10 New Smart Cities in The Making

Transcription

1 10 New Smart Cities in The Making

2 The recently-elected Modi government has brought a new ray of hope to the dwindling realty sector in India. The ruling party's manifesto talks about creating 100 new smart cities in the country to bring back the country s economy on growth track. This is backed by one of their strongest methodology - Infrastructure. It is believed that various infrastructure projects will now be expedited under the Modi government, which in turn will play a major role in boosting real estate growth in many cities across the country. For instance, mega infrastructure projects such as the Delhi-Mumbai Industrial Corridor (DMIC) is likely to be expedited. Once completed, the growth of real estate at India s hinterlands that will be connected by these corridors will be exponential. Ghaziabad, Bhiwadi, Ahmedabad, Indore and Nashik are few cities that will benefit tremendously with the DMIC project. Similarly, metro projects in cities such as Jaipur, Lucknow and Kochi will also give a major fillip to the real estate growth. Vadodara and Vijaywada are two destinations where political activity is likely to push real estate growth. With the formation of the new state Seemandhara, Vijaywada is likely to gain momentum in real estate activity as it is a front runner for the state capital. Here are 10 smart cities we think are in the making, according to the data collected from CommonFloor. Ghaziabad Ghaziabad is strategically located at a distance of only 19 km east of Delhi. The city provides a decongestion option for Delhiites. It also has far more affordable options in property as compared to the national capital. There are several infrastructure and industrial projects that will boost the realty sector of the city. The proposed Metro links from Dilshad Garden to New Bus Stand, Noida Sector 62 extension to Indirapuram extending up to Vaishali, and the extension of Yamuna Vihar metro link up to Loni will give a big boost to the connectivity. The Faridabad-Noida-Ghaziabad (FNG) Expressway connecting Ghaziabad with Noida will add to the appeal of the city. The Eastern Freight Corridor from West Bengal and Jharkhand to Punjab passes through Ghaziabad, which is important for the city. There are two industrial zones identified in UP, spreading over 1,483 km along DMIC. These include Meerut-Muzaffarnagar industrial area and Dadri-Noida- Ghaziabad Investment Region. All these major projects are expected to give a major push to the realty sector in the city in the coming months considering the fact that the DMIC project may be expedited under the Modi regime. There are few other road projects such as Northern Peripheral Road (NPR), Hindon Elevated Road and widening of NH-24 from UP Gate to Dasna are expected to ease traffic congestion in the city, while giving a boost to the real estate. Ghaziabad also offers all the basic amenities and social infrastructure required for an urban living hospitals, schools, colleges, shopping places, banks, green belts and parks, etc.

3 With proper infrastructure in place the city is bound to grow in the times to come. FNG Expressway Eastern Freight Corridor Metro extension Northern Peripheral Road (NPR) Hindon Elevated Road Meerut-Muzaffarnagar industrial area Dadri-Noida-Ghaziabad investment Region Bhiwadi Bhiwadi is less than 25 kilometres from Manesar, an emerging industrial and real estate hub adjoining Gurgaon, which has brought the attention of investors and buyers on this bustling township. Projects such as NH-8 (Delhi-Jaipur highway), NH-71B and the proposed Neemrana airport in the vicinity of Bhiwadi are expected to give a boost to the realty sector in the city. Various other factors such as industries, SEZs and road infrastructure will also contribute to the growth of realty sector in the city. This area will also be connected with the upcoming Kundli-Manesar-Palwal (KMP) Expressway which is a future connectivity project promised in 2021 Gurgaon- Manesar Master Plan. There is also a proposed regional rapid transit system (RRTS) from Delhi to Alwar (180 km). Bhiwadi is an important emerging industrial area with industries such as steel, electronics, furnace, engineering, textiles, printing, pharmaceuticals, cables, food processing and rolling mills. The major attraction of this region is Tapukara Industrial Area, located on the Bhiwadi-Alwar Road. A number of SEZs are coming up in and around Bhiwadi by RIICO and DMIC. Experts believe that in the next five years, there will be more than 50,000 people who will migrate to the city for jobs. Khushkhera-Bhiwadi-Neemrana region, an integrated industrial township is being developed under the DMIC corridor and western freight corridor project; housing a world class knowledge city with support infrastructure and residential, commercial and industrial zones.

4 The city also has all basic amenities like piped water, schools, transportation, hospitals, telecom networks, banks, etc. Moreover, it does not experience any water shortage. When compared to other areas of the NCR, prices in Bhiwadi are still reasonable. Bhiwadi and Dharuhera have emerged as credible alternatives to Gurgaon in terms of affordable housing, industrial areas and real estate growth. Delhi-Jaipur Highway National Highway (NH)71B Neemrana Airport KMP Expressway Regional Rapid Transit System Khushkhera-Bhiwadi-Neemrana region Ahmedabad Ahmedabad realty is considered one of the next biggest real estate markets after tier-i cities. The main reasons for this include rapid industrialisation in the city and infrastructure development. One of the key contributors to the infrastructure is the Bus Rapid Transit System (BRTS), which has improved the overall connectivity in Ahmedabad. This has in turn provided boost to the real estate market here. Moreover, the city has ample employment opportunities, excellent connectivity and social and civic infrastructure and most importantly, capital values here are lower than those of many Tier-I cities. Ahmedabad is a major growth corridor. Several expressways pass through the city such as National Highways 8, 8A, 8B, 8C, all part of the DMIC. Experts believe that once this corridor is complete, the city's realty sector will get a major boost. Apart from these national highways, there are several key state highways such as Sanand-Sarkhej Road that also pass through the city. These highways have paved the way for SMEs to flourish along the highways. One such expressway is the Ahmedabad-Vadodara Expressway that connects the two vibrant economies in Gujarat: Ahmedabad and Vadodara. No other expressway in Gujarat is as strategically positioned as this highway. The expressway has reduced travel time between Ahmedabad and Vadodara as well as all the important cities of Gujarat. These have led to the flourishing of big

5 ticket corporate houses along this stretch contributing to the region s growth and in turn the realty sector. The under-construction Gujarat International Finance Tec-City (GIFT) - a global finance hub which is located about 12 km from Ahmedabad International Airport, aspires to cater to India s large financial services potential by offering global firms a world-class infrastructure and facilities. It aims to attract the top talent in the country by providing the finest quality of life all with integrated townships, IFSC and multi-speciality SEZ. GIFT is expected to provide Rs 10 lakh direct and indirect number of jobs by This requires 62 million sq. ft of real estate office and residential space. National Highway (NH) 8, 8A, 8B, 8C Delhi Mumbai Industrial Corridor (DMIC) Ahmedabad-Vadodara Expressway Gujarat International Finance Tec-city (GIFT) Indore Indore is another city where real estate growth is likely to gain momentum in the coming months. The real estate market has got a major boost in the last months, thanks to the much hyped Super Corridor. Indore Development Authority s (IDA) new project Super Corridor, stretches a 12 km distance from the airport to the Vijay Square and has been in the news off late. The corridor is registering growth in various areas, adding a new phase in the real estate landscape of the city. Furthermore, the localities around the Super Corridor have transformed into a hub for real estate development. The location of the corridor has emerged as the biggest unique selling point of the city, since the roads to the airport, the new proposed railway station, sports complex, Interstate Bus terminus (ISBT) and medical hub have turned hasslefree. This has also led to an influx of IT giants such as Infosys and TCS acquiring huge pieces of lands to develop their SEZs. There are also several manufacturing plants coming up in the city. Rise of property rates in Indore can be attributed to the growth of this Super Corridor. There are some major proposed infrastructural developments such as

6 sports complex, medical hub and educational campuses. All these factors have led to a growth in demand for high-end units near the corridor. Going by the market reports, areas near the corridor have already witnessed a sizeable increase in the average price range. Experts are of the notion that with more than 80,000 new job opportunities in the city in the coming months, the rental market in the localities along the corridor is also expected to gain momentum. Furthermore, the DMIC Investment Region lies about 25 km south-west of Indore which is expected to further boost the realty sector in the city. Super Corridor IT and manufacturing companies Delhi Mumbai Industrial Corridor (DMIC) Nashik In recent times, Nashik has emerged as a favourable second home destination for people living in Mumbai and Pune. The city has emerged as a good alternative among the buyers as it enjoys proximity to both Mumbai and Pune, and due to its pleasant climate. Moreover, the property values are less compared to either of these cities. Nashik lies on the intersection of Mumbai-Agra Highway (NH-3) and Nashik-Pune Highway (NH-50). There is a four lane state highway connecting the city to Aurangabad and Gujarat. The Mumbai Nashik Expressway connects the city to Mumbai. There are other major arterial roads and state highways in the city. One can reach Nashik from Mumbai and Pune within two hours and four hours respectively. Nashik has a very good public transportation system. Apart from the regular MSRTC buses, there are GSRTC, RSRTC and KSRTC buses that provide services between the city and Gujarat, Rajasthan and Karnataka respectively. The Greater Nasik Metro is a proposed metro railway project that will connect some of the important areas in the city. While connectivity and accessibility are major factors, Nashik s pleasant climate and the available amenities also drive sales. The city has good social amenities. Nashik is called the wine capital of India. There are several tourist destinations in and around the city. The Trimbakeshwar Shiva temple is close to the city. Unlike Mumbai, Nashik has more green cover and is definitely more peaceful. The city is considered a garbage dump-free city. The Kumbh Mela too takes place in the city once every 12 years.

7 More importantly, the ongoing DMIC project will influence the real estate market in the city in the near future. It will give rise to the demand of physical and social infrastructure facilities including residential and commercial real estate development. There are several manufacturing plants already present in the MIDC here including those of HAL, Bosch India, CEAT, and Mahindra and Mahindra. The Currency Note Press and Indian Security Press are located on Nashik Road. As a result of a growing connectivity, pleasant environment and employment and cheaper land rates, Nashik will witness rapid growth in real estate investments. National Highway (NH) 3, 50 Mumbai-Nashik Expressway Proposed Greater Nasik Metro Jaipur Unparalleled connectivity and round-the-clock infrastructure development are two undeniable parameters for growth and development in a city which stirs its real estate prices. Jaipur is no exception for this. With the advent of metro and BRTS, the Pink City has ranked itself as one of the hottest destinations of urban living in the country, riding high on road connectivity coupled with rail and air. The Jaipur Metro is expected to be operational by August As per real estate experts, the functioning of metro will turn the tables for this hot tourist destination and make it the second-fastest group town in India after Bangalore. Furthermore, connectivity to NH-8 and affordable real estate prices (compared to Gurgaon and Delhi) and upgrading of the Jaipur Airport to international standards will bring the city into spotlight as the rising star in real estate. Moreover, NH-11 (Bikaner to Agra) and NH-12 (Kota, Baran District) also pass through Jaipur district. The city already has a modern public transportation system Bus Rapid Transit Service (BRTS). All these factors are expected to boost real estate growth in the city in the coming months. Jaipur Metro Bus Rapid Transit System (BRTS)

8 National Highway (NH) 8, 11, 12 Lucknow Lucknow is another city where the proposed metro project is likely to give a major push to the realty sector. The three proposed corridors for metro rail service include: North corridor- Amausi to Munshipullia; Gomti Nagar link train to Indra Nagar tri-section and East corridor- Lucknow Railway station (Charbagh) to Vasant Kunj. There are four national highways originating in Lucknow viz., NH-24 to Delhi, NH-25 to Shivpuri and Jhansi, NH-28 to Mokama, Bihar and NH-58 to Varanasi. Apart from the metro, there is a proposal for a magnetic monorail between Kanpur and Lucknow. If this project is brought to reality, the monorail along with the metro will play a major role in decongesting the traffic in the city. The city of Nawabs also boasts of good social infrastructure and includes Lucknow University, KGMC Medical College, SGPGI and IIM-Lucknow. Further, there are many international schools and other private colleges in and around the city. Six-lane expressway has also been proposed from Agra to Lucknow via Mainpuri and Kannauj. Furthermore, the real estate market in Lucknow is driven by the bureaucrats, politicians, public/government servants, emerging IT/ITeS industry in the city due to good infrastructure, planned development in some localities, and good connectivity and original inhabitants of Lucknow who have now migrated outside. Metro rail National Highway (NH) 24, 25, 28 and 58 Kochi Kochi metro is a flagship project which is being undertaken by joint collaboration of both the state and the central government. The project is expected to be operational by 2016 and is likely to change the face of urban connectivity across the city. Once fully operational, the Kochi Metro is going to reduce travel time between Aluva and the key micro markets of the city by half. The first phase of the project is underway and the work is on track. This in turn, will impact the real estate sector in the city. The route has already started witnessing a positive cycle. Property prices are likely to peak by the time the metro project is completed.

9 The International Container Trans-shipment Terminal (ICTT) near Port Kochi and the integrated transit terminal of Vyttila Mobility Hub along with the Kochi Metro are other sure shot game changers as far as real estate pricing in the city is concerned. Since good urban connectivity is one of the most important factors when it comes to correlating realty prices, most real estate experts believe that the overall real estate across Kochi, including Fort Kochi is likely to give good returns in the times to come. Kochi Metro International Container Trans-shipment Terminal (ICTT) Integrated transit terminal Vadodara Another tier-ii city that is on the radar of rapid real estate growth is Vadodara in Gujarat. Various reasons can be attributed for its growth. This city has gained popularity in recent times as one of the constituencies of the present prime minister of India. Besides having political advantage, the city is an emerging IT hub. It also boasts of excellent infrastructure development. There are some major infrastructural developments planned in the city, coupled with the IT hubs and industrial areas, which shall lead to increased employment opportunities and improved connectivity to the city. The DMIC passes through Vadodara, making it a key destination for industrial investments. The Ring Road connects some of the major state highways and arterial roads of the city to DMIC. The Ahmedabad- Vadodara Expressway is a growth corridor that not only promises to reduce the commute time between these cities, but also promises good commercial growth along the highway. The city has accessibility via road, rail and air too. The Vadodara BRTS is currently being planned. Further, Vadodara is an emerging hub for various automobile ancillary units and glass manufacturing companies. Various towns are major centers of Pharmaceutical and other Chemical manufacturing industries. It is home to a large number of reputed large scale industries and public sector units (PSUs) such as Indian Petrochemicals Corporation Ltd (IPCL), ONGC, Gujarat Alkalies and Chemical Ltd (GACL), and Gas Authority of India Ltd (GAIL). Moreover, some of Gujarat s leading educational institutions are located in Vadodara. MS University, which is Gujarat's largest and most famous university is situated in Vadodara. The city has a good overall infrastructure as well. Some of

10 the famous landmarks also include Laxmi Vilas Palace, Kirti Stambh, and Baroda Museum & Picture Gallery. All these factors in turn will boost the real estate sector in the city in the times to come. The urban development authority of Vadodara is continuously encouraging many developers to establish residential areas, IT parks and shopping malls within the city. All these have attracted many NRIs to the city. The city promises a bright future not only for itself but also for those who intend to draw on the prospects of an emerging cosmopolitan. Delhi Mumbai Industrial Corridor Ring Road Ahmedabad-Vadodara Expressway Proposed Bus Rapid Transit System IT and other industrial establishments Vijayawada The recent formation of the 29 th state in India Telangana is likely to give a new boost to the real estate sector in Vijayawada. The city is one of the top contenders for the capital of Andhra Pradesh. As a result, this region holds immense potential for future development. Vijaywada is centrally located in the new state. Hence, it has good connectivity to other cities and towns in the state. The Vijayawada-Guntur belt is easily accessible from NH-5 and NH-9. In addition, what sets it apart from Visakhapatnam is the smooth railway connectivity. Through one of the largest railway stations in the country, Vijaywada enjoys excellent intra-city connectivity. Vijaywada is famous for its automobile industry and if developed as the capital city, it can emerge as a manufacturing and trading hub of the region. There is an IT park in the pipeline which will span across 32 acres in Kesarapalli and opposite to Gannavaram Airport. The district administration is also planning to construct a software park in the land belonging to the Government Polytechnic College and ITI. Some of the planned infrastructure projects in the city include building a high speed corridor between Hyderabad and Vijayawada. The NH-5 stretch between Guntur and Vijayawada is also being widened. There are flyovers that are built along NH-5 to ease the traffic. Social amenities include malls that are built along MG Road.

11 However, land acquisition would be a herculean task here. As per the Land Acquisition Bill, the land can only be acquired on the basis of the prevailing market value. Thus. arranging finance in short span of time would be very difficult. Since the land has to be acquired through farmers, there are chances of farmer protests like those that took place in Noida. Also, the property values have already started going upwards. Hyderabad-Vijayawada high speed corridor National Highway 5 widening Property values Property values in most of these cities have seen a good growth in the last one year. While some of the cities witnessed a minor dip in property values over a few quarters in the last year, the last 2-3 quarters have seen a good growth. The table below shows how the property values have fared in the last one year. Table i) Capital values in the 10 cities in Q1 of 2013 and 2014 Q Q Min (Rs per sq. ft) Max (Rs per sq. ft) Min (Rs per sq. ft) Max (Rs per sq. ft) Ghaziabad 2,900 5,400 3,100 6,300 Bhiwadi 2,300 2,500 2,500 2,800 Ahmedabad 2,000 6,100 1,800 6,000 Indore 1,900 2,700 1,900 2,900 Nashik 3,300 3,300 4,500 Jaipur 2,500 7,700 2,600 8,400 Lucknow 2,400 5,500 2,700 6,900 Kochi 3,200 4,300 3,400 4,700 Vadodara 2,600 4,000 1,800 4,100 Vijayawada 2,500 4,300 3,200 8,000 Source: Real insights by CommonFloor.com

12 From the Table i), it is visible that the average property price has grown across the various cities, which indicates a good supply and demand for residential units in these cities. The growth in infrastructure and housing units in these cities indicates that all these cities are currently on a good growth path and soon expected to become the next set of major metropolitan cities. Authors Karthik Kashyap Senior Research Associate karthik.k@commonfloor.com Bangalore Priyanka Kapoor Content Editor priyanka.kapoor@commonfloor.com Bangalore Meha Singla Manager Research meha.s@commonfloor.com Bangalore Disclaimer: The document above is written by the Domain Research Team at Commonfloor.com, India s fastest growing real estate website known for its unbiased prognosis in Real Estate sector. The information provided in this report is based on CommonFloor data which is collected from various publicly known sources viz, websites, documents and maps. It should be considered as a guideline and not in absolute certainty. While care has been taken for groundwork, no responsibility is accepted for the accuracy of whole or any part. This information is confidential and the sole property of CommonFloor.com. It should not be reproduced in any form, in part or whole, without prior permission.