The rising costs of commercial properties in major metropolitan areas have driven the growth of commercial real estate in Tier 2 and Tier 3 cities. This expansion is also fueled by increased entrepreneurial activity and the demand for cost-effective spaces. In an exclusive interview, Mohit Goel, Managing Director of Omaxe Ltd, a prominent real estate company in northern India, discusses the promising prospects of commercial real estate in these cities and shares insights on affordable housing. Here are the key points:
1. Factors Driving Commercial Real Estate in Tier 2 and Tier 3 Cities:
- Enhanced infrastructure, including improved connectivity via new roads, railways, and metro systems.
- Escalating costs of commercial spaces in metropolitan areas, prompting businesses to explore smaller cities.
- Growing entrepreneurial endeavors and the need for budget-friendly office spaces.
- Major retailers and corporations expanding into smaller towns.
- The rise of digitization, e-commerce, and remote work, increasing demand for cost-effective commercial properties.
2. Evaluating Growth Potential in Different Tiers:
- Tier 1 cities offer established markets, higher property values, and developed infrastructure, attracting diverse businesses.
- Recent years have seen increased demand for larger residences and high-end properties in Tier 1 cities.
- Tier 2 and Tier 3 cities present untapped growth potential with improved infrastructure, rising demand, competitive pricing, increased business activities, and the entry of major retailers.
- These cities offer opportunities in both affordable and premium residential and commercial projects.
3. Factors Behind Faridabad’s Resurgence:
- Faridabad’s resurgence is driven by improved connectivity, including the construction of vital transport routes like the FNG Expressway and EPE.
- The KGP Expressway and Manjhawali Bridge have further enhanced accessibility, positioning Faridabad as a modern hub within the NCR.
4. Affordable Housing Amidst Demand and Challenges:
- Affordable housing has significant potential due to substantial unmet demand.
- Rising property prices and limited available land in city centers pose challenges.
- The demand for affordable housing remains strong, especially post-pandemic, emphasizing housing security.
- Government initiatives and innovative approaches by developers can address challenges and meet the demand for affordable housing.
5. Envisioning the Future of NCR’s Realty Sector in 2023:
- 2023 has witnessed remarkable growth in the real estate sector in NCR, with developers launching new projects.
- Solid sector foundations, infrastructure expansion, and investor confidence contribute to this success.
- The future looks promising, with the NCR real estate sector poised to reach new milestones, benefiting end-users and investors.
Overall, the commercial real estate sector in Tier 2 and Tier 3 cities holds great promise, and NCR’s realty sector is expected to continue thriving in the coming years.
