India’s Smart City mission is giving a boost to the realty sector mainly because real estate investors believe that the planned cities offer core infrastructure such as uninterrupted electricity and water supplies, efficient public transport, solid waste management and affordable housing. Also, it would ensure robust IT connectivity.
The government has announced a list of 98 cities that will be developed as Smart Cities. There is a mix of urban, semi-urban, financial and tourist hotspots.
Of those chosen for the project, 24 are capital cities, 24 are business hubs, 18 are cultural centres and tourism cities and 5 port cities. About 64 Smart Cities are small towns and cities while 34 are larger ones
Cities like Patna, Bengaluru, Kolkata, Thiruvananthapuram and Shimla have failed to make the cut in round one and there is a tie up between Bareilly and Meerut. Thirteen cities from Uttar Pradesh, 12 from Tamil Nadu, 10 from Maharashtra, 7 from Madhya Pradesh, 3 each from Bihar and Andhra Pradesh got included in the Smart Cities list.
Real estate analysts say Smart City projects offer massive opportunity, particularly from the real estate perspective. A Smart City will have well-developed infrastructure to attract the establishment of several Multinational companies.
Industrialisation of these Smart Cities will generate more employment opportunities, high standards of living due to the information and communication technology infrastructure. With high-quality manpower migrating to these areas, there will be high demand for quality housing.
As Smart Cities will have enough land and housing for low income groups (LIGs) and economically weaker groups (EWGs), the realty market is likely to become attractive for investors.
Analysts say that Smart Cities also offer an excellent investment options with a sustainable scope for price appreciation, especially for a long term investment perspective.
As Smart City project will be an amalgamation of commercial and residential projects, it will push the demand of office spaces as well as hotels, in addition to service apartments and shopping malls.
A Smart City project, along with real estate development, also entails many possibilities across sectors like Information Technology, architecture, interiors, and other application designers who will be a part of the project.
The real estate sector contributes about 6 per cent to India’s GDP. With the vision of building 100 smart cities, many analysts expect this share to increase to 10-12 per cent by 2022.