Tier II cities – Next best place for realty investment

Many tier II cities in India are no lesser than tier I cities in terms of giving good returns on real estate investment. For people who have low-ticket size investments and cannot afford to buy property in the major cities, tier II cities are a preferable choice.

Cities like Lucknow, Chandigarh, Bhopal, Jaipur, Kochi, Indore, Coimbatore, Mysore, Raipur, etc. are being considered as potential residential hubs for realty investments.

These cities have been witnessing significant growth and appreciation in terms of capital values of properties. For instance, Raipur has witnessed around 50 to 70 percent appreciation in property values in the past three years.

Who are investing in tier II cities?

Residents as well as non-residents are showing interest in making investments in tier- II cities. Owing to growing urbanization and rising income levels with people, there is an increase in real estate demand in tier- II cities. Apartment culture is growing in these cities, for which many people are buying housing units in townships and gated communities as their second home.

Which factors are driving growth?

Improved connectivity, better facilities, lower population density, employment opportunities, developing infrastructure and social infrastructure are the factors driving growth in real estate in tier II cities. Affordable price factor and rising appreciation in terms of capital value of properties located in tier II cities is the major attraction. The approximate range of price per sq ft of properties in tier II cities is around Rs 2,500 to 4,500 per sq ft.

Residential projects in tier II cities

Several leading real estate developers including DLF, Omaxe, Supertech, Sobha Developers, Ireo, Ansal, Parsvnath, Amrapali, are coming up with projects in tier II cities. DLF has recently launched ‘My Pad’ a studio apartment project in Lucknow and has announced another project named Garden City, on NH-24B, Lucknow.

DLF has come up with Hyde Park, a luxury township project in Chandigarh. ATS Golf Meadows, Wave Estate, Ireo Rise, Ansal Victoria Floors, and several other projects being developed in Chandigarh.

Zuari Garden City, Nice Vistas, Green Valley Township, etc are some of the new projects coming up in Mysore. Spring Valley Dew, Ganpati Pearl, Seac City, etc are coming up in Bhopal. Floral City, Lotus City, The Park Green, Sai City, etc. are some of the projects coming up in Raipur.

Other developments in Tier II cities

Not only the residential segment but also the commercial and retail development is picking up speed in tier II cities. Some cities are also witnessing industrial developments, which is also dependent on many other factors like suitable location, labour availability, green belt area, etc. However, growing population in any city is the main contributor to the growth in all sectors.

Renowned developer, Omaxe Group along with the Intercontinental Hotel Group has planned to build a five star hotel in its integrated township ‘Omaxe New’ in Chandigarh.