RISE IN COMMERCIAL HUBS boosts residential PROPERTY
Commercial hubs with social infrastructure, connectivity, and proximity to one’s work place have been and will continue to be the driving force of residential projects in the vicinity.
Even though revival in residential property is likely to be gradual in the near term owing to limited price appreciation and inability to monetise assets, the commercial segment is becoming a hub for new investments.
Interestingly, growth in residential property is reported to be more in those cities which are registering growth in commercial hubs.
Suresh Castellino, executive national director (capital markets and investment services) of Colliers International India, says: “Given the young population and growth in the country, cities like Pune, Bengaluru, Gurgaon, Hyderabad, and Chennai are registering major commercial developments. This is due to the infrastructure, growing talent pool, and great connectivity to other parts of the country. This growth is facilitating migration of workforce to such cities with large commercial hubs and, hence, these commercial hubs are giving impetus for the local real estate market as the migrants feel comfortable staying closer to their workplace.”
Commercial hubs with social infrastructure, connectivity, and proximity to one’s work place has been and will continue to be the driving force of residential projects in the vicinity.
For example, Hinjewadi and Kharadi in Pune have large commercial hubs which are embedded with social infrastructure, making them a favourable residential market. Also, Whitefield and Kanakpura in Bengaluru, Gachibowli in Hyderabad, New Gurgaon in the NCR, and BKC in Mumbai are registering similar trends.
With the rise in the number of nuclear families, easy availability of finance, repatriation of NRIs and HNIs, and rise in disposable income, housing properties near commercial hubs are gaining a lot of attention from end users and investors.
It is also noteworthy that most overseas companies and large MNCs in the country are trying to consolidate their office requirements. Many are also moving towards the lower rental corridors. Due to such consolidation in recent times, population migration levels across cities are on a high. Migrants prefer walk-to-work culture and take up residential space closer to their workplace. Thus, housing in and around these hubs sees an increase in capital and rental values raising its investment opportunity.
“It must, however, be said that this is not a short-term occurrence; it takes years of infrastructural development to help business districts or commercial hubs aggregate housing markets around themselves,” Castellino says.
“Commercial hubs always boost the surrounding housing market. New Gurugram is an ideal example: the emerging residential hub of the NCR is surrounded by buzzing commercial destinations, complemented by connectivity to all parts of north India, and state-of-the-art infrastructure. This part of the city is seeing a spillover effect with the presence of many MNCs, start-ups, etc. Thus, there has been an increase in working population from the NCR, boosting the residential market,” Anupam Varshney, head of sales and marketing at Vatika Ltd, says.