Lucknow, Nagpur, Puri and beyond - Emerging real estate hotspots to watch!

Next wave in Indian real estate: As India progresses towards becoming the world's third-largest economy, emerging cities are set to play an important role in the nation's growth. 

By 2050, the country is anticipated to host nearly 100 cities with populations exceeding one million, supplementing its eight mega-cities. 

Key factors such as infrastructure development, digitisation, tourism, and shifts in the office landscape are expected to drive the next wave of urban expansion.

Top real estate hotspots

Amritsar, Ayodhya, Jaipur, Kanpur, Lucknow, Varanasi Patna, Puri  Dwarka, Nagpur, Shirdi, Surat  Dwarka, Nagpur, Shirdi, Surat, Coimbatore, Kochi, Tirupati, Visakhapatnam  Indore  are 17 high-impact emerging real estate hotspots according to Colliers.

These 17 high-potential cities will experience growth across multiple real estate asset classes. This growth is attributed to infrastructure development, which remains a key catalyst for balanced real estate expansion, and evolving work models that will drive commercial and residential activity in smaller cities.

Additionally, the rise of spiritual tourism, digitisation, and workstations are anticipated to spur growth in alternative assets such as senior living, data centres, and second homes.

Where will India's real estate boom? 

Amritsar, Ayodhya, Dwarka, Puri, Shirdi, Tirupati, and Varanasi are emerging as significant centres for residential, retail, hospitality, and senior living developments. 

These cities are focusing on creating vibrant living environments supported by robust commercial and recreational facilities. 

Coimbatore and Indore are prominent for their mix of office spaces, residential complexes, and warehousing facilities, catering to growing urban populations and business needs. 

Jaipur joins them with a blend of office spaces, residences, and warehousing, enhancing its stature as a business hub. 

Kanpur, Kochi, Lucknow, Nagpur, and Patna are pivotal for warehousing solutions, bolstered by retail and data centre expansions to support evolving logistics and technology demands. 

Surat and Vishakhapatnam are driving residential growth alongside warehousing facilities and data centres, leveraging strategic locations for economic development and urban expansion. 

These cities exemplify diverse developmental focusses, contributing to their respective regions' economic landscapes with tailored infrastructure and amenities.

Key growth catalysts

Enhanced connectivity and increased manufacturing activity, driven by flagship infrastructure projects under the National Infrastructure Pipeline (NIP) and PM GatiShakti, will facilitate the dispersion of growth centres beyond Tier I cities.

This will boost the economies of smaller towns, triggering real estate activity, especially in warehousing and residential segments. 

Supportive environments for the development of factories and MSMEs will further increase warehousing requirements across emerging hotspots within infrastructure corridors.

The rise of hybrid working models is prompting companies to adopt the hub-and-spoke model, establishing satellite offices in smaller towns. 

Colliers' analysis identified locations with high potential for satellite office markets, including Coimbatore, Indore, and Kochi. 

The presence of skilled talent, infrastructure upgrades, and proximity to established office markets are key factors driving this trend.

The surge in digitisation is expected to boost real estate activity in smaller towns, particularly in warehousing and data centres. 

The growth of e-commerce will drive the development of fulfillment centers, warehouses, and distribution hubs in strategic locations. 

Cities like Jaipur, Kanpur, Lucknow, Nagpur, Patna, Surat, and Visakhapatnam are anticipated to see heightened real estate activity due to increased digital penetration.

Government policy support and infrastructure developments are poised to make spiritual tourism a critical growth driver for several temple towns in India. 

Enhanced connectivity and infrastructure upgrades will attract organised real estate players to these spiritual destinations, particularly in the hospitality and retail segments. 

Cities like Amritsar, Ayodhya, Dwarka, Puri, Shirdi, Tirupati, and Varanasi are expected to witness significant growth driven by spiritual tourism.

Real estate surge ahead

As India's smaller towns emerge as notable contributors to the economy, driven by improved infrastructure, affordable real estate, skilled talent, and government initiatives, the real estate sector is poised for substantial growth.

By 2030, the sector is estimated to reach $1 trillion, potentially growing to $5 trillion by 2050, representing a 14-16 per cent share of GDP. 

Significant momentum is expected across residential, commercial, retail, hospitality, and industrial segments, alongside alternative asset classes such as data centres, senior living, and second homes.