According to a Colliers report, 17 high-potential cities, including Ayodhya, Varanasi, Puri, Dwarka, Shirdi, Tirupati, and Amritsar, will experience rapid real estate growth in the upcoming years due to government policy and infrastructure development in spiritual towns.
Spiritual tourism is predicted to contribute significantly to the growth of several temple towns in India. According to the report, long-term organized real estate players may be drawn to these spiritual destinations by improved roads, flagship trains, and new airports that provide improved connectivity and infrastructure. This is especially true for the hospitality and retail sectors.
Real estate consultant Colliers India has identified thirty potentially high-growth cities from 100 cities, where real estate development is anticipated to accelerate over the next five to six years. According to Equitable Growth and Emerging Real Estate Hotspots, 17 of these 30 high-potential cities will soon experience accelerated real estate development across or more asset classes.
According to the consultant, identifying high-impact locations for spiritual tourism required analyzing several factors, such as authorized allotments under different government programs, yearly visitor traffic at major pilgrimage sites, future real estate developer plans, and land price growth.
The distribution of these 17 high-impact emerging real estate hotspots across the nation’s Northern, Southern, Western, Eastern, and Central regions demonstrates equitable growth. The consultant’s list of cities includes the following in North India: Amritsar, Ayodhya, Jaipur, Kanpur, Lucknow, and Varanasi; Patna and Puri in East India; Dwarka, Nagpur, Shirdi, and Surat in West India; Coimbatore, Kochi, Tirupati, and Visakhapatnam in South India; and Indore in Central India.
In terms of growth spurred by spiritual tourism, Amritsar, Ayodhya, Dwarka, Puri, Shirdi, Tirupati, and Varanasi came out as cities to watch for, according to the consultant.
In addition to its eight megacities, India is predicted to have almost 100 cities with a population of one million or more by 2050. As per the report, significant factors such as infrastructure development, digitization, tourism, and office landscape changes will propel the next wave of urban growth in these locations.
“Affordable real estate, skilled labor, better infrastructure, and government initiatives are propelling smaller towns to become dynamic contributors to India’s economy. The real estate industry is expected to grow to $ 1 trillion by 2023 and possibly $5 trillion by 2050, accounting for 14-16% of the GDP.
According to him, there will also be a lot of activity in these new real estate hotspots for alternative asset classes like data centers, senior housing, and second homes.
Companies use the hub-and-spoke model more frequently due to the growing popularity of hybrid working, setting up satellite offices in smaller towns. Colliers identified the high-impact locations by conducting a thorough analysis that considered several factors, such as the start-up ecosystem and current state of technology, the availability of skilled labor planned and current infrastructure upgrades, and the locations’ closeness to established office markets.
Among other places, Coimbatore, Indore, and Kochi were identified as having a lot of potential as satellite office markets.
The office and residential markets in smaller cities are about to undergo an enormous shift as tech giants and creative start-ups take advantage of the highly qualified workforce that emerges in these emerging hubs. Companies and employees benefit from office rental arbitrage, which is usually 20-30% cheaper than the housing market in these areas, according to Vimal Nadar, senior director and head of research at Colliers India.
Leading real estate developers are expected to become interested in these markets due to the rise in demand, which will bring a flood of high-quality supply. He continued, “Moreover, the emergence of flexible spaces in these hubs will effectively close the gap between supply and demand for premium office spaces, promoting a new era of growth and opportunity.”