By: Ravi Sinha
Track2Realty Exclusive
Integrated township, 5-star hotel, shopping malls, multiplexes, and luxury apartments…backed by the NRI investment Nagpur is fast catching up on the real estate map of India to emerge as the tier I city. Nagpur is witness to a sizeable NRI investment in the property market, with 20 to 25 per cent of bookings in the city originating from the overseas market.
Real estate agents of Nagpur are aggressively marketing Nagpur properties to NRI investors across the globe. The rising demand for residential property in Nagpur by NRIs is spilling over to agricultural and non-agricultural plots on the fringes of the city.
IT and heavy industry are also growing at a parallel pace to push Nagpur to 2nd highest rank in Knight Frank’s list of emerging cities. Service and industry have created enormous employment opportunities, pushing demand for residential and commercial property. Consequently, the city is pulling at the seams, creating new townships and colonies in the north-east, north west and southern ends of Nagpur.
The periphery of Nagpur, especially in the north-west, north-east and southern fringes is witnessing maximum construction activity. The old world charm of Civil Lines has not faded in the wake of new developments, and commands a rate of Rs.3,500 per sq. ft. Ramdaspeth, Dhantoli, Dharam Peth and Shankar Nagar share the same platform, while emerging neighbourhoods of Vardhaman Nagar, Pratap Nagar and Surendra Nagar fetch rates of Rs.1200 to Rs.2000 per sq.ft.
Neeraj Bansal, Director, Risk Consulting, KPMG India says this increase in demand by the NRIs is escalating the property prices of the city beyond a reasonable limit in Nagpur. According to him the city has established itself as the key administrative, business and institutional center for Central India. It is emerging as a preferred educational hub and IT-ITES sector is also coming up at dedicated IT parks near Sadar and Parsodi areas of the city.
“The announcement of the MIHAN (Multi- modal International Hub Airport in Nagpur) project has been one of the key developments in recent times, which is expected to greatly transform the urban structure of the city. The advent of IT industry and flow of FDI investment is booming the realty market of Nagpur. Further, major companies such as General Electric, DLF, Shapoorji Pallonji, Larsen and Toubro, Patni computers, Microsoft, etc; have taken up large parcels of land within the designated SEZ of the cargo hub. This has induced huge demand for both residential and commercial property in the city,” says Bansal.
As in Mumbai, defunct textile mills are throwing up opportunities to builders in Nagpur. The National Textile Corporation offloaded the 1.49 acre Model Mills property on the Main Umrer Road, while the Tata‘s Empress Mills property sale to KSL and Industries has set the ball rolling for a Rs.400 crore investment in an integrated township.
Shopping malls and multiplexes in Nagpur are getting popular as the city gets more consumerist currently 1.8 million sq. ft of mall space has been created. The success of the Poonam Mall in Wardhman Nagar fostered the development of the MHKS Mall in Chaoni, Mangalam Marvel at W.H.C. Road, The Triangle at Kingsway and Inland at Central Avenue.
Of about five lakh properties in Nagpur, 70,000 of these are commercial. Property prices in Nagpur shot up to an astounding 500 per cent in 2006, driven not just by IT and MIHAN, but by a host of NRI investors. NRIs studying the Indian property market have found real estate in Nagpur the most promising amongst emerging cities.
According to a report by global consulting firm Jones Lang Lasalle Ahmedabad, Chandigarh, Indore, Kolkata and Nagpur, the Tier III cities in India are best positioned to emerge as major centres for offshoring activities by IT companies, according to a recent Jones Lang LaSalle report.
The report titled “India – The Next IT Offshoring Locations. Tier III Cities”, which is part of the firm’s World Winning Cities research, highlights these five cities as fulfilling the requirements that IT companies look for, when deciding on offshoring locations, namely availability, costs of labor and real estate, business environment as well as physical and social infrastructure.
Nagpur currently provides a cost advantage of about 15 per cent over Kolkata, which offers a 10 per cent cost advantage over Pune. From a facility cost view, Nagpur and Ahmedabad provide a 25 to 30 per cent cost advantage over Kolkata and Delhi.
