Over the next three to five years, India’s Tier III cities are likely to be transformed, poised as they are to emerge as one of the most preferred investment destinations for global realty and investment firms. A few years down the road, and these locations that include Jaipur, Coimbatore, Ahmedabad and Lucknow will be unrecognizable in their new Avatars.

Realty sector surveys predict the availability of a requisite talent pool, coupled with low cost real estate will see a growing interest in Tier III cities, with the technology sector seeking to expand operations in these previously untapped locales.

Based on current and expected growth potential, various locations through the country are being classified as mature destinations, destinations that are in transition and those that are emerging.

Metros like Mumbai and Delhi are classified under the mature destination section. Metropolitan in character, so far, Mumbai and Delhi have been traditional business destinations, with a favourable track record in attracting investments. However, factors such as, an increase in operating costs, real estate supply constraints and socio-political risks are beginning to pose potential impediments in sustaining a high growth rate. Commercial real estate growth in Mumbai and Delhi is expected to be range-bound and focused mainly around the suburbs and peripheral areas in the coming years.

On the other hand, Bangalore and Gurgaon can be classified as destinations in transition, offering as they do a large captive human resource potential, availability of quality real estate and operating cost advantages. These then are locations best positioned to attract investments in the coming years. However, it is infrastructure bottlenecks that are the main hurdles in their growth path.

In the emerging real estate destinations, we have Pune, Chennai, Hyderabad and Kolkata, whose growth can be attributed to cost-advantages, well-developed infrastructure, limited real estate supply constraints and city governance. As well, growth here is led by expansion and consolidation of corporates belonging to the IT and ITeS sectors. Though, the number of occupants in these locations is yet, to reach optimum point, these locations continue to feature on real estate investment maps.

As in the economic, commercial and political field, India is undergoing a transformation in real estate, as well! As financial benefits and investments percolate downwards to small towns, cities, mofussils and villages, the dream of planned housing, paved streets, potable drinking water may, no longer remain a distant dream. Real estate builders and developers, while changing the face of Indian real estate, must not forget to keep true to the Indian ethos, while providing town planning in haphazardly built inner cities and towns of India!