Mumbai, June 25, 2007
The Times of India
If you are unable to invest in real estate at the prevailing steep rates in the metros, a good idea would to look at properties in smaller towns and cities which are still at a nascent stage of witnessing a realty boom of sorts.

After reaching dizzying heights in metros like Mumbai, the real estate action is gradually shifting to upcoming smaller towns and cities. Guwahati, Nagpur, Bhuvaneswar, Ludhiana, Surat, Kochi, Indore, Vishakhapatnam, Mysore, Coimbatore, to name a few, have been described as "emerging centres of growth" which are now lending sparkle to India's booming economy.

These emerging growth centres are characterised by low real estate costs, availability of land for development and untapped manpower pool. "Anticipating the latent demand in these markets, a number of real estate developers and retailers have chalked out expansive plans to harness the opportunity," states a Knight Frank report.

This has also attracted the likes of Hiranandani group, Godrej Properties, DLF and Parsvanath to look at tier-II and tier-III towns where they could get their future growth from. As an industry observer said, the rate at Mangalore's City Centre, a prime locality, is just around Rs 2,200 per sq ft., while most of suburban Mumbai seems to be way beyond that.

What is also driving this transformation, according to Knight Frank, are a number micro and macro factors such as sustaining GDP growth, expanding service sector, rising purchasing power and affluence.

Realty is spreading its tentacles to the smaller towns on the back of the Indian IT/ITES sector which is scaling up its operations by exploring these towns in a bid to stay globally competitive. "Rising manpower and real estate costs, plaguing attrition levels and very often risk mitigation have been the key reasons for this movement," the report points out. Considering that IT/ITES contributes nearly 80 percent of total office space, this sector has been the main demand driver in these cities.
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