For investors in the real estate sector in India, the most pertinent question is, “Where should I invest?”, while for end-user buyers it is, “Where should I buy today to profit in the future even if it would mean a short-term compromise on some comforts?”
In our recent research publication, “Emerging Investment Hotspots – Mining opportunities in the Complex Real Estate Terrain of India”, we attempted to answer the above questions. We highlighted a few investment hotspots across India and classified them as either emerging or growing sub-markets. A location/sub-market is categorised as a hotspot in a city when it emerges as a self-sustained ecosystem with development at all levels. Considering all aspects, we have identified eight sub-markets as investment hotspots across the top seven cities in India. Notable absentees in our selection are the city centres and established suburbs as they have already achieved near saturation levels in terms of development.
We have categorised these sub-markets as emerging hotspots on account of their economic activity, current infrastructure, and physical and social infrastructure growth, and it is these factors that have contributed towards a surge in real estate development. Based on existing and expected developments, we have constructed a four-stage matrix (refer to figure) to identify the investment potential of these sub-markets. Most of them are emerging locations – Noida in NCR, Thane and Navi Mumbai in Mumbai and Whitefield in Bangalore – and are at an early stage as they undergo growth in economic activity and infrastructural developments. All three are witnessing intensive development of the IT/ITES sector and consequently they are also witnessing improvement in connectivity by roads, expressways or metro rail. As a result, land acquisition and property values are on the rise.
Meanwhile, Viman Nagar and Nagar Road in Pune, Greater Noida in NCR, Rajarhat in Kolkata, Gachibowli in Hyderabad, and the Southern Suburbs of Chennai are in the emerging stages. They are experiencing increasing economic activity, infrastructural developments are in the initial stages and they are also being driven by IT/ITES development. Property prices are affordable and there is an abundance of land available for development.
Amidst the current economic conditions and complexities surrounding the real estate sector in India, these sub- markets, which may in the future become key markets, are likely to be relatively safe havens for investment. We expect them to enjoy meaningful price appreciation in the next few years as well as to be endowed with adequate infrastructure to make them sought after living locations.
