Knight Frank q1 2007 Emerging Growth Centres

Knight Frank Emerging Growth Centres - Quarter 1 2007
Research
Emerging Growth Centres

India • Quarter 1 2007
Contents
Editorial 2
Chandigarh 4
Ludhiana 6
Lucknow 8
Guwahati 10
Bhubaneswar 12
Jaipur 14
Ahmedabad 16
Surat 18
Nagpur 20
Indore 22
Goa 24
Visakapatinam 26
Mysore 28
Coimbatore 30
Kochi 32
Summing Up 34
02 Emerging Growth Centres - Quarter 1 2007 Knight Frank
Figure 1
GDP Growth Rate Editorial

10 The real estate action is no longer limited to the large metropolises of India but has now permeated to the
burgeoning smaller towns and cities. These emerging centres of growth are lending sparkle to India's
8
booming economy. What is leading this transformation?
The upswing of the Indian real estate sector has been an outcome of a number of positive micro and macro
6 factors. Consistent and sustaining GDP growth, expanding service sector, rising purchasing power and
Rate (%)
affluence, proactive and changing government policies have all lent momentum to this rapidly growing
sector.
4
Accounting for almost 80% of the total office space absorption, the Indian IT/ITES sector has been the
primary demand driver. India's low cost-high quality and productivity model has given it a leadership
2
position in the outsourcing arena. In a bid to scale up their operations and to remain globally competitive,
the Indian IT/ITES companies are exploring the smaller towns and cities. Rising manpower and real estate
0
costs, plaguing attrition levels and very often risk mitigation have been the key reasons for this movement.
2002
2003
2004
2005
2006
2007E
Positive economic growth has also translated in rising disposable incomes and growing aspiration levels
Source: CSO across India. Rising consumerism has created a demand for new retailing and entertainment avenues.
Realising that consumers across cities have similar needs, albeit the scale may vary, new age retailers are
vying to cash in on the first mover advantage and are expanding into hitherto unexplored smaller cities.
Advent of organised retailing has also translated into real estate growth in these emerging locations.
Growth of the Indian 'Rich' (annual income>USD 4,700) and 'Consuming' (annual income
USD 1,000-4,700) class coupled with falling interest rates and other fiscal incentives on home loans has
increased the affordability and the risk appetite of the average Indian consumer thereby leading to a
substantial rise in demand for housing. This has been further fueled by the increase in the size of 25-55 age
group of earning population and the emergence of double income, nuclear families. Over the last decade
the average age of Indian home loan borrower has reduced by 10 years.
Another variable facilitating real estate growth in India is the growing urbanisation. According to United
Nations Population Division, the urban population in India will continue to grow at a rate of 2.5%
per annum for the next two and a half decade. As per the Census of India 2001, 41% of the total
population of India will be living in urban areas by 2011. The number of cities with a population of one
million or more is also is expected to double from 35 recorded in 2001 to 70 by 2005. This increase in
population will generate incremental demand for housing and other real estate components.
All these factors together with increased liquidity in the real estate sector through the international real
estate funds and private equity funds will result in radically transforming the real estate landscape over the
Figure 2
next 3-5 years. India's investment scenario is already undergoing a sea change and has been seen to be
making roads in rural India with telecom, rural retailing, agricultural supply chain and logistics facilities,
Average Age of Indian Borrower
micro-credit, etc. All these factors foretell that the real estate growth will soon spread out of the established
50 boundaries.
However, to support this growth and to make it more expansive, a lot needs to be done. Foremost is the
40
thrust on infrastructure. According to a World Bank estimate, India needs to invest an additional 3-4% of its
GDP on infrastructure to sustain its current levels of growth and to spread the benefits of growth more
Average Age (in years)
30 widely. Some positive steps have already been taken in this direction. Huge investments in infrastructure to
the tune of $350 billion have been envisaged over the next five years. Connectivity may get a boost with
the completion of ~13,000 kms of roads under the Golden Quadrilateral, North-South-East-West (NSEW)
20
corridor and with 4-laning of all the major national highways. This will further facilitate the economic
development of smaller towns and cities in the country.
10
0
1995-99
2003-04
2005-09(pr.)
Source: Industry
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Knight Frank Emerging Growth Centres - Quarter 1 2007 03
Figure 3
Major real estate destinations of the country and some other emerging towns can be classified into three
Rate of Urbanisation (1971-2011) broad categories depending upon the stage of real estate development that each one of them is
undergoing.
50
45 Table 1
40
Category Cities Characteristics
35
Tier I Bangalore, Mumbai and NCR Fairly well established real estate market
30
Demand drivers quite pronounced
Rate(%)
25
20 Tier II Hyderabad, Chennai, Pune and Kolkata Growing real estate markets
Experiencing heightened demand and
15
investments
10
5 Tier III Chandigarh, Ludhiana, Lucknow, Real estate markets yet to establish
0 Guwahati, Bhubaneswar, Jaipur, Perceived to have substantial potential
Ahmedabad, Surat, Nagpur, demand
1971
1981
1991
2001
2011
Indore, Goa, Visakapatinam,

Year Mysore, Coimbatore, Kochi,
Vijaywada, Mangalore, Trivandrum
Source: Census of India, 2001
and Baroda
As the Indian real estate sector moves higher on the growth curve, a number of state capitals and smaller
cities which have relatively better infrastructure and are able to support higher economic growth have
come into limelight. These emerging growth centres are characterised by low real estate costs, availability
of land for development, untapped manpower pool and rising quality of life. Many of these towns have
industrial and tourism driven economic base that can be leveraged for growth. Anticipating the latent
demand in these markets, a number of real estate developers and retailers have chalked out expansive plans
to harness the opportunity.
Through this report, Knight Frank India endeavours to delve further into the growth dynamics of 15
locations in India that are experiencing a paradigm shift in their economic and real estate scenarios and can
be classified as the emerging growth centres of the country. We have also ranked these 15 cities according
to the relative attractiveness as an emerging centre on the basis of five key decision making parameters, viz.
Real Estate, People, Physical Infrastructure, Social Infrastructure and Business Environment.
Figure 4
Office Market Values Chandigarh

105 12,000
Overview
90 Chandigarh is the first planned city of India and is the capital of the two states of Punjab and Haryana.
10,000
Designed on neighbourhood principle, the city is divided into self sufficient sectors. The commercial
75
hierarchy in the city follows cluster shopping, neighbourhood centre, community centre, sub-city centre
Rs./sq.ft. per month
8,000
60
(Sector-34) and city centre (Sector-17). Residential sectors are divided on the basis of plot sizes. For
Rs./sq.ft.
6,000 commercial space, common format in the city is that of Shop-Cum-Office (SCO) complexes. Owing to the
45 excellent social infrastructure, quality human resource base, continuous green spaces, compact size and
4,000 conducive government policies, Chandigarh has become an attractive IT/ITES destination.
30
Originally, Chandigarh's regional boundaries were confined to a radius of 8 kms that gradually increased
2,000
15 to 40 kms, incorporating a number of settlements from Punjab, Haryana and Himachal Pradesh. Mohali,
Kharar, Panchkula, Manimajra, Zirakpur and Dera Bassi are the locations in Chandigarh metropolitan region,
0 0
which are developing rapidly. Liberal policies, economic reforms and considerable investments in the
Sector-9
Sector-17
Sector-22
city have tapped the skilled labor pool while generating more employment opportunities and inviting
in-migration.
Locations
Rental Values Capital Values
Source: Knight Frank Research
Dell facility, Mohali Quark City, Mohali
Current Scenario
The Chandigarh real estate market has witnessed unprecedented growth over the last few quarters. With
little scope left for further development within the main city, skyrocketing property prices and diluted
Figure 5
peripheral control act, intensive real estate development has taken place on the outskirts. Establishment of
Residential Market Capital Values Chandigarh Technology Park (CTP) in Manimajra north-east of Chandigarh and IT Park in Mohali has
8000 provided requisite space for the IT/ITES companies considering their expansion plans in Chandigarh.
7000 CTP, that has an area of 375-acres, is also an approved Special Economic Zone. It provides flexible space
options for technology companies with plots of various sizes, built-to-suit facilities and large and small
6000
campus sites. Wipro, Infosys and IBM are the major tenants of this Park. DLF Group has developed
5000 DLF Infocity within CTP to provide space to the IT/ITES occupiers.
Rs./sq.ft.
4000 The residential real estate market in Chandigarh does not have much to offer, due to the lack of space for
further development. Most of the new residential developments are coming up in Panchkula, Mohali and
3000
Zirakpur and Dera Bassi on Chandigarh-Ambala highway. Panchkula real estate market mostly consists of
2000 residential developments in the form of bungalows, independent houses and flats. With rising demand and
proximity to Chandigarh, there are ready takers for the available land parcels.
1000
0 New residential developments are in the offing in Zirakpur and towards Nada Sahib, where Haryana
Development Authority (HUDA) is coming up with new sectors for group housing. In Zirakpur most of the
Chandigarh
Mohali/Panchkula
Zirakpur
development is happening near the intersection of NH-21and NH-20. Many local developers are acquiring
small land parcels and building residential colonies. Some of the better-known projects include
Silver City (I & II) on Ambala Road (NH-21) and Royal Estates.
Locations
Capital Values
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Figure 6
New residential developments by local builders, mostly in the form of townships, are coming up towards
Retail Market Values Kharar Road, few of the more important ones being Gillco Valley, Sunny Enclave and Shivalik City.
200 20,000 Prominent retail locations in Chandigarh comprise the sector markets. While Sector-17 forms the city centre
180 18,000 with the presence of major brands, Sector-22 is an important market with wholesalers dominating the retail
160 16,000 set-up. Besides, the Sectors-8, 9, 35 and 26 also serve as important retail locations. Sector-9 is considered to
140 14,000
be the main financial and banking services hub of Chandigarh. In Mohali and Panchkula, the Local
Rs./sq.ft.per month
Shopping Complexes (LSC) of every sector form the retail zone, catering to the basic needs of the
120 12,000
residents.
Rs./sq.ft.
100 10,000
80 8,000
Chandigarh is an emerging market for organised retail. Among the upcoming projects, two multiplex
developments are coming up in Sector-17 and Sector-44. Centra Mall (150,000 sq.ft.), slated to be
60 6,000
operational by end-2007, is coming up in Chandigarh Industrial Area. Shalimar Mall and Bell Vista Mall,
40 4,000 under construction in Sector-5, will be operational in 2007. Bella Vista Mall will also have a hotel complex.
20 2,000
0 0 Rental and Capital Values
Chandigarh
Mohali/Panchkula
Zirakpur
The prime residential locations in Chandigarh, which include sectors 4 to 10 command the highest values,
ranging between Rs.5,000-7,750/sq.ft. Other sectors command a price of Rs.3,300-4,400/sq.ft. With
developments on a fast growth trajectory, the demand for housing is expected to rise in the region.
Currently, Zirakpur has a price range of Rs.2,200-2,750/sq.ft. for plots and Rs.2,300-2,700/sq.ft. for flats
Locations while residential developmets in Dera Bassi have capital values of Rs.1,300-2,000 /sq.ft.
Source: Knight Frank Research Retail space supply in Chandigarh is restricted due to strict building bye-laws. Quoted lease rentals are
around Rs.120-180/sq.ft. per month for the ground floor and Rs.25-40/sq.ft. per month for first floor.
Within Chandigarh, two new projects are under construction currently; a mall-cum-multiplex in Sector-17
and another with a built up area of around 150,000 sq.ft. in the industrial area. Grade-A developments
comprising malls are coming up in Zirakpur, Dera Bassi and Mohali, under mega projects scheme. These
projects offer retail space at a rate of Rs.90-180/sq.ft. per month. However, with changing trends, a number
of hotels in mall developments are also in the pipeline.
On the commerical front, all the sectors in Chandigarh have common SCO format commanding a capital
value of around Rs.6,500-10,000/sq.ft. and with lease rentals of Rs.25-35/sq.ft. per month. The only
exception is Sector-9, the centre for banking, financial and telecom services. The rentals here average to
about Rs.90/sq.ft. per month while the capital values are approximately Rs.9,750/sq.ft.
In the last six months, there has been a correction in the residential property market in Chandigarh. With
correction in the market, stabilisation is envisaged which will encourage transaction rate.
Outlook
Corridor development is the latest buzz in Chandigarh region. Good connectivity at domestic and global
level, lower operational cost and easy availability of skilled labor, higher disposable incomes and lavish
lifestyle has put real estate on an upswing in the region. Chandigarh offers ample opportunity for hospitality
business as well. With more corporates establishing offices in the region, a significant demand of hotels is
witnessed. Further retail growth is envisaged along the highways in Zirakpur and Panchkula whereas
residential projects on Jalandhar Road and Ambala-Chandigarh highway will dominate the development.
Availability of land for real estate development in Mohali will ensure good quality real estate projects
fulfilling residential space demand from end users. Higher yields in Chandigarh will encourage the
development of integrated townships - self reliant developments encompassing residential, retail and
commercial units, over the next 3-5 years.
Figure 7
Office Market Values Ludhiana

71 6,000
70
Overview
5,000 Ludhiana, known for its hosiery and sports goods industries, is the most populated city of Punjab. Excellent
69
connectivity with major cities and a favourable business environment has made the city a preferred
68
Rs./sq.ft.per month
4,000 investment destination of the state.

Rs./sq.ft.
67
3,000 Though Ludhiana has witnessed considerable real estate growth in the past few years, most of the
66 developments have been unplanned and have resulted in extending the city boundaries. The major
65 2,000 commercial activities in Ludhiana were previously confined to Chaura Bazaar, Sarafan Bazaar, Lakkar Bazaar,
Purana Bazaar and Book Bazaar, which were item specific markets. Residential developments were
64
1,000 predominantly located in proximity to these prime commercial pockets. Over the years, these locations
63 have grown at a much faster pace than the respective growth in infrastructure.
62 0
Feroze Gandhi Market
Pakhowal Road
Locations
Residential development, Agar Nagar Ansal Plaza Mall, Ferozepur Road
Current Scenario
With the announcement of mega projects and liberal government policies, Ludhiana has attracted the
attention of a number of real estate investors. Of late, new locations like Mall Road, Link Road,
Ghumar Mandi, Feroze Gandhi Market, Sarabha Nagar Market and Ferozepur Road have emerged as
alternative markets to the commercial centre of Chaura Bazaar. Feroze Gandhi Market, located to the west
of the city, comprises mostly of mixed-use developments with retail component on the ground floor and
office space on the floors above. There is considerable demand for quality office space in this micromarket.
An interesting trend witnessed in the city has been the conversion of existing residential properties in the
central part of the city for commercial usage. Notably, over a period of time, a number of residential
Figure 8 developments in Pakhowal Road have been converted to retail and office spaces. Pakhowal Road will also
have the prestigious office-cum-retail project, City Centre (4 mn.sq.ft.), which is expected to become the
Residential Market Capital Values
preferred office address for various firms.
3,000
Besides the above locations, Chandigarh Road will also witness commercial projects following the workplace
2,500
principle. The demand will be primarily led by the companies from the banking and financial sector,
Rs./sq.ft.
2,000 telecom companies and other service sector corporates. At present, preference for stand-alone buildings is
gradually catching up in the city. In the long term, with the development of the international airport at
1,500
Halwara, commercial developments are expected to come up on Jalandhar Road as well.
1,000
The city has an active residential market. Sarabha Nagar, in the western part of the city has high-end
500 residential development. This location is an attractive retail market as well. Gurdev Nagar, BRS Nagar,
Kitchlu Nagar, Civil Lines and Club Road are the other residential locations offering quality residential
0
options. Residential developments in the city are also coming up in peripheral locations of South City and
Sarabha Nagar
Rajguru Nagar
Model Gram
Samrali Farms on both the sides of the canal. This includes an NRI township named 'Apna Punjab'.
Chandigarh Road has become the preferred destination for integrated townships and mixed-use projects.
Preference for plotted development rather than apartments is a distinguishing feature of the residential
market in Ludhiana.
Locations
Capital Values*
* Capital values taken for plotted developments
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Figure 9
At present, the city is witnessing the development of around 11 malls in different locations which are slated
Retail Market Values to be operational in the next 2-3 years. Most of these projects are coming up on Ferozepur Road and
120 6,000 GT Road. Currently, Ferozepur Road has a number of organised retail developments, like Vishal Mega Mart,
Ansal Plaza and Centrestage Mall. Large format retail projects like Westend Mall (471,000 sq.ft.) are also
100 5,000
underway in Ferozepur Road. National level developers like Aerens and Omaxe have made a presence in the
Rs./sq.ft.per month
80 4,000
city with their projects - Festival City (500,000 sq.ft.) and Gold & Wedding Souk (2 mn.sq.ft.) respectively.
Rs./sq.ft.
60 3,000
40 2,000 Rental and Capital Values

20 1,000
At present, Ludhiana market does not have any differentiation between office and retail space and both are
0 0 predominantly offered for sale rather than on lease. However, new malls under development in the outskirts
Mall Road
Ferozepur Road
Jalandhar Road
of the city are expected to usher in rental structure to the city's retail real estate market. In locations like
Feroze Gandhi market, capital values for commercial properties are in the range of Rs.3,500-4,500/sq.ft.
and rentals are about Rs.60-75/sq.ft. per month.
Locations Organised retail formats at Jalandhar Road have rental values of Rs.105/sq.ft. per month and capital values
Rental Values Capital Values of Rs.3,200/sq.ft. The quoted rentals in Sarabha Nagar Market are between Rs.80-90/sq.ft. per month. Mall
Source: Knight Frank Research developments in Ferozepur Road and Mall Road have rental values in a range of Rs.75-110/sq.ft. per month.
For the residential sector, capital values of high-end plotted developments in prime locations like Sarabha
Nagar, Civil Lines and Gurdev Nagar are in range of Rs.2,200-3,300/sq.ft. Plotted residential properties are
also available in Model Town Extension, Rajguru Nagar, Maya Nagar and Green Park in a range of
Rs.1,660-2,200/sq.ft. On the other hand, apartment developments in the city have capital values of
Rs.1,400-1,800/sq.ft.
Outlook
Arterial development together with improving infrastructure has facilitated growth of real estate market in
the city. Entry of established players has induced competition thereby leading to quality real estate projects.
Absorption rate for commercial space can be estimated to be high as significant demand for Grade-A
buildings is envisaged in the near future. High disposable incomes will encourage new age retail business in
the city. Thus, although Ludhiana real estate market is still at a nascent stage, the city has the potential to
lead the charts in North India for investment options with higher gains, provided adequate infrastructure is
created in time.
Lucknow
Overview
Lucknow, the state capital of Uttar Pradesh is a city of historical and cultural significance. Amongst the few
cities which can boast of rich architectural heritage, it is fast evolving as a modern real estate destination.
Increase in economic activity, changing aspirations of the resident population and potential for real estate
growth has led to massive changes within the city.
The erstwhile old city comprising locations like Aminabad and Chowk have given way to new centres of
growth like Gomti Nagar, Mahanagar, Janakipuram and Indiranagar in the suburbs. Though Hazaratganj
remains to be the CBD of the city, these emerging growth pockets have led to an increase in commercial
activities in the suburbs. Development is now not only limited to the main city and the suburbs but is also
active along the highways connecting Lucknow to other destinations. These include Sitapur Road, Faizabad
Road, Sultanpur Road, Raebareilli Road, Kanpur Road and Hardoi Road. Major township projects by
developers like Ansal, Sahara, Omaxe, Rohtas, Eldeco etc. have been proposed on these roads.
Sahara Ganj Mall, Shah Najaf Road Eldeco Sansar, Raebareilli Road
Current Scenario
Commercial activity in Lucknow, including retail and office sector, is mainly concentrated in and around
Hazratganj. Some other destinations like Kapurthala Commercial Complex in Mahanagar have also emerged
as alternate business centres. Offices in Hazratganj comprise those of banks, financial institutions, telecom
service providers, government agencies as well as those of some well known developers likes Parsvnath,
Halwasia, Rohtas, Eldeco, etc. Most of the developments in these locations are on the commercial complex
format and have been developed by local developers.
IT/ITES sector is yet to pick up in Lucknow and as such there is a lack of specific IT/ITES catering
developments. Also, anticipating the future demand, the STPI at Gomti Nagar is being revived. TCS and
Wipro are two IT companies going ahead with their plans in the city. Some quality office developments like
Shalimar Corporate Park and Pinnacle Towers are coming up in Gomti Nagar.
Figure 10
Office Market Values Till some time back, retail activity in Lucknow was largely unorganised in nature and concentrated in
60 6,600 locations like Hazratganj, Aminabad, Kaiser Bagh and to some extent in Mahanagar. Over the last few years,
50 6,400 with the Eastern Mall (250,000 sq.ft.) in Gomti Nagar and Sahara Ganj (400,000 sq.ft.) on Shah Najaf Road
becoming operational, organised retail has picked up in the city. However, MG Road in Hazratganj is still
Rs./sq.ft.per month
6,200
40
6,000 the most significant retail highstreet of the city and has all major apparel, accessories and food and
Rs./sq.ft.
30 5,800 beverage brands. Fun Republic Mall in Gomti Nagar is the latest addition to the city mall list and at least
5,600 8 more malls are in various stages of planning and development around the city.
20
5,400
10 The residential sector in Lucknow has witnessed a sea change in the recent times. Main city locations like
5,200
Chowk, Alambagh, Aminabad, Kaiserbagh are very congested and do not offer any new space for further
0 5,000
development. Some development in the form of rebuilding the old, demolished houses has however been
Hazratganj
Gol Market
Charbagh
done in these locations. Hazratganj, Civil Lines and the Mall Avenue are the high-end residential locations of
Lucknow and have mainly bungalow style developments. A few premium residential apartments have also
Locations
come up on Mall Avenue.

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Figure 11
Indiranagar and Gomti Nagar are the suburban locations which are witnessing hectic residential
Residential Market Capital Values development. Both these locations have individual bungalows and as well as new apartment style
2,500 developments. Omaxe, Eldeco, Parsvnath and UP Township in collaboration with the Uppal Group and the
Chadha Group are developing apartment projects in Gomti Nagar.
2,000
Naya Haiderabad, Mahanagar and Janakipuram are chiefly higher and middle-income residential locations.
Rs./sq.ft.
1,500
Sahara has developed two projects - Sahara State Homes and Sahara Grace in Janakipuram. Arif Industries
1,000 Metro City apartment project is being developed in Paper Mill Colony near New Haiderabad.
500 On the outskirts of Lucknow, Sahara is coming up with a 175-acre township called the Sahara City Homes
on Hardoi Road. Not very far from there, Eldeco is developing a 200-acre Eldeco Town on Sitapur Road.
0
Towards south of Lucknow, on Raebareilli Road, Rohtas is building 2/3 bedroom apartments Rohtas Icon
Gomtinagar
Jankipuram
Hardoi Road
near Vrindavan Yojna. Also, Eldeco has its plotted row house and bungalow scheme near South City.
Just off Raebareilli Road is the 250-acre Omaxe City Township project. This development will have
Locations apartments and villas together with office and retail blocks. The township is expected to be operational by
Capital Values early 2008. Besides these, townships by Ansals and Sahara on Sultanpur Road and by Lucknow
Source: Knight Frank Research Development Authority on Kanpur Road have also been announced.
Rental and Capital Values

The unprecedented rise in demand for residential space has led to a similar rise in capital values. Values in
suburban locations like Janakipuram, Gomti Nagar, Indiranagar, Aliganj and Mahanagar have increased by
25-50% over the last 2 years. Quoted rates for residential developments by Omaxe, Eldeco and Parsvnath in
Gomti Nagar are between Rs.1,800-2,200/sq.ft. Residential developments in Jankipuram and Aliganj
command a rate of Rs.1,200-1,800/sq.ft. The new residential developments coming up on the outskirts of
the city on Hardoi Road and Sitapur Road range between Rs.1,000-1,200/sq.ft. Certain developments on
Raebareilli Road are quoting a rate of Rs.750-1,000/sq.ft.
Office space rentals in the CBD of Lucknow of Hazratganj are in the range of Rs.45-55/sq.ft. per month
while those in Gol Market and Mahanagar are at approximately Rs.30-45/sq.ft. per month. The rentals for
commercial space around Charbagh and in Alambagh are about Rs.40-50/sq.ft. per month.
The ongoing rentals on the highstreet of MG Road in Hazratganj are in the range of Rs.100-180/sq.ft.
per month whereas the capital values range between Rs.15,000-20,000/sq.ft. Other important retail
markets of the city like those of Alambagh, Aminabad and Kaiserbagh command a retail rental of
Rs.70-100/sq.ft. per month, depending upon location and frontage. The capital values in the same
Figure 12 locations range between Rs.6,000-8,000/sq.ft. The rentals in the two operational malls of the city, the East
Retail Market Values End Mall at Gomti Nagar and Sahara Ganj on Shah Najaf Road, are similar and quoted to be in the range of
Rs.110-160/sq.ft. per month.
200 25,000
180
Outlook
160 20,000
Lucknow real estate market has gained momentum over the last 2-3 years. The city offers substantial
140
potential for future growth and this is being supplemented by proactive policies of the state government.
Rs./sq.ft.per month
120 15,000 Lucknow Development Authority (LDA) has taken active initiative in all round development of Lucknow.
Rs./sq.ft.
100 Land banks are being auctioned in specified locations to bring about a planned development of the city.
80 10,000 Proper planning of the city's infrastructure and of amenities and utilities is being done to support future
growth and development in the city.
60
40 5,000 The entry of a number of national level developers and retail brands in the city points towards the positive
20
outlook for the city. With the backing of quality manpower availability, supportive policies and increasing
0 0
purchasing power, Lucknow will emerge as a key IT/ITES as well as retail destination of North India.
MG Road
Shah Najaf Road
Aminabad
Locations

Guwahati
Overview
Guwahati, the capital city of the state of Assam is heralded as the ingress to the northeastern states of the
country. Guwahati has been the service centre for the oil industry and tea plantations and home to
important tea auctions.
Being the economic hub of the region, the city is witnessing considerable migration of population from
within the state as also from the neighbouring states. Within the span of a decade, the city has seen a
considerable population growth of over 40%. This extensive population growth has been responsible for
bringing upon a number of changes in the region. Residential units, hitherto comprising individual houses,
are being developed in the form of apartment buildings in prime locations of the city situated along the
main roads of the city, viz. RG Baruah Road and GS Road. Departmental stores, supermarkets and large
format stand-alone stores are coming up all over the city. Brand-consciousness has caught up with the city's
youths and highstreet retailing is flourishing in the region.
While IT has still not penetrated the city as in the other parts of the country, Guwahati has attracted a
number of insurance and FMCG companies. Typically, the government organisations are the major
employers in the region. Most of the offices are located in Ulubari, the CBD of the city, and in Bhangagarh
both situated along the busy GS Road. The traditional retail markets of the city are concentrated in
Fancy Bazaar, Pan Bazaar and Paltan Bazaar.
The Cube, GS Road The Hub, GS Road
Current Scenario
In the recent years, the city's real estate market has grown on a gradual note. Although developers in the
city had undertaken construction of a number of projects, both commercial and residential, time and again
these developments were halted due to government policies regarding Floor Area Ratio (FAR). These
hiccups notwithstanding, a number of multinational companies, predominantly in the banking sector, have
established their zonal head offices in the city. Majority of these financial institutions, including ICICI Bank
Figure 13
and HDFC Bank, have occupied office space along the GS Road.
Office Market Values
60 7,000 Organised retail has been the most notable development in the city. While a number of food and beverage
6,000
chains like Café Coffee day, Barista and Baskin Robbins have their presence in the city, others like
50
McDonald's are scouting for large format retail space to set up their flagship store. According to industry
5,000
40 sources, Pantaloon Retail is scheduled to enter the market with its Big Bazaar brand of retail format in a few
Rs./sq.ft.per
Rs./sq.ft.
month
4,000
30 months' time. Currently, majority of the retail space developments are taking place on GS Road, right from
3,000 Paltan Bazaar to Six-mile, mostly in the form of stand-alone stores. The upmarket residential developments
20
2,000 in the vicinity provide the requisite catchment. In recent times, Ganeshguri has come up fast as an
10 1,000 important highstreet, which could be attributed to the flyover connecting the location to GS Road.
0 0
Some of the important large format retail developments in the city include Vishal Megamart (40,000 sq.ft.)
Ulubari
Ganeshguri
at Paltan Bazar and Hub (40,000 sq.ft.) at Bhangagarh, both of them operational since 2005. These mega-
stores are pulling in the crowds and are enjoying sufficient conversion of footfalls.
Locations

www.knightfrank.com
Figure 14
Another important retail development, the 0.3 mn.sq.ft. Dona Planet, scheduled to be complete in March
Residential Market Capital Values 2007, is expected to usher in the 'age of multiplex' in the region. The project will house Cinemax in an area
2,500
of 19,750 sq.ft. Furthermore, the 56,000 sq.ft. Divine Plaza at Ganeshguri would be ready in 2007. Besides
these, a number of shopping complexes, stand-alone stores and large format malls on GS Road are in the
2,000
pipeline. These are scheduled to enter the market within the next two years.
Rs./sq.ft.
1,500
The city is also witnessing an increasing demand for housing in prime locations. While the central locations
1,000 of the city have reached saturation level in terms of requisite vacant land for residential developments, there
has been a perceptible shift of such developments to the outskirts of the city. Locations like Zoo-Narengi
500 Road, Khanapara, Beltola and Basistha are developing as alternative residential destinations. A number of
0
multistoried apartments are being developed on these locations, around 10 kms away from the city centre.
GS Road
RG Baruah Road
Basistha
Amongst the noteworthy residential projects, the Guwahati Metropolitan Development Authority (GMDA)
has come up with a Games Village at Sarusajai along the NH-37, consisting of 700 residential units and
totaling up to approximately 0.78 mn.sq.ft. of built up space. Another large scale residential development
by Brahmaputra Constructions, comprising 150 apartments, is coming up on RG Baruah Road.
Locations
Capital Values

Guwahati has seen considerable increase in real estate prices since the past year. On the office market front,
the establishments with office space consist generally of retail component on the ground and first floor. The
average rental value for Grade-A office space developments in the city are estimated at Rs.50/sq.ft.
per month.
Residential developments witnessed prices scaling up by around 60% over the ones existing last year.
Currently, the prices quoted by prime residential projects in the city are within the range of
Rs.1,500-2,200/sq.ft. The apartments offered by the GMDA at Games Village, Sarusajai, come with a price
tag of Rs.1.5 million for a two bedroom apartment and Rs.2 million for a three bedroom one. The reason
behind this high price range of residential developments in the city can be attributed primarily to the high
cost of construction, amongst others. The developers in this region also have to take in to account the fact
that the city is in an earthquake sensitive zone and has to provide adequate safety measures to the project.
In Guwahati, outright purchase of retail space is the general practice. However, as new malls are coming up,
the concept of leasing retail space is gradually becoming perceptible in the city. Presently, the rentals
charged by retail space developers on the GS Road stretch exist at a range of Rs.40-70/sq.ft. per month.
Capital values for such projects are quoted at Rs.3,000-6,000/sq.ft.
Outlook
Guwahati is home to 24% of the total urban population of the state of Assam. In the last five years a
number of infrastructure development projects have been undertaken to augur progress in to this laid back
region. Amongst the projects nearing completion note can be made of the ambitious Inter State Bus
Figure 15 Terminus at Katabari on the highway. Besides, the 33rd National Games to be held in Guwahati in 2007 has
Retail Market Values brought about hectic activity around the highway. This trend is likely to continue in the years to come as
the Games Village township would generate catchment for a number of commercial developments in the
80 7,000
region.
70
6,000
60
Rs./sq.ft.per month
5,000 In the present scenario, retail developments are seen as profitable ventures by the developer community in
50 the city and most developers are emphatic about its continued success in the coming years. In the next two
Rs./sq.ft.
4,000
40 years, a number of national level retail corporations and international brands are expected to enter the
3,000
30 Guwahati market.
2,000
20
1,000
10
0 0
Paltan Bazaar
Ganeshguri
Bhangagarh
Locations

Bhubaneswar
Overview
Bhubaneswar, the capital of Orissa and the "Temple Town of India", is an important metropolis of eastern
India. The city is well connected with the rest of the country and has the potential to emerge as an
important growth centre.
Being the seat of administration in the state, Bhubaneswar has attracted a huge worker population, mostly
from the neighbouring locations, and has seen its population growth surge by 57% over the decade. The
prime economic drivers of the city have been trade and tourism. With the growth of IT/ITES prospects in
the city and the resurgence of the mining industry, Bhubaneswar is expected to evolve as a significant
urban centre of the country in the forthcoming years.
Though the infrastructure development in the city has been rather slow, there has been steady
development in the real estate sector of the city. A number of national level developers have expressed
interest to set up their projects in the city. With Janpath, the CBD of the city, facing paucity of land, new
commercial developments in the city are coming up in the north and southwest locations of the city.
Residential property in the city mostly comprises independent units in prime locations of Ashok Nagar,
Forest Park, Jaidev Vihar and Bapuji Nagar with a few multi-storied apartments in Rasulgarh. Demand for
apartments and flats are expected to pick up with increasing preference shown by the HIG population of
the city.
A prime tourist destination of the country, Bhubaneswar has an active retail scenario. At present, retailing in
the city is largely unorganised and are located at Janpath, Cuttack-Puri Road, Ekamra Marg and
Bapuji Nagar. Several major brands have their outlets in the city with most of them concentrated in and
around Janpath.
Fortune Towers, Chandrasekharpur Forum Mart, Off Janpath
Figure 16
Current Scenario
The Bhubaneswar real estate market is government regulated with almost 70-75% of the land holding
60 7,000
vested with the state owned Orissa State Housing Board. Lack of space within the city has led to the
50 6,000
emergence of locations like Chandrasekharpur, Sailashree Vihar, Nandankanan and Patia in the north of
Rs./sq.ft.per month
5,000
40 Bhubaneswar. Kalinganagar and Khurda are the other emerging locations in the southern part of the city.
Rs./sq.ft.
4,000
30 The commercial real estate in the city at present comprises mixed-use development - office space in the
3,000
20 upper floors with retail on the ground and first floor. A few stand-alone office structures have been
2,000
developed by the local government to attract IT/ITES companies. Some of the major developments by the
10 1,000
State Government through Industrial Development Corporation of Orissa (IDCO) are the Tower 2000 in
0 0 Mancheswar Industrial Estate, IDCO Towers in Janpath and Fortune Towers in Chandrasekharpur which
Janpath
Chandrasekharpur
houses prominent companies like TCS, Reliance Infocomm, Tata Teleservices, POSCO and Essar Steel.
The Orissa Government has accorded ‘Priority Sector’ status to the IT sector to attract investment in to the
region. IT majors Infosys and Satyam who had set up their development centre in Bhubaneswar in 1997 are
contemplating expansion plans. An important development by IDCO has been the Infocity-I, the IT SEZ in
Locations
Chandrasekharpur.
www.knightfrank.com
Figure 17
Adjacent to Infocity-I Delhi-based DLF Group is coming up with their IT Park in Chandaka Industrial Estate.
Residential Market Capital Values Genpact has also announced plans of setting up a BPO SEZ on 25-acres of land in the Mancheswar
2,500 Industrial Estate of the city. Apart from IT, a 60-acre biotechnology park is also planned in the city.
2,000 On the residential property front, the government had been the major provider of housing in terms of land
and built up space. However, deficient supply from the government has prompted the city's residents to
Rs./sq.ft.
1,500
turn towards the private developers to meet their housing demand. A number of township developments
1,000 have been proposed to come up in the suburban and peripheral locations. These include a 100-acre
township by Sahara India along the NH-5, the Club Town project in Chandrasekharpur and another
500
large-scale joint development by Bhubaneswar Municipal Corporation in Shaheed Nagar. Most of the
0 residential projects in the city are witnessing high absorption rates and the demand for residential units has
Ashok Nagar
Shashtri Nagar
Nandankanan
increased in the city in prime residential locations of Ashok Nagar, Bapuji Nagar, Shaheed Nagar and Surya
Nagar.
Bhubaneswar is also currently witnessing a perceptible change on the retail front. The 180,000 sq.ft.
Forum Mart off Janpath was the first organised retailing development in the city. According to industry
Locations
sources, retailers like Reliance and Bharti are scouting for land in the CBD. Besides this, several local
Capital Values
developers have plans for setting up large format malls through joint venture in the city.

In the last few years there has been an annual appreciation of almost 50% in office space values. Office
space in Janpath has lease values in the range of Rs.35-60/sq.ft. per month and capital values in this
location vary between Rs.4,000-7,500/sq.ft. The average lease rates for office space in other locations vary
between Rs.20-30/sq.ft. per month and the capital values range between Rs.2,400-4,000/sq.ft.
Presently, the residential market in terms of apartments in Bhubaneswar is driven primarily by investor
demand. As a result, prices in prime high-end residential locations have increased substantially over the past
year and are currently at a range of Rs.1,650-2,500/sq.ft. while mid-end apartments are at
Rs.1,600-1,800/sq.ft. Locations like Khurda, Patia and Nandankanan which have been promoted as the
growth corridors of the city, comprise duplex bungalows with high resale value. The residential
developments in these peripheral locations are witnessing very high absorption and prices are in the range
of Rs.1,500-1,800/sq.ft.
The retail lease rates in key highstreets of the city are estimated at Rs.45-60/sq.ft. per month while the
capital values are in the range of Rs.5,500-7,000/sq.ft. In secondary highstreets of Cuttack-Puri Road, rental
values are at Rs.35-45/sq. ft. per month and capital values are quoted at Rs.4,000-5,500/sq.ft.
Outlook
The state government has been actively promoting Bhubaneswar as an upcoming IT/ITES destination.
Figure 18
Recently, to give further push to the sector, an International Institute of Information Technology (IIIT) was
Retail Market Values launched at Gothapatna by the state government with support from the IT industry. There are also plans to
60 7,000 set up a 100-acres IT Park adjacent to the institute to house the IT companies. Real estate prices are
50 6,000 expected to rise further with demand arising from various MNCs and IT/ITES companies. Besides, with a
number of SEZs coming up in the neighbouring districts, including a 4,000-acre SEZ by POSCO, the
Rs./sq.ft.per month
5,000
40
economy of the city will be further strengthened.
Rs./sq.ft.
4,000
30
3,000 The government has called for participation from the private sector in industrial estates like Agro-tech Park
20 and Diamond Park in the region. The administration has also taken up major infrastructure projects to
2,000
10 1,000 improve connectivity between key cities, viz. Cuttack-Bhubaneswar and Sambalpur-Rourkela. Moreover,
work on airport expansion and modernisation is also underway. Besides these, a proposal for International
0 0
Airport and Air Cargo Complex is under consideration. All these developments are anticipated to augment
Janpath
Cuttack - Puri Road
Ekamra Marg
the overall attractiveness of the city and thereby draw investors in various sectors to the city.
Locations

Figure 19
Office Market Values Jaipur

50 9,500
48 Overview
Rs./sq.ft.per month
9,000
46
Jaipur, the bustling capital of Rajasthan, is a major international and domestic tourist destination. Widely
Rs./sq.ft.
44 8,500
42
known as the ‘Pink City’, Jaipur is fast transforming into a cosmopolitan city. Over the last 15 years, Jaipur
8,000
40 has undergone major economic reforms. Economic growth has led to expansion of urban space in the
7,500 region. With increasing disposable incomes and changing socio-economic environment, suburban and
38
36 7,000 peripheral locations have become the focus of development.
MI Road
Subhash Marg
Old Jaipur, also known as the Walled City, houses traditional markets like Bapu Bazaar and Chand Pole.
MI Road is the prime office and retail location of Jaipur and has several multistoried commercial complexes.
Old city locations of Ramchandra Chaukari, Gangapol Chaukari and Jaleb Chowk are no longer preferred for
Locations residential purpose as they are quite congested and have become more of commercial locations. Bani Park,
Rental Values Capital Values Raja Park, Malviya Nagar, Jawahar Nagar and Nirman Nagar are the high-end residential locations and are
characterised by the availability of plots and apartments.
Some land parcels are still available in the Walled City and developers are actively seeking these for
development. Upcoming IT projects and SEZs are expected to trigger off further development in the city as
commercial and residential demand is likely to pick up with the increase in economic activity.
Crystal Court Mall, Malviya Nagar Residential development, C-Scheme
Current Scenario
Till late, office space in Jaipur was confined to multistoried commercial complexes on MI Road and the
locations in the vicinity. Due to the increase in demand for Grade-A office space, new developments are
coming up in Bani Park, JN Marg, Ashok Marg, Ahinsa Circle and on Tonk Road. Corporates like Tata AIG,
Genpact, HSBC, GAIL, Reliance Infocom, Yes Bank and Standard Chartered have their offices in the city.
With a number of IT parks coming up on Delhi Road, Sitapur Road, Tonk Road and Vaishali Nagar, these
Figure 20 peripheral locations are emerging as preferred IT destinations of the region.
Residential Market Capital Values Residential demand has moved from the Walled City to locations like Ashok Nagar, C-Scheme and Lal Kothi.
4,000 Vidhyadhar Nagar, Vaishali Nagar and Mansarovar are the upcoming residential locations on the outer
3,500 fringes of city. New residential projects like Omaxe City, Sushant Lok, Parsvnath Narayan City, Amarpali and
3,000 Vatika are coming along Ajmer Road, Tonk Road and Kalwar Road.
2,500
As with the other smaller cities of the country, Jaipur is also witnessing a retail boom. A number of malls in
Rs./sq.ft.
2,000 variable retail formats have come up around the city. Gaurav Tower and Savitri Towers in Malviya Nagar,
1,500 Cityplex on Tonk road, Silver Square and Mall 21 are some of the existing malls in the city. At present,
1,000 a number of retail projects, including City Mall on Ashok Marg, Crystal Palm and MGF on Bhawani Road
and Golcha Trade Center on MI Road are under construction in the city.
500
0
Recently, a number of national level developers have entered the Jaipur real estate market and this has led
C-Sheme
Bani Park
Tonk Road
to increased competition for the local developers.
Locations
Capital Values
www.knightfrank.com
Figure 21
Retail Market Values
100 25,000
With the entry of global firms in the city, the office market in Jaipur has been growing steadily to support
90 the ancillary activities. MI Road offers office space at rentals ranging from Rs.25-50/sq.ft. per month, while
80 20,000 office space on Subash Marg is available for capital values varying between Rs.7,800-10,000/sq.ft. and at
Rs./sq.ft.per month
70
rentals in the range of Rs.35-55/sq.ft. per month.
60
Rs./sq.ft.
15,000
50
In the residential segment, Bani Park, Malviya Nagar and Raja Park have witnessed an appreciation of
40 10,000
25-30% in the last two years. Capital values vary in the range of Rs.1,850-3,850/sq.ft. for plotted
30
20 5,000 developments in these locations. C-Scheme fetches the highest rates with capital values of apartments
10 ranging from Rs.3,300-4,000/sq.ft., while residential developments in Bani Park have capital values of
0 0
Rs.3,250/sq.ft. Civil Lines, Bajaj Nagar, Gandhi Nagar and Tonk Road are preferred mid-end residential
MI Road
Sahkar Bhawan
Malviya Nagar
pockets with a price range of Rs.1,450-1,750/sq.ft.
Growth of retail in Jaipur is fueled by domestic and international tourism. Retail formats in the city cater
to established retail brands stores as well as to local handicraft stores. Capital values vary from
Locations
Rs.20,000-22,000/sq.ft. for shops in premium shopping malls whereas rental values vary from
Rental Values Capital Values Rs.70-110/sq.ft. per month. Malls in C-scheme have witnessed appreciation of approximately 35% in the
Source: Knight Frank Research last one year due to excellent connectivity and proximity to the Walled City.
Outlook
Jaipur is a growing market for real estate and has immense potential for expansion. Low operational costs,
availability of labour at cheaper rates, low attrition rates due to lack of regional competition and economic
reforms have led to many IT/ITES corporates exploring the market for their expansion plans. This has also
brought about a change in the construction quality and has ushered in a new era of development.
Investments from NRIs and inclination of service class for second home have supported the residential
market. Quality real estate and balance between demand and supply has led to a healthy market where
good appreciation in real estate values is envisaged over a period of time.
Figure 22
Office Market Values Ahmedabad

30 3,500
25 3,000
Overview
2,500 Ahmedabad, the commercial capital of Gujarat, is referred to as ‘Manchester of India’ owing to the
20
established textile industry in the city. Stable business environment, traditional entrepreneurial skills and
Rs./sq.ft.
2,000
15 liberal state policies have resulted in a vibrant economy of state.
1,500
10
1,000 Being designated as the 'Megacity' in the Union Budget, 2005 has brought substantial funding for
5 500 upgradation of infrastructure in the city. Projects like Ahmedabad Gandhinagar Metro Rail, Sabarmati River
0 0 Front Development, Bus Rapid Transportation System (BRTS) and expansion of city in a planned manner
have attracted a considerable amount of investment to the real estate market as well. Several town planning
CG Road
Ashram Road
SG Highway
schemes have led to development of organised space suitable for off-shoring business activities.
Presence of quality human capital, availability of land at reasonable prices and better connectivity make
Locations Ahmedabad an attractive destination for business developments. Development of the Knowledge Corridor
and the approval of six SEZs are expected to form a strong economic base for the city. Also industrial
development across various sectors like pharma, chemicals, apparel and textile, has generated a number of
employment opportunities in the region.
Typically, Ashram Road is the established CBD of city with a number of government and corporate offices.
Central locations of CG Road, Satellite and Drive-in Road are also preferred due to better quality of space
and their proximity to residential developments in Kalupur, Daryapur, Raipur, Khadia and Jamalpur. The
traditional retail markets of Ahmedabad primarily include old city locations of Shahibaugh, Kalupur, and
Relief Road. Besides, textile mill land in the eastern part of the city has the potential for new retail,
residential and commercial ventures.
GDNR Info City IT Tower, Gandhinagar Piramyd Abhijeet, CG Road
Figure 23 Current Scenario

Residential Market Capital Values Dynamic growth in the city has made a vast difference to the landscape of the city. With the CBD lacking
3,000 space for development, new micromarkets have emerged across the city. A number of office developments
have come up on SG Road, due to the congestion in the core city. The focus of development has shifted
2,500
from eastern Ahmedabad to the suburban and peripheral locations in the western part of the city.
2,000
As the cost for IT/ITES operations in Ahmedabad being lower by 40-50% as compared to the Tier I cities of
Rs./sq.ft.
1,500 the country, substantial potential is envisaged for future IT/ITES investment. With several tax incentives,
concessions and a FAR of 2.25, the city is expected to attract more IT/ITES companies. Currently, IT/ITES
1,000
development in the city is at a nascent stage. Info City, an IT Park spread over 150 acres in Gandhinagar has
500 tenants like Microsoft, ACI and TCS. IT/ITES SEZ by the DLF Group, Mindspace IT Park by the Rahejas and
Gandhinagar Electronics Estate by Gujarat Industrial Development Corporation (GIDC) are expected to be
0
operational in the next few years.
Ambavadi
Satellite Road
Prahladpur
In the residential segment, with the Old Central Zone of the city having reached saturation levels, locations
like Navrangpura, Naranpura and Ambavadi are witnessing strong demand for high-end apartments. Post
the 2001 earthquake, there has been a tremendous demand for low-rise buildings, bungalows and
Locations
row-houses. Suburban and peripheral locations like Bopal, Ambali, Shilaj, Satellite, Memnagar, Vastrapur,
Capital Values
Prahlad Nagar, Vasna and Paldi, are coming up with residential developments.
www.knightfrank.com
Figure 24
CG Road, the retail highstreet of the city, has been a favoured location for malls and exclusive show rooms
Retail Market Values of various international brands. Of late, the SG Highway has become the most preferred destination for
160
organised retail due to availability of larger developments. At present, ten malls are operational in the city.
16,000
140 14,000
High propensity to spend, entrepreneurial spirit, wide product range and competition among the retail
chains are driving the retail market in the city. By end-2009, the city is expected to receive a supply of
Rs./sq.ft.per month
120 12,000
100 10,000 4-4.5 mn.sq.ft. built up area in the retail segment.
Rs./sq.ft.
80 8,000
60 6,000
4,000
40
20 2,000 The CBD office micromarket rental values are currently at Rs.18-27/sq.ft. per month. Rental values in the
0 0 western suburbs of the city are around Rs.18-22/sq.ft. per month, while peripheral micromarkets, which
CG Road
Drive-in Road
SG Highway
had an appreciation of 27% in the last few months, have rentals in a range of Rs.22-24/sq.ft. per month.
In the residential segment, New Central Zone locations have witnessed around 16%-20% appreciation in
residential values in the last few years. Capital values of apartments in this micromarket are around
Locations Rs.1,600-2,500/sq.ft. Western suburbs of the city witnessed strong appreciation of around 20%-24% and
Rental Values Capital Values the prevailing rates are around Rs.1,300-1,650 per sq.ft., while south western suburbs of Paldi, Vasna,
Source: Knight Frank Research Pralhad Nagar and Vejalpur witnessed capital values rise to the current rates of Rs.1,200-1,450/sq.ft.
Retail high street developments have witnessed a rise in rentals of around 20% in the last few years. Rental
values in the CBD micro markets are quoted at around Rs.80/sq.ft. per month. Western suburban locations
have witnessed appreciation of around 21-25% and prevailing rates here are around Rs.100-115/sq.ft.
per month. Peripheral micro market has witnessed annual appreciation of 30% and rental values are around
Rs.150/sq.ft. per month.
Outlook
Ahmedabad market can be said to be in a transition stage with the real estate sector getting more
organised and user specific. Over the next one year, the sector is expected to get an investment of
Rs.150 billon.
Multi-locational peripheral development has opened the potential for IT/ITES projects. Skilled labour,
availability of land in market, quality real estate, low operational costs, good connectivity, supportive
government policies and entrepreneurial culture are the strengths of this city. However, social infrastructure
has still not matched the desired pace, hence self-contained and integrated projects will have better
prospects.
With the IT/ITES SEZs becoming operational over the next few years, real estate development is expected to
promote the growth and development of Ahmedabad. Stable market growth and promising returns is
envisaged in Ahmedabad in the forthcoming years.
Figure 25
Office Market Values Surat

80 9,000
70 8,000 Overview
7,000
60
Surat, the second largest commercial hub in Gujarat, is also one of the major industrial locations of the
6,000
50
country. It is renowned for its textile manufacturing, diamond cutting and polishing industries.
Rs./sq.ft.
5,000
40
4,000
30 Over the last two decades rapid industrialisation, along with consequent urbanisation, have led to
3,000
20 2,000
large-scale conversion of agricultural land for residential, commercial and industrial use. Developers have
10 1,000 acquired large tracts of land in the peripheral locations and plan to sell them as plotted developments. The
0 0 CBD of the city, located along the Ring Road, is witnessing considerable space crunch and new
developments have come up in the suburbs of the city. Udhna Darwaza and Majura gate, to the south of
Athwalines
Udhna Darwaza
Citylight
the city, has a small number of stand-alone structures to cater to the office space needs of the banking and
financial sector.
Locations Locations like Ghoddod Road, Parle Point and Athwalines form the prime residential pockets of the city.
Majority of the retail markets are concentrated in these locations. Surat has a mix of local retail chains as
well as several national level retailers. Varechha forms the centre of diamond trade in the region. Another
major industry, the wholesale textile market, is located in the Ring Road.
Valentine Theatre, Piplod Raj Empire Multiplex, Bhatar Road
Current Scenario
The real estate market of the city has witnessed considerable activity in the past few years. While industry
sources hint at the black market component being behind the upsurge in real estate development in the
city, the fact that there has been a significant population growth of 62% during the last decade has
contributed to the development of high-rise apartments and row houses in the suburban locations of the
city.
Majority of the residential projects are coming up in the northwestern part of the city, in locations of Adajan
Figure 26 and Rander. The southern locations of Citylight and Piplod, the HIG pockets, too have a number of
Residential Market Capital Values Grade-A residential developments coming up in this micromarket by 2008.
3,000
Besides residential developments, which have been the most active segment of the real estate market, retail
2,500 projects are also on the rise. Majority of the retail developments are coming up at Piplod, along the Dumas
Road. Most of these retail projects are being developed as malls, as opposed to the prevalent formats
2,000
consisting of mixed use developments. Around four malls are underway in proximity to each other on the
Rs./sq.ft.
1,500 Dumas Road. Approximately 2 mn.sq.ft. of new retail space is estimated to enter this micromarket, which
may, according to industry sources, amount to an oversupply situation. Amongst the notable mall
1,000 developments, Iscon Mall (325,000 sq.ft.) is expected to be operational by early 2007.
500
Surat lacks any form of organised office space and most of the corporates present in the city have taken
0 space in the various commercial complexes around the city. Currently, highstreets at Majura Gate, Parle
Citylight
Bhatar
Adajan
Point, Ghoddod Road and Athwalines comprise such commercial developments. Offices in the city mostly
cater to insurance companies, broking houses, coaching centres, etc. No major IT/ITES organisation has its
Locations presence in the city currently.
Capital Values
www.knightfrank.com
Figure 27
Only a few MNCs like JM Morgan Stanley and ABN Amro are in Surat presently but with increasing
Retail Market Values urbanisation of the region, more corporates are expected to enter the market in the near future.
140 14,000
120 12,000 Rental and Capital Values
Rs./sq.ft.per month
100 10,000
The residential market in the city is witnessing an upswing in the prices over the past few years.
Rs./sq.ft.
80 8,000
New Grade-A residential developments in the city like Surya Darshan at Citylight and Aashirwad Palace at
60 6,000 Bhatar Road offer amenities like gymnasium and club houses which were previously not available to flat
40 4,000 buyers/owners in Surat. Currently, the residential prices exist within a range of Rs.1,650-2,700/sq.ft.
20 2,000
0 0 Ring Road in Surat is the commercial hub. The rates in this location vary in the range of
Rs.1,500-1,800/sq.ft. Sale is preferred over lease. The capital values at Ghoddod Road and Parle Point,
Parle Point
Citylight
Ghoddod Road
the other important commercial locations of Surat are in the range of Rs.6,000-8,000/sq.ft.
On the retail front, as with the office space, lease models are not popular in the city. Retail spaces on
Locations Ghoddod Road and Parle Point are available at Rs.10,000-15,000/sq.ft. while rental values are quoted at
Rental Values Capital Values Rs.100-150/sq.ft. per month. Towards Udhna Darwaza, near the Ring Road, retail prices are within a range
of Rs.6,000-7,000/sq.ft. The rental values in the malls under development at Piplod Road are approximately
at Rs.65-70/sq.ft. per month.
Outlook
Work on Surat airport will mark the onset of commercial real estate activity in the city. Direct air
connectivity with the rest of the country will provide an immense boost to the trade and commercial
prospects of the city. It shall also attract business tourists, thereby leading to an upsurge in the hospitality
segment, particularly on the Dumas Road.
Under the Surat Municipal Corporation (SMC) and Surat Urban Development Authority's (SUDA)
comprehensive development plan, a number of infrastructure projects are underway. Also, Gujarat Industrial
Development Corporation (GIDC) is to develop a Gems and Jewellery Park at Ichhapore near Surat, which
will expectedly firm up land prices around that region.
With regard to the residential property markets, prices are expected to increase further over the next
6-10 months in the locations of Adajan, Rander, Citylight and Piplod. The demand for residential units will
be persistently driven by end-users as well as investors. By the end-2008, as majority of the
underdevelopment projects are completed, the western and southern suburbs of the city will emerge as
important hubs.
The retail markets in the city are expected to become more organised with an increasing number of people
getting exposure to brand culture. Key retailers like McDonalds, RPG, Spencer & Co., Shoppers Stop, etc.
are seriously considering to enter the market. Attractive demographics and viable rentals are the two
decisive factors behind their plans to enter the Surat market.
Nagpur
Overview
Nagpur, besides being an industrial city, is a key business and administrative centre of Maharashtra. The
city, spread over an area of approximately 253 sq.km., has witnessed a decadal population growth of
26.3% in 2001. Nagpur is undergoing major transformation and this is evident by the improving
infrastructure of the city, increasing focus of the local government on city development and the positive
changes in the real estate sector of the city.
The real estate prices, which had been inactive for many years, have witnessed a change with the
announcement of the Multi-modal International Hub Airport at Nagpur (MIHAN) in 2002-03. A number of
locations around the proposed MIHAN project have seen high escalation in land and residential rates. Major
companies like Satyam Infotech, GE, DLF, Shapoorji Pallonji, L&T Infotech, Patni Computers and Microsoft
have taken up large parcels of land in the SEZ within the Cargo Hub and this in turn will augment the
residential demand in the region. The prime residential projects in Nagpur, which mostly consist of
bungalows, are located in Chaoni, Dharampeth, Ramdaspeth, Shivajinagar, Wardhaman Nagar and Civil
Lines. The CBD locations of the city are Civil Lines and Sadat, while retail pockets in the city are
concentrated in Dharampeth, Gokulpeth, Sitabuldi, and Wardhaman Nagar.
MIDC Infotech Tower, Parsodi Inox Multiplex, Vardhaman Nagar
Current Scenario
As the IT/ITES industry is at a nascent stage, Nagpur does not have dedicated office buildings. The few
IT companies in the city are located at the MIDC IT Park at Sadar and the IT Park at Parsodi. Developments
existing in the CBD locations and those in Itwari, Gandhibagh, Ramdaspeth and Dharampeth have a mix of
retail and office space. Insufficient demand as well as lack of good plot sizes has restricted new commercial
development in these micromarkets.
Figure 28 Around 1.2 mn.sq.ft. of office space is expected to come up in the market in the next 2-3 years. The
Office Market Values Empress City project which is expected to be operational by 2009 will contribute approximately
44 6,000 0.7 mn.sq.ft. of built up space. Some of the prominent developers in the city are Aditya Builders, Alankar
42
Real Estate, Himalaya Builders, Narang Builders and Shriram Builders.
5,000
40 4,000 The residential supply in Nagpur has grown by almost 100% over the last few years. With a number of new
Rs./sq.ft.
projects mushrooming in various locations in the city, real estate development in Nagpur is on an upward
38 3,000
curve. Demand for housing in Nagpur arises from employees working in the local industries, businessmen,
36 2,000 IT/ITES and BPO professionals as well as those engaged in the insurance and banking sector. Since more
34 1,000 than half the population of the city constitutes of the middle-income and the upper middle-income group,
investments in residential properties by the local residents has shown a considerable increase.
32 0
Civil Lines
Ramdaspeth
Gandhibagh
The upcoming residential locations in Nagpur comprise Kamptee Road in the north-east, Khamla and
Hingna Road in the south-west and Besa and Wardha Road in the south. These locations have a number of
apartment complexes as well as stand-alone buildings coming up. Majority of the new supply is
concentrated in the southern zone (Wardha Road) near the upcoming Cargo Hub.
Locations
www.knightfrank.com
Figure 29
The increasing demand for housing has encouraged local developers to come up with new apartment
Residential Market Capital Values projects in Nagpur. Some of the notable residential projects in the city are Vyankatesh City by Sukhkarta
3,500 and Vyankatesh Builders, Sahara City by Sahara Industries and Empress City by KSL Industries. The concept
of developing large-scale township projects is getting a good response from the local residents and
3,000
investors. Companies like Satyam Infotech and Reliance have acquired large parcels of land for township
2,500 development in Nagpur.
Rs./sq.ft.
2,000
As with the other emerging cities, the retail landscape in Nagpur is experiencing significant change. The
1,500 major drivers of this growth are the increasing propensity to spend of the local population who are mostly
1,000 entrepreneurs, as well as the emerging IT sector in Nagpur. New retail growth can be seen close to the
prominent residential and high-income group locations of Dharampeth, Ramdaspeth, Gokulpeth,
500
Byramjee Town, Gandhibagh, Itwari and Wardhaman Nagar. New malls are also coming up around
0
VIP Road, Variety Square, Wardhaman Nagar and Gandhibagh. Around 3.2 mn.sq.ft. of retail supply is
Byramjee Town
Shivajinagar
Wardha Road
expected to come up in the city by 2009. The prominent upcoming retail projects in the city include two
large format malls by N Kumar Group on VIP Road and Khamla, both awarded to the group on
Built-Operate-Transfer (BOT) basis by the Nagpur Improvement Trust.
Locations
Capital Values
Source: Knight Frank Research Due to the rise in demand, the residential sector capital values have seen an annual appreciation of as high
as 150-200%. The capital rates in the upmarket residential locations like Civil Lines and Byramjee Town
range from Rs.2,000-3,750/sq.ft. while Shivajinagar and Ramdaspeth command rates of
Rs.1,500-3,200/sq.ft. Upcoming locations like Wardha Road presently command an average rate of
Rs.2,000/sq.ft. while Kamptee Road and Katol Road command rates of Rs.800-1,250/sq.ft. Besa in the south
eastern part of the city commands rates in the range of Rs.1,000-1,500/sq.ft.
Office space rental values in the CBD locations of Nagpur range from Rs.40-45/sq.ft. per month while
Ramdaspeth and Dharampeth command rental rates of Rs.35-40/sq.ft. per month. Other locations like
Itwari, Gandhibagh and Central Avenue Road command lease rates of Rs.35-40/sq.ft. per month.
Rental rates in old retail markets range from Rs.50-65/sq.ft. per month while other retail pockets like
Dharampeth and Sitabuldi command rates of Rs.60-80/sq.ft. per month. Upcoming retail locations of
VIP Road and Variety Square command rental rates of Rs.90-120/sq.ft. per month, while Wardhaman Nagar
commands a lease rate of Rs.90/sq.ft. per month.
Outlook
The 'R.K. Swamy's -BBDO Guide to Urban Markets, 2005' has ranked Nagpur as the 10th richest city in the
country. With infrastructure initiatives in place, Nagpur has a potential for developing into a much sought
after real estate destination. Availability of educated manpower, cheap real estate and land for large campus
developments are attracting many IT companies to this city.
Figure 30
The Nagpur Improvement Trust is planning around six mega township projects in various locations in the
Retail Market Values outskirts of the city while the Nagpur Municipal Corporation has plans to develop shopping malls on
120 12,000 BOT model and earn revenues as lease rentals. In the next few years, residential, commercial and retail
100
activity will be concentrated on Wardha Road, Airport Road, south eastern and southern western locations
10,000
Rs./sq.ft.per month
around the Ring Road. IT majors like Wipro, HCL and TCS have exhibited heightened interest to set up their
80 8,000
facilities in the city. Thus, with excellent infrastructure in place, a proactive local government and growing
Rs./sq.ft.
60 6,000 momentum in the real estate sector, Nagpur is expected to attract considerable investments in the near
40 4,000 future.
20 2,000
0 0
VIP Road
Dharampeth
Wardhaman Nagar
Locations

Indore
Overview
Indore, the commercial capital of the state of Madhya Pradesh, is the hub of business and trading activities
in the central India. The city is also well known for its textile industry.
Buoyed by a strong commercial base, Indore is fast becoming a favourable destination for major corporate
and foreign investors in the country. Developments such as the Special Economic Zone (SEZ) and
Auto Testing Track in Pithampur, IT Park at Khandwa Road, conversion of the domestic airport into an
international one are being undertaken at a rapid pace. Plans for developing a Super Corridor are also afoot
to improve connectivity between the eastern and the western parts of the city as well as to attract national
as well as Multi National Companies.
Encouraged by the various developmental activities underway in the city, a number of IT/ITES companies
have expressed their interest. MG Road, which can be classified as the CBD of Indore, has banks, insurance
and telecom companies' offices. Some similar offices and outlets are also located along the AB Road. With
the demand for office space market expected to rise in the next few years, real estate developers in the
region are gearing up to meet increased in demand.
There has also been heightend demand for apartments from the residents of the city. This has been on
account of rising land prices, scarcity of space within the city centre and aspiration for a modern lifestyle.
The demand for apartment-style housing could also be attributed to the fact that there has been
a 46% growth in the city's population in the decade, thereby emphasising the need to shift to alternative
housing.
Indore’s populace is mostly of entrepreneurs with high purchasing power. The city has a number of strongly
entrenched local brands along with national and international retailers. The old traditional unorganised
markets are slowly giving way to new organised retail markets by the arrival of new malls and shopping
centres in the city. Presently, the major retail growth can be seen in the central part of the city close to the
high-end residential locations of Palasia, Race Course, Saket and Gulmohar and also in upcoming locations
like Vijaynagar and MR 10.
Figure 31
Office Market Values Treasure Island Mall, MG Road BCM Heights, Navlakha Square
22.5 5,600
Current Scenario
22 5,500
5,400 Over the last few years considerable real estate activity has been undertaken by developers in the city. Most
Rs./sq.ft.per month
21.5
5,300 of these developments are taking place in the eastern part of the city near the Indore Bypass. While
Rs./sq.ft.
21 5,200 developers like Satya Group and Omaxe Constructions have commenced their projects viz. Malwa County
20.5 5,100 and Omaxe City respectively, others like Parsvanath Developers, Ansal Housing, Vivan Infrastructure and
5,000
20 DLF Group have made large scale investments on the Indore Bypass region. Besides these, the Madhya
4,900
Pradesh government has earmarked 2,000-acres of land for an IT SEZ near the proposed international
19.5 4,800
airport. This proposed airport will be a catalyst for future real estate development in the neighbouring
19 4,700
locations. Another noteworthy development is the Crystal IT Park on 24-acres of land at Khandwa Road.
MG Road
AB Road
Prospective growth of the IT sector has fueled the growth of residential real estate in the city. Furthermore,
Locations the revival of Pithampur and Dewas industrial estate have provided impetus to the real estate demand in
Rental Values Capital Values these industrial areas, as well.
www.knightfrank.com
Figure 32
Shalimar Township (23-acres) along the bypass was the first township concept successfully implemented in
Residential Market Capital Values Indore by the Mirchandani Group. Meanwhile, Sahara India Infrastructure and Housing has planned Sahara
2,000 City Homes on the Bypass at Bicholi Mardana. The integrated township development would be spread over
1,800 89-acres of land.
1,600
1,400 On the retail front, Indore already has a number of national and international brands. Treasure Island
1,200 (0.6 mn.sq.ft.), located on MG Road, was the first organised retail format in the city. Another mall,
Rs./sq.ft.
1,000 Mangal City (0.25 mn.sq.ft.) located at Vijaynagar Chowk has multiplex chain, R-Adlabs, as its anchor
800 tenant. With several prominent retailers considering venturing in the city, retail industry has great prospects
600 ahead in the city. Notably, Mumbai-based K Raheja developers are coming up with a hypermarket on
400 11-acres of land around the Bypass. Besides, a number of national level multiplex operators have also
200 announced their entry into the city.
0
Palasia
Race course Road
MR 10
Currently the existing retail space in Indore is approximately 0.86 mn.sq.ft. Around 1 mn.sq.ft. of new retail
space is expected to enter the market in the next few months. About 4-5 malls are in the pipeline and it is
expected that by 2009 approximately 3 mn.sq.ft. of retail space will be operational in the city.
Locations Rental and Capital Values

Capital Values
Existing offices in Indore are located in mixed-use format developments which have retail spaces on lower
Source: Knight Frank Research one/two floors and two/three floors above as office floors. Currently, the rental values for such spaces range
from Rs.20-22/sq.ft. per month while the capital values are quoted at Rs.5,000-5,500/sq.ft. Capital values
for office space have appreciated over 100% in the past year.
With the increase in demand from the middle class segment of the city, the residential rates in the prime
locations of the city have witnessed an appreciation of 10-15% in the past two years. Currently, the prices
quoted for a high-end apartment exist within the range of approximately Rs.1,300-2000/sq.ft.
The retail market in the city is on a growth curve. While majority of the highstreet retail is concentrated
within the city, new mall developments are taking place on the outskirts of the city. At present, the retail
rentals prevalent in the CBD of the city range between Rs.40-80/sq.ft. per month.
Outlook
Indore is undergoing fast paced infrastructure development to match the future demand from various
sectors. The state government along with local authorities is taking several initiatives to promote Indore as a
premier destination for IT/ITES companies in Central India. Indore is on the radar of a number of IT
companies including Wipro and TCS. Developers like K Raheja and Unitech have already been allotted land
in the proposed IT SEZ. It is, therefore, implicit that Indore is about to witness hectic activity on the IT front
in the coming years.
Figure 33
The city is also expected to have a large influx of people in the next few years because of the job
Retail Market Values opportunities generated by the upcoming IT Parks. As a result, demand for housing will increase to
90 8,000 accommodate the incoming population. The demand is expected to be conveniently met by supply as a
80 7,000 number of integrated townships are underway in the Indore Bypass region. The increasing population will
70 6,000 also have a positive impact on the retail growth in the city and open up opportunities for modern retailing.
Rs./sq.ft.per month
60
5,000
Rs./sq.ft.
50
4,000
40
3,000
30
20 2,000
10 1,000
0 0
MG Road
AB Road
Vijaynagar Chowrah
Locations

Goa
Overview
The state of Goa, located along the western coast of the country, is a foremost tourist destination of the
country. A steady growth of tourist inflow, both foreign and domestic, has resulted in the state achieving
one of the highest per capita income in the country.
An erstwhile Portugese colony, Goa is divided into two districts viz. North and South Goa with headquarters
at Panaji and Margao respectively. While Panaji, located in North Goa, forms the administrative capital,
Margao in south is the commercial centre of the state. Over the years, North Goa has witnessed a faster
economic growth, thereby overtaking its southern counterpart. Infrastructure development in the northern
part of the state led to early commercialisation of the region, while gradual regulated development in
South Goa provided the region with a dynamic hospitality industry, a number of five star deluxe hotels
along its coast-line.
Panaji, also the CBD of the region, has a number of government offices located at Patto while
18th June Road comprises the retail segment of the micro-market. Prime residential properties in Goa are
located in Dona Paula, Miramar and Caranzalem along the northern coast, while mid-end apartments are
present in Margao in the south. Being a tourist hub, the retail markets in Goa are largely unorganised and
are located at beach towns of Calangute and Baga.
Patto Plaza, Panaji Myles High Corporate Hub, Panaji
Current Scenario
With a number of initiatives taken up by the state government, Goa is emerging as an IT destination. As a
result, real estate market in the region has picked up considerably in the past year. Several national level
developers, including Delhi-based developers DLF and Parsvanath, have bought large parcels of land in
Goa. Another out-of-town developer, Pune-based Gera Developers, are coming up with their business
centre in the CBD of Panaji.
The state has recently set up an advanced 46-acre IT centre called Rajiv Gandhi IT Habitat at Dona Paula.
Figure 34
Besides housing BPO units, the centre will be engaged in the production of multi-media and entertainment
software. Plots have also been allotted to companies providing infrastructure facilities in the centre.
45 6,000
Another IT park has been proposed at Soccorro in North Goa. Meanwhile, Wipro has acquired 25-acres of
40
5,000 land adjacent to the IT Habitat for its R&D centre.
35
Rs./sq.ft.per month
30 4,000
The government has approved five SEZs in the region, relating to various sectors, viz. gem and jewellery,
Rs./sq.ft.
25
3,000 pharma, biotechnology, IT and services. Mumbai-based developers Raheja and Peninsula Group, along with
20
pharma companies like Cipla, have been allotted land for developing common infrastructure. At present,
15 2,000
Verna Industrial Estate houses a number of MNCs like Siemens, Cipla and Dlink.
10
1,000
5
Goa has a number of office developments coming up in the next few years. Majority of the developments
0 0
are clubbed with retail component on the ground floor. While Atria (30,000 sq.ft.) at Mapusa is a mix of
Panaji
Margao
retail and office, Crossroads Avenue at Margao will have a mix of office, retail and residential units.
Currently, high-rise office developments like Dempo Plaza and Myles High Corporate Hub are limited only
Locations
to Panaji.
www.knightfrank.com
Figure 35
The residential property market in Goa is on an upswing. While villas and bungalows along the coast are
Residential Market Capital Values preferred by the premium segment, demand for multi-storied apartments is also on the rise. Most of these
3,000
residential developments have come up in Dona Paula and Miramar. Dynamix Group of Mumbai has a
140-acre residential township at Bambolim which offers high-end villas, bungalows and apartments. The
2,500
project will also have a five star resort by 2008. Random residential development is also noticed at Dabolim
2,000 in the south and in northern locations of Calangute, Mapusa, Caranzalem and Taleigaon. Panaji, which
comes under EDC (Economic Development Corporation) regulations due to its heritage status, has a
Rs./sq.ft.
1,500 restricted development. Consequently, Porvorim has come up as a satellite township to the saturated Panaji
residential market.
1,000
500
Retail markets in the state, although highly fragmented, are gradually becoming more organised. While
mall developments are yet to come up, a number of multi-storied shopping centres are underway in Goa.
0
Two retail developments Osia Mall and Profit Centre are coming up in Margao, totaling to about
Panaji
Dona Paula
Calangute
0.1mn.sq.ft. of retail space. Coastal towns of Candolim and Calangute have well developed highstreets
housing some high-end brands. Panaji already has large retailers like Vishal Megamart at 18th June Road.
Locations Currently, land has become a scarce commodity in the Goa real estate market. Till a few years back, flawed
Capital Values policy framework permitted foreign nationals to invest in local property but with recent reformed policies,
Source: Knight Frank Research restrictions have been set. In South Goa, most of the coastal land near Margao has been sold out in the past
two years. Short supply of land has led investors towards the Goa-Maharashtra border in the north.

New found interest and increasing demand has led to considerable price appreciation in the past few years.
Since 2003, prices have increased by as much as 300% in specific residential projects. Currently, the
average cost of an apartment in the prime locations of the state ranges between Rs.1.5-1.8 million while
high-end villas cost about Rs.30 million. In locations like Dona Paula and Miramar, the capital values quoted
by residential projects are in a range of Rs.1,400-2,800/sq.ft. The residential market of Calangute, while
highly saturated, has capital values rising to about Rs.1,850.
Although the office market in Goa is still at a nascent stage, developments in Panaji with office space charge
rental values of Rs.40/sq.ft. Retail rates in highstreets at Panaji are quoted at around Rs.9,300 while shops in
locations like Margao and Mapusa quote rates of Rs.5,500-11,500/sq.ft.
Outlook
The government of Goa has proposed a number of plans to develop the state's infrastructure and thereby
attract investment in various sectors. It has already initiated steps to have a Convention Centre at Dona
Paula which will further the entry of corporates to the state. With the setting up of the Rajiv Gandhi
IT Habitat and the SEZs, an increasing number of job opportunities will be created which will further
enhance the economic condition of the region.
The capital city of Panaji is set to undergo major infrastructural development and Rs.700 million has been
Figure 36 earmarked by the government for the purpose. Panaji will also witness hectic real estate activity in the
Retail Market Values forthcoming years as a number of national level developers have secured land here for their projects.
70 12,000
Residential property market in the state will continue its upward trend with an increasing number of NRIs
60 10,000 and High Networth Individuals expressing their interest in sea-facing villas and apartments in the region.
Rs./sq.ft.per month
50
8,000
Moreover, the hosting of the International Film Festival of India (IFFI) in Goa is also expected to boost
different sectors of the state, thus providing further impetus to the real estate market.
Rs./sq.ft.
40
6,000
30
4,000
20
2,000
10
0 0
Panaji
Margao
Mapusa
Locations

Figure 37
Office Market Values Visakapatinam

30 3,500
25 3,000 Overview
2,500 Visakapatinam, popularly known as Vizag, is an important port city of India. It is recognised as the
20
fifth-fastest growing ‘Industrial Metropolis’ in the Asian subcontinent and the fastest growing industrial city
Rs./sq.ft.
2,000
15 on the East coast of India.
1,500
10
1,000 From being a city of ancient and historical significance, having port-based development until the late
5 500 1970s, the city witnessed rapid industrialisation with the onset of major industries viz., oil refinery, private
0 0 sector fertilizer factory, Hindustan Zinc Smelter and Visakapatinam Steel Plant. In recent times
Visakapatinam is gaining significance as an emerging IT/ITES destination.
Dwarka Nagar Road
Hanumanthawaka Road
Siripuram Junction
CBD locations of Dwarka Nagar Road and Dabagarden Road have mixed use development comprising
office and retail space. Retail segment dominates the commercial activity in the city. In the last decade,
development of residential projects in New Central locations along the coastline like RK Beach Road,
Pandurang Puram, East Point Colony and MVP Colony, is being witnessed. The state as well the city
Locations administration has made concerted efforts to make Visakapatinam an important economic development
hub for sectors like ITES, pharmaceutical and biotechnology, production of consumer goods and ancillary
industries.
HSBC, Siripuram Junction Residential development, Beach Road
Current Scenario
Over the past 3-4 years, here has been a notable increase in the number of new economy companies
Figure 38
seeking to enter the city. Quality of life, low cost of living, relatively inexpensive real estate, several planned
infrastructure development projects and a proactive government has attracted several national and
Residential Market Capital Values
international corporates. Rising interest from the IT/ITES sector will be a key real estate driver for the city.
3,000
The city CBD lacks Grade-A development and mainly caters to the banks, telecom and other office
2,500
segments. The off-CBD locations include Hanumanthawaka Road, Jail Road, Diamond Park Road and certain
2,000 parts of Station-approach Road. A number of Grade-A developments are coming up in these off-CBD
locations mainly for the IT/ITES segment Some notable developments in this region include projects by
Rs./sq.ft.
1,500 Wipro and Satyam. The suburban locations include Siripuram Junction, Waltair Uplands and other
1,000
neighbouring areas. A number of integrated and campus-style developments are coming up in the
peripheral locations of the city, including projects by Jurong, Beach Layout and Sunny Isle. Currently there is
500 an IT park at Rushikonda, in the outskirts of the city.
0
Visakapatinam is currently witnessing a surge in retail activity. Almost all the major brands have their
RK Beach Road
Seetammadhara Colony
Rushikonda-Madhurawada
presence in the market while several leading retailers are vying for prime retail space. Retail highstreet in
Vizag include the Fort and its adjoining locations, Town Main Road and Raja Ram Mohan Rai Road.
AVN College Road constitutes the traditional commercial market, with a mix of both office and retail space.
Organised retail developments in the city are located at Jagdamba Junction and Madillapallem Junction.
Some of the important retail projects underway are Vizag Central and CMR Mall. Parts of Station-approach
Road and Waltair-approach Road will witness substantial increment in Grade-A supply. Developments along
Locations
Hanumanthawaka Road extending to Jail Road and Diamond Garden Road also cater to demand for retail
Capital Values
space.
www.knightfrank.com
Figure 39
The residential markets comprise the Fort region, Town Main Road, Raja Ram Mohan Rai Road and
Retail Market Values AVN College Road. The New Central location is considered as an upcoming residential market due to its
120 16,000 proximity to the to the city centre. The peripheral locations of the city include Seetammadhara Colony,
14,000 TPT Colony, Akireddipalam and Madhavdhara. Other peripheral locations like Madhurawada, Rushikonda,
100
Gajuwaka and Vizianagaram have a number of Grade-A Gated Commercial Integrated Development type of
Rs./sq.ft.per month
12,000
80 10,000 projects coming up.
Rs./sq.ft.
60 8,000
6,000
40
4,000
20 2,000 In the last two years, property prices in Visakapatinam and VUDA region have escalated by around 35%.
0 0 Majority of the demand has emanated from employees of local and Hyderabad based IT/ITES companies,
Dwarka Nagar Road
Hanumanthawaka Road
Siripuram Junction
local affluent business community, and upwardly mobile market segment from other sectors.
Office market values have increased substantially in various locations across Visakapatinam in the past
3-4 years. While the current rental values in the CBD of Dwarka Nagar is about Rs.25/sq.ft. per month,
capital values are quoted at an average of Rs.3,000/sq.ft. On the other hand, in off-CBD location like
Hanumanthawaka average capital values are Rs.2,650/sq.ft. and rental values are at of Rs.22/sq.ft.
Locations per month. Other locations like Siripuram Junction command capital values in the range of
Rs.2,200-2,600/sq.ft. while rental values are in the range of Rs.18-22/sq.ft. per month.
The surge in land values has been reflected in the rise in apartment prices across Visakapatinam in the past
2-3 years. Residential projects on RK Beach Road command capital values of Rs.2,600-2,800/sq.ft. while
Seetammadhara Colony has values existing at an average rate of Rs.2,000/sq.ft. Peripheral locations of the
city like Rushikonda-Madhurawada have residential properties capital values in the range of
Rs.1,400-1,800/sq.ft.
Retail markets in the city have seen considerable rise in values in the recent past. In locations of Dwarka
Nagar capital values of retail space are in a range of Rs.12,000-16,000/sq.ft. while rental values are at an
average of Rs.100/sq.ft. per month. Suburban retail markets of Hanumanthawaka Road command rental
values of Rs.80/sq.ft. per month and capital values are charged at Rs.11,500/sq.ft. Meanwhile,
Siripuram Junction has capital values of Rs.8,600/sq.ft with retail space being leased at an average value of
Rs.60/sq.ft. per month.
Outlook
A new international airport in neighbouring city of Hyderabad, upgradation of the domestic airport at
Visakapatinam to international standards, a new container terminal facility for the Visakapatinam port etc.
will accelerate growth in the city. Demand for commercial developments in Visakapatinam is expected to
increase in the forthcoming years. Most of the major commercial developments are expected to cater to the
needs of the IT/ITES sector. Majority of the developments coming up will be campus-style projects.
Residential development in the region is also expected to receive a boost from the IT/ITES sector. End-user
driven purchases will increase as new industrial and infrastructure development projects like APSEZ, VSEZ,
Pharma City, Apparel Park, etc. become operational. Most of the major residential developments are
expected to follow the 'gated community' pattern, as it will offer integrated, self-contained and balanced
development.
Mysore
Overview
Mysore, the second largest city in the State of Karnataka is located 135 kms from Bangalore, the state
capital. The city is gradually evolving in to an alternate destination for Information Technology investments.
Mysore is also an important educational, commercial and administrative centre, and thus has a high literacy
rate of 84.5%, which is greater than the state average.
During the last few years, the city of Mysore has been witnessing unprecedented growth in real estate, with
a large number of housing cooperative societies having secured land for development of residential
colonies. Historically, the city has grown in a radial manner with arterial roads starting from the city palace
and running radially to other parts of the city. This resulted in residential and commercial developments
coming up along these roads. Notably, Mysore is the only city of southern India which has received heritage
funding under the 'Jawaharlal Nehru National Urban Renewal Mission'.
The CBD of the city comprise of the areas around the Mysore Corporation office along the main roads of
Krishnaraja Circle and Devaraj Urs Road. These locations mostly house commercial developments. On the
other hand, locations like Devaraja Market and Regulated Market comprises a relatively large portion of the
retail sector. Dhanvantri Road, Ashoka Road, Kalidasa Road, KT Street, Mannars Market and Santhepet can
be considered secondary retail locations.
Residential pockets are scattered all across the city and its outskirts. Multi-storied apartments in Mysore
primarily exists in Jayalaxmipuram, Vontikoppal, Yadavgiri, Laxmipura, Vijaynagar, Gokulam, KRS Road in
the north and Kuvempunagar, Lalith Mahal, Visweshwaranagar, Nanjungud, JP Nagar towards the south.
Figure 40
Office Market Values Infosys, Hebbal Industrial Area

60 5,000
50
4,500 Current Scenario
4,000
Rs./sq.ft.per month
3,500 In recent years, the city has been on the radar of prominent IT companies like Infosys, Wipro, Mphasis and
40
First American Corporation who are scouting the place for their expansion plans. Infosys already has a
Rs./sq.ft.
3,000
30 2,500 training centre in Mysore while Wipro has acquired land to develop a facility in the city. The migration of
2,000
20 IT companies to Mysore due to its proximity to Bangalore and the upsurge in retailing are instrumental in
1,500
1,000
driving the major property developers to the city. Yet another factor is the improvement in connectivity
10
500 with Bangalore. The Nandi Infrastructure Corridor Enterprise (NICE) has resulted in a spate of new
0 0 developments as the commuting time to Bangalore will be reduced considerably.
CBD
SBD
Real estate prices are escalating with projects being planned to meet the current and future demand. Due
Locations
to the availability of land at relatively competitive rates, a number of Bangalore-based developers have
entered the real estate market of the city.
www.knightfrank.com
Figure 41
Besides Brigade Group and Sankalp who already have projects ongoing in Mysore, other leading developers
Residential Market Capital Values like Sobha and Purvankara are considering setting up their residential projects in the city as well. Local
3,000
players are also working on strategies to promote Mysore as a second home to individuals and corporates in
Bangalore. Apartment culture, with the influx of IT/ITES professionals, has gained momentum. Developers
2,500
are coming up with modern lifestyle residences in prime locations of the city. Besides, with good land
2,000 options available in the suburban and peripheral locations of the city, there is immense potential for
residential projects in terms of plotted developments and high-rise apartments.
Rs./sq.ft.
1,500
Commercial and industrial developments are taking place in the northwest of Mysore, presently known as
1,000
the Karnataka Industrial Area Development Board (KIADB) location. Major campuses already existing in this
500
location include Infosys, Larsen & Toubro Infotech, Wipro and Software Paradigm India (SPI). In addition to
this, Mysore houses many non-IT companies like Reid & Taylor, L&T Electronics, S Kumars, Kirloskar
0
Gensets, Bharat Earth Movers Ltd, Venlon Polyster etc. The city's growing attractiveness as a commercial
Jayalakshmipuram
Yadavgiri
Kuvempunagar
and an IT destination offers vast potential for developing the city as a major commercial and industrial work
place.
Presently, the city has not seen much development on the retail front, but with an increase in population,
Locations there exists significant potential for retailers. A number of mall developments are currently in the pipeline
Capital Values and private developers such as Sankalp, Brigade, Premier Properties and Mittal Builders are developing mall
Source: Knight Frank Research space of about 1.7 mn.sq.ft. over the next two years.

The capital values for prime residential property in the city are in the range of Rs.2,000-3,000/sq.ft, while
the residential projects in the suburban locations are quoted in the range of Rs.1,400-1,900/sq.ft.
Developments of villas are being proposed in Koodanahalli and Nanjangud. The average prices quoted for
villas are about Rs.3,000/sq.ft.
Rentals for office space in the CBD of the city are charged at Rs.46-51/sq.ft.per month while capital values
exist at Rs.4,500/sq.ft. In suburban locations, office space rentals are within a range of Rs.25-30/sq.ft
per month and capital values are charged at Rs.2,500/sq.ft.
Retail space values have witnessed considerable appreciation in the past year. While average rental values in
the retail markets in the CBD of the city exists at Rs.55/sq.ft. per month, capital values have risen from
Rs.400/sq.ft. to a current range of Rs.1,000-1,500/sq.ft.
Outlook
With real estate cost rising in established Tier I cities, many corporates are turning their attention to the
Tier II and Tier III cities. Mysore provides a good alternative with easy availability of land and growth
potential. Mysore is expected to emerge as an extension of Bangalore and this has led many investors to
eye the city's real estate market.
Figure 42
Retail Market Values Mysore Urban Development Authority (MUDA) is actively pursuing its efforts to expand the city in a
60 1,600 planned manner. A number of infrastructural projects, viz. the completion of the Bangalore-Mysore
1,400 expressway, upgradation of the existing airport and doubling of the Bangalore-Mysore railway track, are
50
expected to boost the city's growth. According to industry sources, once the commuting time between
Rs./sq.ft.per month
1,200
40 Bangalore and Mysore is reduced, the scope for office market development will increase in the city in the
1,000
Rs./sq.ft.
30 view of increasing number of corporates planning to expand their operations in Mysore.

800
600
20
400
10 200
0 0
Devaraja Market
Ashoka Road
Kalidasa Road
Locations

Figure 43
Office Market Values Coimbatore

30 3,000
25 2,500
Overview
Coimbatore is a key industrial town of South India and has been announced as the second most preferred
20 2,000
IT destination in Tamil Nadu after Chennai. Several private sector initiatives in the city have contributed to
15 1,500 Rs./sq.ft. an increase in real estate activity in the region.
10 1,000
Since commercial establishments already have their presence in the CBD of the city, located at the heavily
5 500 congested RS Puram and Race Course Road, new business and commercial locations have been encouraged
0 0 to set up along major corridors towards the outskirts of the city. Mid-end residential developments are
located in Ram Nagar, Sai Baba Colony, Avinashi Road, Trichy Road and Mettupalayam Road. With a
Avinashi Road
Peelamedu
growing urbanisation rate, the city's populace has started preferring apartments over independent houses.
The city, possessing a strong textile base, has its traditional retail markets in locations of Oppankara Street
Locations and Cross Cut Road where both wholesale and retail businesses are conducted. On the other hand,
unorganised highstreet retail markets are located in and around the residential locations of Avinashi Road,
Race Course Road and 100 Feet Road.
Jaya Enclave, Avinashi Road Tristar Residence, Avinashi Road
Current Scenario
After a prolonged spell of stagnation, commercial property in the city is showing definite signs of
improvement. This stems from the general expectation that the city is on the threshold of becoming the
next IT/ITES destination in the state.
Though at present Coimbatore does not have much commercial space available, a number of proposed
developments are coming up along the Avinashi Road, the prime growth corridor of the city. By end-2009,
approximately 5 mn.sq.ft. of new space, comprising office and IT/ITES, will enter the Coimbatore market.
Figure 44
Amongst the upcoming developments, is the Singapore-based Jurong Group's 35-acre project on
Residential Market Capital Values Perur Road for a proposed IT campus together with residential facilities. The Salzur Group, in association
4,000 with a US-based consulting service provider, is also planning to develop a 100,000 sq.ft. IT park. Wipro has
bought land for their proposed campus at a south-west location of the city, while other IT majors like TCS
3,000 and Cognizant, who already have their training centres in the city, are planning to launch new facilities.
Rs./sq.ft.
There has been considerable development and investment in the residential property market in past few
2,000
years. According to estimates, approximately 3,000 residential tenements are under construction. Out of
that, approximately 50 housing projects are under implementation by the organised players in Coimbatore.
1,000
In upmarket locations like Race Course Road, there has been a perceptible trend of redeveloping the
0
existing bungalows to apartment-style developments. In the forthcoming years, Avinashi Road will emerge
as an important residential location as majority of the projects, are being undertaken here. Other major
Avinashi Road
Race Course Road
RS Puram
developments are underway on the Trichy Road and Mettupalayam Road where many developers are
holding land parcels.
Locations
Capital Values
www.knightfrank.com
Figure 45
On the retail front, the city is gradually witnessing the onset of mall format development. Around five malls
Retail Market Values with a built up area of approximately 2 mn.sq.ft. are scheduled to be operational in the next 2-3 years.
Zee's Essel Group has acquired land parcel at Peelamedu, Avinashi Road, to develop a retail format called
30 3,000
Forum along with a multiplex and Food and Entertainment Centre (FEC). Brookefields Developers are
25 2,500 developing a 300,000 sq.ft. mall on the erstwhile Brook Bond factory on Krishnaswamy Road, which will
house a multiplex and is scheduled to be operational in 2007. The Surat-based developers Daga Brothers
20 2,000
will undertake another mall coming up on the Avinashi Road stretch. Further, E-city Ventures has plans to
Rs./sq.ft.
15 1,500 develop a multiplex on a 3.5-acre plot along the Coimbatore-Tirupur Link Road. Besides these, several other
national level developers are scouting for appropriate location to set up their retail establishments.
10 1,000
5 500
0 0
The real estate market in the city is upbeat with substantial development activity taking place across the
Avinashi Road
Race Course Road
DB Road
city. Over the past year the rental values for commercial/office space have seen an appreciation of around
20%. At present, the rentals in prime commercial locations of Avinashi Road are estimated at
Rs.20-25/sq.ft. per month.
Residential values in the prime locations of the city had significant appreciation in the past two years.
Locations
Capital values of Grade-A residential developments in Race Course Road, RS Puram and Avinashi Road
witnessed an increase of 25-30% over the last year, quoted currently at a range of Rs.2,500-3,500/sq.ft.
Retailing is on the upswing in the city with rental values touching Rs.20-28/sq.ft.per month in prime retail
markets. The organised retail developments coming up on the peripheral locations are expected to charge
rental values of Rs.75-80/sq.ft. per month.
Outlook
With the state government patronising Coimbatore, the city is set to steer in IT/ITES in to the sphere. The
Electronics Corporation of Tamil Nadu Limited (ELCOT) has acquired 30-acres of land on Avinashi Road.
This has obtained SEZ status and is currently awaiting investors and other paperwork to push it forth for
promoting IT. Upcoming residential locations such as Ganapathy, Mettupalayam and Trichy Road will have
high demand once the IT SEZ becomes operational. Besides, ELCOT also owns 109-acres in Bharathiar
University and plans are afoot to develop another IT park. These developments will entail for increased
demand for housing, retail space and entertainment avenues.
A number of township developments are coming up in the peripheral locations of the city to counter the
residential demand. Sahara City has earmarked 125-acres on Sathy Road near Sarvanampatti for their
township development while Dubai-based Pegasus Realty has identified Coimbatore as one of the cities in
South where it plans to invest in real estate. This has generated interest in other large developer groups to
invest in townships in Coimbatore.
The real estate boom witnessed in Coimbatore is expected to be sustainable at least for another five years
due to the fact that it has been propelled by a genuine, end user demand.
Figure 46
Office Market Values Kochi

60 6,000
50 5,000
Overview
Rs./sq.ft.per month
4,000 Kochi, formally known as Cochin, is the commercial capital of Kerala and has been an important port and
40
naval base of India. An upcoming cosmopolitan city, Kochi has India's only operational private sector
Rs./sq.ft.
30 3,000
international airport.
2,000
20
With improving infrastructure and changing regulatory measures, the real estate market has become more
1,000
10 organised. Real estate sector in the city is on a growth path with perceptible demand for residential and
0 0 retail projects as well as for IT/ITES space.
Kakkanad
MG Road
Marine Drive
The CBD and off CBD locations of MG Road, Chittoor Road, Banerjee Road, Marine Drive and the
connecting roads and lanes are witnessing heightened real estate activity. As a result of saturation and space
crunch in these locations focus has now shifted to the suburban locations of Kakkanad, Kalamessary,
Locations Edapally, etc.
Leela Infopark, Kakkanad Residential development, Off NH-47
Current Scenario
Kochi is a major tourist destination and also acts as transitional city to all the major tourist spots in Kerala.
With growth in medical tourism, eco-tourism and IT/ITES sector, the city has emerged as an important
investment hub of south India.
Residential demand has been rising on the back of increasing IT/ITES sector activity in the city. MG Road
and Marine Drive are the prime residential locations where sea facing apartments command a premium.
New residential developments are coming up in the suburbs of Kakkanad, Edappally,Thripunithura, Alwaye,
Ankamali, Kalamssery, etc. The demand for residential space is quite strong and has induced national level
players like Puravankara, Shobha, Brigade Group, DLF, Prestige and Dubai based Emaar Groups to join the
Figure 47 bandwagon.
Residential Market Capital Values MG Road is the prime retail location and has commercial complexes which combine both retail and office
6,000 space. Retail activity has also spilled over to the adjacent locations of Bannerji Road and Marine Drive.
Marine Drive is more of a convenience shopping location but some prime malls, commercial complexes and
5,000
luxury residential complexes are being developed here. Kochi is becoming an important retail destination of
4,000 South India and close to 5 malls are coming up in the city, mainly in the suburban and peripheral locations.
Rs./sq.ft.
A number of malls including Aeren's Gold Souk and Lulu Centre are under-construction on the NH-47
3,000
bypass.
2,000
The growth of Kochi as a preferred Infotech Sector destination has lead to the development of
1,000 Thrikkakara- Kakkanad belt . Several IT and ITES related developments like the Info Park by Kinfra ,
Cochin Special Economic Zone and the Dubai Smart City are being developed here. The completion of the
0
Airport-Seaport Road, which passes through this area, has eased transportation. The other IT developments
Marine Drive
Kakkanad
Kalamessry
in Kakkanad IT corridor are Technopolis by Muthoot Group (350,000 sq.ft.) Leela Info Park by Leela Group
(500,000 sq.ft.) Tech Park by L&T (550,000 sq.ft.)
Locations
Capital Values
www.knightfrank.com
Figure 48
Capital and Rental Values
Retail Market Values
Residential sector in Kochi has seen remarkable growth over the last few months. Locations like Kakkanad,
140 14,000
Edapally, Thripunithura and Marine Drive are emerging hot spots. Marine Drive, where capital values were
120 12,000
in a range of Rs.1,500-2,000/sq.ft. a year back, are now at Rs.5,000-6,500/sq.ft. and are expected to
Rs./sq.ft.per month
100 10,000
appreciate further. Suburban locations of city offer flats at a capital value of Rs.1,800-2,000/sq.ft. where as
Rs./sq.ft.
80 8,000
budget apartments are available in a range of Rs.1,200-1,500/sq.ft.
60 6,000
40 4,000 IT/IES sector is just taking off in Kochi and as such the rentals commanded by developments catering to
20 2,000 such activities are comparatively lower than those in the other cities. Rentals in Infopark are in the range of
0 0 Rs.22-30/sq.ft. per month. The rentals for ground and first floor commercial space on MG Road are in the
range of Rs.40-50/sq.ft. per month and for upper floors are Rs.30-35/sq.ft. per month. Average rental of
NH-47 Bypass
Marine Drive
MG Road
commercial space in Marine Drive are reported to be in an range of Rs.35-45/sq.ft. per month.
Organised retailing or malls is a fairly new phenomenon. Mall space is being chiefly offered on sale and the
Locations capital values range between Rs.8,500-12,000/sq.ft. On the other hand rental values of retail space are
Rental Values Capital Values quoted in range of Rs.90-125/sq.ft. per month.
Outlook
Availability of skilled manpower coupled with lower operational costs are the prime features that have
attracted IT/ITES companies to the city. The Kerela Government is looking at attracting IT/ITES sector
interest through the up-gradation of support infrastructure in transport, water supply and other civic
amenities and through supportive policies.
With Kochi emerging as a preferred choice, real estate scenario looks buoyant for office space development
as well as in quality residential and retail space development.
Summing Up
The study and analysis of the emerging growth centres of India has brought in to light several interesting
facts. For arriving at the most attractive destination from among the 15 cities presented in this report, an
analysis of five key parameters was undertaken. These parameters, as presented below, were selected on the
basis of key decision making factors that are taken into consideration while choosing a location over
another. Each of these parameters were further divided into sub-parameters and weights were assigned to
each of them. The weights assigned were in accordance to the relative importance of these variables in
determining the future attractiveness of a location.
Real estate - In today's scenario, real estate is a major determinant of the general attractiveness of a city.
Sub-parameters like real estate cost, availability and outlook were the variables considered here. These
variables are decisive factors behind a corporate as well as an investor’s plan to enter a city. Cost
advantages have been seen to tilt the scales in favour of a Tier II or Tier III city, away from the established
Tier I cities of the country. While high real estate cost in a city may bring down the attractiveness, good
availability of real estate and positive outlook may push up the rating of that particular city.
People - People form the foundation of a city's strengths. Market potential of a city depend upon several
people factors like decadal growth, purchasing power of the population as well as the literacy rate. These
sub-parameters depict whether a city has the requisite catchment for retail success, as a city with high
decadal growth and purchasing power would also denote a strong consumer base. Besides, a city with
high literacy rate would score well as literacy is a reflection of general awareness level of the city
populace.
Physical infrastructure - The presence of quality physical infrastructure in a city bears importance as poor
infrastructure could increase costs, thereby negating the cost advantage of locating in a Tier III city.
Sub-parameters like road and air connectivity entail logistical advantage, easy commutability and a better
set up for the organisations to conduct their businesses. Further, other sub-parameters like the telecom and
power supply situation of a city provide the basic amenities to an IT/ITES establishment. These factors act
as cost variants and affect the general attractiveness of a city.
Social infrastructure - The social infrastructure of a city is also acknowledged as one of the key decisive
factors in a city selection exercise. Many corporates are driven by cost constraints and prefer to locate to
cities with lower cost of living. Therefore, the sub-parameter of cost of living could take up or bring
down the overall attractiveness of a city. Presence of quality educational institutes is another important
sub-parameter and implies a qualified workforce in the region. Besides, it also provides employees with an
incentive for relocating their families when a transfer to that particular location is proposed. Other social
sub-parameters like hotels and entertainment avenues act as business support facilities.
Business environment - Congenial business environment of a city is important for the smooth
functioning of an organisation. Sub-parameters of progressive government policies and positive state of
economy of a city score high on the overall general attractiveness of a city. The investment scenario of the
city is another important sub-parameter to determine the optimism in the business environment. These
factors also determine the efficiency of conducting business in a particular city.
Our study reveals that currently Chandigarh leads the way on the real estate front, owing to its ready
availability of quality residential and office space with good prospects for future development. Kochi,
witnessing hectic real estate development and being actively promoted as an IT/ITES destination by the
state government, follows Chandigarh. Cities of Bhubaneswar, Ahmedabad, Nagpur and Mysore are next
and rank equally on this parameter. This implies that all these four cities are evolving real state destinations
and poised to take a quantum leap ahead. Guwahati and Surat score low on the real estate parameter as
real estate development in both the cities is still in the infancy stage.
www.knightfrank.com
Table 2 - City Ranking

City Name Real Estate People Physical Infrastructure Social Infrastructure Business Environment
Chandigarh 1 2 1 7 1
Ludhiana 7 3 3 7 8
Lucknow 5 5 4 5 6
Guwahati 8 3 5 5 8
Bhubaneswar 4 1 4 4 4
Jaipur 5 6 2 2 4
Ahmedabad 4 1 4 3 4
Surat 9 3 6 6 7
Nagpur 4 1 1 5 3
Indore 6 2 6 5 5
Goa 5 4 2 1 3
Visakapatinam 3 4 2 3 2
Mysore 4 3 5 4 3
Coimbatore 7 4 4 7 4
Kochi 2 2 3 3 3
Nagpur, Bhubaneswar and Ahmedabad jointly share the top rank on the people parameter. While Nagpur
and Ahmedabad have populace with high purchasing power and literacy rate, Bhubaneswar ranks high on
population decadal growth and literacy rate. Chandigarh, with its even ratings in the sub-parameters of
decadal growth, purchasing power and literacy, comes a close second along with Kochi and Indore, where
the literacy rate and purchasing power of the average consumer is relatively high. Jaipur on the other hand
ranks low on this parameter, as there has been a marginal increase in decadal growth of population.
In terms of physical infrastructure, Chandigarh and Nagpur have equal ranks as both the cities enjoy good
telecom, power, roads and air connectivity. These cities are closely followed by Jaipur, Goa and
Visakapatinam. Amongst all the 15 cities, Jaipur ranks higher on power and telecom while Goa ranked
relatively higher on road infrastructure. The lowest ranks were shared by Surat and Indore chiefly due to the
constraint faced in terms of connectivity.
Table 3 - Overall Ranking Goa achieved the top rank in terms social infrastructure, owing to its active hospitality industry and the
number of entertainment avenues available in the region. Another tourist destination, Jaipur takes the
City Name Rank
second position though higher cost of living in the city brings down its rank down marginally. Northern
Chandigarh 1
cities of Chandigarh, Ludhiana and southern city of Coimbatore make up the last rank. This is due to the
Nagpur 2
paucity of star-grade hotels and entertainment avenues in these cities. However, these there cities rank
Goa 3 reasonably well on the education front.
Kochi 3
Visakapatinam 4
Chandigarh, with an active state economy and a proactive government, ranks the highest on the business
environment parameter. The city is followed by Visakapatinam which ranks marginally lower on the
Ahmedabad 5
investment front. Ludhiana and Guwahati shared the lowest rank as the government initiatives and weak
Bhubaneswar 6
investment scenario is still to pick up in these cities.
Jaipur 7
Mysore 8 Our study reveals that Chandigarh, ranking the highest in terms of real estate, physical infrastructure and
Indore 9 business environment parameters emerges as the most attractive amongst the 15 emerging growth centers
Lucknow 10 covered in this study. It is followed by Nagpur which ranks well due to people and physical infrastructure
Coimbatore 11 parameters. Surat, although being a city with high purchasing power as well as relatively good physical
infrastructure, ranks the lowest amongst the 15 emerging cities of India currently. This could be attributed
Guwahati 12
to the limited availability of Grade-A real estate development in the city. Low scores on social infrastructure
Ludhiana 13
and business environment have also decreased Surat's general attractiveness as a potential new economy
Surat 14
business destination.
Emerging Growth Centres - Quarter 1 2007 Knight Frank
Research
Knight Frank Research provide strategic advice, consultancy services and forecasting to a wide range
Emerging Growth Centres is of clients worldwide including developers, investors, financial and corporate institutions. All recognise
prepared by Knight Frank the need for the provision of expert independent advice customised to their specific needs.
India Research. Knight Frank Research Reports are also available at www.knightfrank.com
General enquires should be addressed to:
Gulam M. Zia Americas Europe Africa Asia

National Director - Advisory Services
USA UK South Africa China
gulam.zia@in.knightfrank.com
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Tel: +91 22 2267 0876
Fax: +91 22 2267 0899
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Malvika Chandra Germany Nigeria Malaysia
malvika.chandra@in.knightfrank.com
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Sangeeta Sharma Australia Italy Uganda Thailand
sangeeta.sharma@in.knightfrank.com
New Zealand Poland Zimbabwe
Monica Babar Portugal Zambia
monica.babar@in.knightfrank.com
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Amrita Sinha Spain
amrita.sinha@in.knightfrank.com
The Netherlands
Chetanbir Kaur
chetanbir.kaur@in.knightfrank.com © Knight Frank 2007
This report is published for general information only. Although high standards have been used in the preparation of
Maureeta Lopez the information, analysis, views and projections presented in this report, no legal responsibility can be accepted by
maureeta.lopez@in.knightfrank.com Knight Frank Research or Knight Frank for any loss or damage resultant from the contents of this document. As a
general report, this material does not necessarily represent the view of Knight Frank in relation to particular
properties or projects. Reproduction of this report in whole or in part is allowed with proper reference to Knight
Frank Research.
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Knight Frank Emerging Growth Centres - Quarter 1 2007

Emerging Growth Centres

GDP Growth Rate Editorial

Indore, Goa, Visakapatinam,

Office Market Values Chandigarh

Source: Knight Frank Research

Dell facility, Mohali Quark City, Mohali

Source: Knight Frank Research

Office Market Values Ludhiana

4,000 investment destination of the state.

Rental Values Capital Values

Source: Knight Frank Research

Residential development, Agar Nagar Ansal Plaza Mall, Ferozepur Road

* Capital values taken for plotted developments

Source: Knight Frank Research

40 2,000 Rental and Capital Values

Rental Values Capital Values

Rental and Capital Values

Shah Najaf Road

Source: Knight Frank Research

The Cube, GS Road The Hub, GS Road

Rental Values Capital Values

Source: Knight Frank Research

Rental Values Capital Values

Fortune Towers, Chandrasekharpur Forum Mart, Off Janpath

Source: Knight Frank Research

Rental and Capital Values

Cuttack - Puri Road

Rental Values Capital Values

Source: Knight Frank Research

Office Market Values Jaipur

Crystal Court Mall, Malviya Nagar Residential development, C-Scheme

to increased competition for the local developers.

Source: Knight Frank Research

pockets with a price range of Rs.1,450-1,750/sq.ft.

Office Market Values Ahmedabad

GDNR Info City IT Tower, Gandhinagar Piramyd Abhijeet, CG Road

Figure 23 Current Scenario

Office Market Values Surat

Valentine Theatre, Piplod Raj Empire Multiplex, Bhatar Road

Source: Knight Frank Research

MIDC Infotech Tower, Parsodi Inox Multiplex, Vardhaman Nagar

Rental Values Capital Values

Source: Knight Frank Research

Source: Knight Frank Research

Source: Knight Frank Research

Race course Road

Locations Rental and Capital Values

Rental Values Capital Values

Source: Knight Frank Research

Patto Plaza, Panaji Myles High Corporate Hub, Panaji

Source: Knight Frank Research

Rental and Capital Values

Rental Values Capital Values

Source: Knight Frank Research

Office Market Values Visakapatinam

HSBC, Siripuram Junction Residential development, Beach Road

Office Market Values Infosys, Hebbal Industrial Area

Rental and Capital Values

30 view of increasing number of corporates planning to expand their operations in Mysore.

Rental Values Capital Values

Office Market Values Coimbatore

Jaya Enclave, Avinashi Road Tristar Residence, Avinashi Road