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Peripheral Locations High On Investment Opportunities
3 Oct, 2007, New Delhi
Hinjewadi and Manesar rank highest among the top 17 emerging corridors: C&W Report
According to the Cushman & Wakefield - GRI India Real Estate Investment Report 2007: ?India Gaining Momentum" released today, 17 new corridors emerge as strong investment destinations for investors with different risk appetites.
As India enters the next phase of real estate growth, the exploration of suburban and peripheral developments of major cities as cost saving and risk diversification measures is emerging as a vital initiator for analyzing the potential investment opportunity within these emerging corridors. Hinjewadi, Manesar GST and Sriperembudur, Shamshabad, Devanhalli, Greater Noida, Panvel and Virar, Rajarhat Thane (Mumbai), Kokapet (Hyderabad), Bidadi (Karnataka), Chakan, Kharadi (Pune) Bantala and Tumkur Road are the 17 corridors that reflect high investment potential.
Sanjay Dutt and Anurag Mathur, Deputy Managing Directors, Cushman & Wakefield India add, "Overburdened infrastructure, rising real estate and operational costs, limited availability of large land parcels, et al have driven corporates and developers, to seek alternate locations within their periphery. These emerging corridors are extensions of tier I and II cities that stand to gain from the existing talent pool and benefits from pre-planned infrastructure.?
The corridors are rated according to three broad parameters; Sustainability, Momentum and Economic Environment, on the basis of a multi variable analysis. The grading of the locations depicts the scale of opportunities within these emerging corridors, which would allow the investors to gauge their location preference according to their risk appetite
Locations that score high on sustainability exemplify the strength of their physical and social infrastructure, real estate development in the adjoining markets and the nature of economic activity present with the broader location. These corridors will have limited exposure to risk and will bring assured returns due to demand dynamics and readiness of infrastructure. Therefore, long term sustainable corridors would emerge as preferred choice for investment from the risk minimization perspective. Some of the corridors that rank high on this parameter include Hinjewadi (Pune) and Manesar (NCR), GST and Sriperembudur (Chennai), Shamshabad (Hyderabad), Greater Noida (NCR), Panvel and Virar (in and around Mumbai) and Devanahalli (Bangalore).
Momentum is an indicator of the pace and direction of the developmental activities along the corridor. There would be considerable strength of local and national players planning projects or venturing into these corridors. Higher score in this parameter reiterates the growth potential of the region, however entry barrier would be higher and a thorough analysis is required to create appropriate product positioning. GST and Sriperembudur (Chennai), Rajarhat (Kolkata), Bantala (Kolkata) and Shamshabad (Hyderabad) are some of the corridors that reflect high momentum within their regions.
A favourable economic environment reinforces the faith of local and foreign investors ascertaining the attractiveness of corridors namely Thane (Mumbai), Kokapet (Hyderabad), Bidadi (Bangalore), Chakan and Kharadi (Pune) etc. This is driven by the favourable government policies environment that would reduce entry barriers providing investors with ease of attaining clearances to expedite processes and the demographic profile of their catchments that would add to the strength of these locations.
According to the C&W report, Hinjewadi (Pune) and Manesar (NCR) emerge as the highest rankers on all parameters and are poised to be prominent locations with promising prospects due to relatively strengthened real estate dynamics and favourable policies. GST and Sriperembudur in Chennai and Shamshabad in Hyderabad also score high and offer similar investment potential and positive environment. Regions like Greater Noida in NCR, Panvel and Virar in and around Mumbai, which have performed moderately on momentum and high on sustainability as well as environment coming next in the ranking and thereby offer lucrative investment opportunity from a long term perspective. The locations that fall under moderate scale on all three parameters are Bantala, and Tumkur Road, however this would not restrain investments from a long term perspective.
Cushman & Wakefield
Cushman & Wakefield is the largest fully-integrated real estate services firm in the world.
Founded in 1917, it has 215 offices in 56 countries around the globe and 12,000 talented
professionals. Cushman & Wakefield is involved in every stage of the real estate process,
from strategy to execution. The firm represents clients in buying, selling, financing, leasing,
managing and valuing assets, and provides strategic planning and research, portfolio analysis,
site selection and space location services. Cushman & Wakefield commenced its India
operations in 1997 and today has grown to over 800 employees across our offices based in New
Delhi, Gurgaon, Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata. The first
international real estate service provider to have been granted permission by the Government of
India to operate a wholly-owned subsidiary, Cushman & Wakefield India is strategically
poised to service the varied needs of clients throughout the Indian sub-continent. It offers a
full range of real estate services combining local expertise and experience with technology and
standards of service that are well-established and consistent across all Cushman &
Wakefield's offices worldwide.
Global Real Estate Institute
The GRI is a global club of senior real estate investors, developers and lenders. Its mission
is to help its members build personal relationships and work together in creating better places
as a legacy to our children. Founded in 1998, its core constituency consists of the world's
leading real estate players. The GRI runs its activities through a series of Annual Meetings
focused on different regions of the world, mainly across Europe and Asia to date. Individual
and Corporate Membership of the GRI is open to senior players in the real estate industry that
find it beneficial to belong to a global community of elite achievers in their industry.
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