After the dramatic change in fortune of the Indian real estate industry, investments in properties in popular cities have been on the rise. Property prices in investment destinations such as Noida & Gurugram have been steadily rising.
Away from the spotlight, there are cities with fast growth and immense potential for the real estate market. A recent report by Colliers, titled “Equitable Growth and Emerging Real Estate Hotspots“, has identified specific cities that are set to become key players in the nation’s real estate landscape over the next 5-6 years.
The report highlights 30 high-potential cities out of an evaluated 100+ that are primed for substantial real estate development across multiple asset classes, including office, residential, warehousing, retail, hospitality, and alternative sectors such as data centers, senior living, and second homes. Among these, 17 cities are expected to see significant traction across three or more asset classes, reflecting their growing importance in the Indian real estate market.
| Top 17 Cities in Emerging Real Estate Hotspots |
|---|
| North | Amritsar, Ayodhya, Jaipur, Kanpur, Lucknow, Varanasi |
| East | Patna, Puri |
| West | Dwarka, Nagpur, Shirdi, Surat |
| South | Coimbatore, Kochi, Tirupati, Visakhapatnam |
| Central | Indore |
| Top 17 Cities with High Impact Segments |
|---|
| City | Office | Residential | Warehousing | Retail | Hospitality | Senior Living | Data Center | |
|---|---|---|---|---|---|---|---|---|
| 1 | Amritsar | ✔ | ✔ | ✔ | ✔ | |||
| 2 | Ayodhya | ✔ | ✔ | ✔ | ✔ | |||
| 3 | Coimbatore | ✔ | ✔ | ✔ | ||||
| 4 | Dwarka | ✔ | ✔ | ✔ | ✔ | |||
| 5 | Indore | ✔ | ✔ | ✔ | ||||
| 6 | Jaipur | ✔ | ✔ | ✔ | ✔ | |||
| 7 | Kanpur | ✔ | ✔ | ✔ | ||||
| 8 | Kochi | ✔ | ✔ | ✔ | ||||
| 9 | Lucknow | ✔ | ✔ | ✔ | ||||
| 10 | Nagpur | ✔ | ✔ | ✔ | ||||
| 11 | Patna | ✔ | ✔ | ✔ | ||||
| 12 | Puri | ✔ | ✔ | ✔ | ✔ | |||
| 13 | Shirdi | ✔ | ✔ | ✔ | ✔ | |||
| 14 | Surat | ✔ | ✔ | ✔ | ✔ | |||
| 15 | Tirupati | ✔ | ✔ | ✔ | ✔ | |||
| 16 | Varanasi | ✔ | ✔ | ✔ | ✔ | |||
| 17 | Visakhap-atnam | ✔ | ✔ | ✔ | ✔ |
Key Emerging Real Estate Hotspots in India
1. Coimbatore
- Region: South India
- Asset Classes: Office, Residential, Warehousing
- Highlights: Coimbatore is emerging as a significant hub for satellite offices, driven by its strong industrial base, availability of skilled labor, and improving infrastructure. The city’s affordability and connectivity make it an attractive location for both residential and commercial real estate development.
2. Indore
- Region: Central India
- Asset Classes: Office, Residential, Retail
- Highlights: Indore, often referred to as the commercial capital of Madhya Pradesh, is witnessing rapid urbanization. The city’s strategic location, coupled with government initiatives, is boosting demand for office spaces and residential projects. Indore’s growing retail sector also reflects its expanding consumer base.
3. Kochi
- Region: South India
- Asset Classes: Office, Residential, Hospitality
- Highlights: Kochi’s strategic coastal location and burgeoning IT sector are making it a hotspot for office and residential developments. The city’s rich cultural heritage and growing tourism industry are also driving growth in the hospitality sector.
4. Jaipur
- Region: North India
- Asset Classes: Data Centers, Residential, Retail
- Highlights: Jaipur is increasingly becoming a hub for data centers, driven by rising digitization and its central location. The city’s vibrant culture and growing population are spurring demand in the residential and retail sectors, making it a key emerging market.
5. Kanpur
- Region: North India
- Asset Classes: Warehousing, Residential, Retail
- Highlights: As an industrial powerhouse, Kanpur is attracting significant real estate investments in warehousing, driven by its robust manufacturing sector. The city is also seeing growth in residential projects and retail developments, catering to its expanding population.
6. Lucknow
- Region: North India
- Asset Classes: Residential, Retail, Data Centers
- Highlights: The capital of Uttar Pradesh, Lucknow is emerging as a key city for residential and retail growth. The city’s expanding infrastructure and increasing digital penetration are also making it an attractive location for data centers.
7. Nagpur
- Region: Central India
- Asset Classes: Warehousing, Residential, Office
- Highlights: Nagpur’s strategic location as a central logistics hub is driving growth in warehousing and industrial real estate. The city’s residential and office markets are also expanding, supported by ongoing infrastructure projects.
8. Patna
- Region: East India
- Asset Classes: Residential, Retail, Hospitality
- Highlights: Patna, the capital of Bihar, is seeing increased real estate activity in residential and retail sectors, fueled by the city’s growing population and economic importance. The hospitality sector is also on the rise, driven by both business and tourism.
9. Surat
- Region: West India
- Asset Classes: Residential, Office, Warehousing
- Highlights: Known for its diamond and textile industries, Surat is expanding its real estate footprint across residential and office spaces. The city’s growing warehousing sector is also benefiting from its strong industrial base and improving logistics infrastructure.
10. Visakhapatnam
- Region: South India
- Asset Classes: Residential, Office, Hospitality
- Highlights: Visakhapatnam, a key port city, is emerging as a significant real estate market, with growing demand in residential, office, and hospitality sectors. The city’s strategic coastal location and industrial growth are key drivers of this expansion.
Factors Driving Growth in These Cities
Infrastructure Development: The ongoing infrastructure projects under the National Infrastructure Pipeline (NIP) and PM GatiShakti initiative are pivotal in enhancing connectivity and supporting the expansion of growth centers beyond Tier I cities. This development is particularly influential in boosting real estate activity in warehousing and residential sectors across these emerging cities.
Digitization: Increased digital penetration is another significant factor, particularly in cities like Jaipur, Lucknow, and Kanpur, where the demand for data centers and smart infrastructure is on the rise. The growth of e-commerce is also fueling the need for warehousing and distribution centers in these locations.
Evolving Work Models: The adoption of hybrid working models has led companies to establish satellite offices in cities like Coimbatore, Indore, and Kochi. These cities are becoming attractive alternatives to larger metropolitan areas due to lower office rental costs and more affordable housing options.
Spiritual Tourism: Cities like Varanasi, Tirupati, and Puri are benefiting from the rise in spiritual tourism, with infrastructure improvements and government initiatives driving growth in the hospitality and retail sectors.
As India continues its urbanization journey, these emerging cities are set to become key players in the nation’s real estate market. With growth expected across multiple asset classes, these cities offer significant opportunities for real estate investors and developers, paving the way for a more equitable and diversified growth landscape in India.