging or growing sub-markets of India. Thane and Navi Mumbai have been listed as “emerging investment hotspots” among others which include Noida and Greater Noida in the National Capital Region, Whitefield in Bangalore, Southern suburbs of Chennai, Viman Nagar and Nagar Road in Pune, Gachibowli in Hyderabad and Rajarhat in Kolkata.

According to JLL India, the locations offer many real estate investment options with their relatively lower price levels providing incentives for future capital appreciation and good return on investment (ROI) while many other popular city-centric locations do not have much to offer in terms of development or meaningful price appreciation.

Since the present real estate market is very uncertain, €œreturns through capital appreciation and security of the invested capital are of major concern to investors. So the main concern is, where to invest? The JLL and CII report suggests answer to this question.

Noida and Greater Noida

The number of new residential project launches continues to remain stronger in Noida and Greater Noida due to affordability of property prices and excellent connectivity. Market experts assume that there may be an oversupply situation because of increasing supply of standalone office projects in near future as the demand would get limited.

The average rate per sq ft for residential properties in Noida is Rs 3,900 to Rs 4,100 while it is around Rs 3200 – Rs 3400 in Greater Noida. Noida is preferred mostly by high-ticket investors while Greater Noida is known as a market for low-ticket investors. A large number of 2BHK and 3BHK economy apartments are being developed in Greater Noida.

Many projects have been proposed to improve the infrastructure and connectivity of Greater Noida, which is further boosting the real estate demand. The proposed Ghaziabad-Greater Noida link road that will connect the active Zeta sector in Greater Noida with the Vijay Nagar Bypass on NH-24. Noida-Greater Noida real estate sector is expected to cheer up as the expansion of Metro line to Greater Noida has also been approved.

Navi Mumbai

Navi Mumbai is a favourite destination for real estate investment for buyers belonging to all income groups. The mid- and upper mid-income group buyers opt to buy properties in well-established localities like Vashi, Belapur and Nerul, the lower mid-income population opt for newly emerging localities like Ulwe, Turbhe and Kamothe.

Investment activities are higher at these emerging locations compared with the established ones as they offer properties in much affordable segment. Land availability, improving connectivity and wide range of pricing of properties attracts investments in Navi Mumbai. The price range of properties in Navi Mumbai currently range from Rs 4,000 to Rs 14,000. The region is developing in a planned manner and the completion of proposed infrastructural projects would solve the problem of internal commuting.

Thane

With rising demand for real estate projects, Thane is likely to emerge as a prime business district where rental and capital values are expected to increase by almost 50 percent in the next five years.

The average property price in this area ranges from Rs 6,000 to Rs 10,000 per sq. ft. The price of residential properties in Thane has increased by 10-15 percent in the past one year, but is still affordable. The region witnessed tremendous development in the last two decades. It changed from an industrial zone to a commercial one with strong IT and Information Technology Enabled Services presence. The large-scale working population is also a major driving factor for the realty growth in Thane. Thane has large layouts and open spaces and it is the fastest growing city in the MMR. It is becoming one of the most-sought after residential and commercial destinations in India.

As per the JLL and CII report, Thane offers housing projects for buyers belonging to high-income and middle-income groups. Several investors are showing interest in Thane property market as it offers good infrastructure and connectivity. While the residential property prices have surged in past few years, it is expected to continue northward movement along with a healthy demand.

Southern suburbs of Chennai

Some of the areas located in Chennai, including corridors along the Great Southern Trunk (GST) Road, Old Mahabalipuram Road (OMR) and East Coast Road (ECR), have been seeing fast-track growth in terms of real estate and infrastructure over the recent years. The growth in IT/ITeS sector has paved way for the allround development of these areas.

A steady supply-absorption trend has been exhibited by the residential sector of Chennai over the past three years. The same trend is likely to continue even in the fiscal of 2013. The housing demand of Chennai is being lead by South Chennai due to the growing presence of IT and BFSI companies.

On an average, the property prices in southern parts of Chennai varies between Rs 4,000 to Rs 5,000 per sq ft. A number of large-scale residential townships from both national and local developers have come up in this region.

€œExisting physical and social infrastructure along the GST Road coupled with ongoing and proposed infrastructure projects are likely to rise the property values in GST Road. Localities like Keelkattalai, Pallikaranai, Medavakkam, Chitlapakkam, Selaiyur, etc which are located between OMR and GST Road are likely to witness rapid capital appreciation in the coming years, states the report.

Whitefield

The demand for properties in and around Whitefield is increasing because of its connectivity, proximity to IT hubs and workplaces and good social infrastructure. The proposed metro connectivity is further boosting the demand in this area. It is among the most-preferred residential suburbs of Bangalore, specially for the mid-income and upper mid-income population.

The growing demand for office spaces in Whitefield shows that the demand for housing from the IT/ITeS employees is likely to increase. Consequently, the submarket will see appreciation in rentals and capital values.

The properties located in sophisticated localities of Whitefield are having capital values in the range of Rs 4000 to Rs 6000 per sq ft. There are a lot of projects which are expected to be completed in 2013 and there would be a huge inventory of ready to occupy residential units in the market by the year end.

Viman Nagar

Viman Nagar in Pune has been witnessing increasing real estate growth due to the IT-related developments in surrounding areas such as Magarpatta, Hadapsar and Kharadi. With affordable property prices, good road connectivity, established social infrastructure and proximity to IT/ITeS office space, this location has attracted different classes of buyers.

The average rate per sq ft of residential properties in Viman Nagar is around Rs 6,000 to Rs 6,800. Being located in close proximity to the Pune international airport, Viman nagar offers high investment potential. Easy accessibility to major business hubs such as Hadapsar and Kharadi makes its one of the most sought after destination for home buyers.

Gachibowli

Gachibowli, housing many IT companies and SEZs, is considered to be the next big hotspot of Hyderabad as Hitec City is slowly getting saturated. Residential prices here are expected to increase high in the coming days.

The average rate per sq ft in Gachibowli is around Rs 3300 to Rs 3700. The area has good social infrastructure which attracts home buyers.

Rajarhat

Rajarhat is a sprawling township along the eastern perimeter of Kolkata. It has been witnessing an upswing in both commercial and residential real estate. The land and property prices in Rajarhat is increasing every year and it is a very good place to invest in.

The property prices in rajarhat typically ranges between Rs 3,000 and Rs 5,000 per sq ft. The area offers a wide range of properties, from affordable homes to luxury villas. It is attracting investors from overseas too. The infrastructure development in Rajarhat is expected to further improve its investment potential eventually.