Changing Realty: Home buyers now look beyond metros

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August 08, 2021 5:15 AM

The current expansion pipeline clearly indicates that strong, listed developers will continue to dominate the new residential supply and accelerate their market share gain, Anarock pointed out.

“Listed players now have their cross hairs trained on tier-II and -III cities. For instance, Bengaluru-based Puravankara and Sobha will expand into Kochi, Coimbatore, GIFT City, Hosur, Thrissur and Thiruvananthapuram,” Anarock said in a report.“Listed players now have their cross hairs trained on tier-II and -III cities. For instance, Bengaluru-based Puravankara and Sobha will expand into Kochi, Coimbatore, GIFT City, Hosur, Thrissur and Thiruvananthapuram,” Anarock said in a report.

Prominent real estate developers are firming up plans to launch residential projects of around 92.5 million sq ft (MSF) in the next two fiscal years across the top seven markets as well as in tier-II and -III towns, with the country’s IT capital Bengaluru emerging as a preferred choice.

As Covid rejigged personal and professional priorities, particularly among the migrant workforce, many professionals have either invested or are planning to invest in their dream home. Data compiled by Anarock Property Consultants revealed that leading listed players were now increasingly focusing on expansion into tier-II and -III towns.

“Listed players now have their cross hairs trained on tier-II and -III cities. For instance, Bengaluru-based Puravankara and Sobha will expand into Kochi, Coimbatore, GIFT City, Hosur, Thrissur and Thiruvananthapuram,” Anarock said in a report.

Data analysed from financial presentations of the top seven listed real estate companies showed that they were gearing up to launch around 92.5 MSF of residential space within the next one-two years. Apart from the top seven cities, they are also zeroing in on major tier-II and -III towns. At least 70-75% (64.75-69.40 MSF) of this supply may be launched in FY22, it added.

An analysis of numbers from previous financial years indicates a steady annual growth in launches. Despite Covid-19 in FY21, the total new launches by the top seven listed players rose 11% Y-o-Y — from around 28.3 MSF in FY20 to about 31.37 MSF in FY21.

The consultancy analysed data from Brigade Enterprises, Godrej Properties, Kolte-Patil, Mahindra Lifespace Developers, Prestige Estates, Puravankara and Sobha.

The current expansion pipeline clearly indicates that strong, listed developers will continue to dominate the new residential supply and accelerate their market share gain, Anarock pointed out.

Robust housing sales by the top seven listed players in previous financial years have proved to be a huge confidence booster. Data indicated that these firms cumulatively sold around 32.61 MSF of housing in FY21 despite the pandemic, 7% growth over FY2020, when about 30.45 MSF area was sold, Anarock Property Consultants chairman Anuj Puri said.

“Covid has driven a lot of latent demand into tier-II and -II cities. This demand is driven by improved economic growth, infrastructural developments, lower cost of living and more attractive real estate prices in these cities. However, it is the new work from home (WFH) dynamic which has worked most strongly in their favour as they continue to attract migrant professionals,” Puri explained.

The days when these cities’ residential supply was dominated by local players will soon be over. Demand is also chasing projects by leading developers, so their expansion into such cities is a given, he emphasised.

Among the major markets, Bengaluru is the most preferred with the realty firms, while the Mumbai Metropolitan Region (MMR) and Chennai are part of five listed developers’ expansion plans, Anarock said.

Kochi, Coimbatore, GIFT city, Hosur, Thrissur and Trivandrum appear prominently in the expansion plan of these players into tier-II and -III cities, it added.

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