Industrial Smart Cities: A New Era for Tier-II and Tier-III Real Estate
The approval of 12 new industrial smart cities is set to transform the real estate landscape in tier-II and tier-III cities, driving massive economic growth and development.
Industrial CitiesReal Estate GrowthTierii CitiesTieriii CitiesNational Industrial Corridor Development ProgramReal Estate MumbaiOct 16, 2024
These cities will be established as smart industrial hubs under the National Industrial Corridor Development Program (NICDP) in key regions such as Khurpia in Uttarakhand, Rajpura-Patiala in Punjab, Dighi in Maharashtra, Palakkad in Kerala, Agra and Prayagraj in Uttar Pradesh, Gaya in Bihar, Zaheerabad in Telangana, Orvakal and Kopparthy in Andhra Pradesh, and Jodhpur-Pali in Rajasthan.
Regional Development
The NICDP focuses on multi-modal connectivity and strategic location of industrial cities along major highways, railways, airports, and ports. This ensures seamless logistics and transportation, enhancing regional development not just in one region or state but across the nation. The 12 new industrial cities are spread across 10 states, including economically weaker cities, in addition to existing ones in Greater Noida in Uttar Pradesh and Dholera in Gujarat.
G Hari Babu, President of the National Real Estate Development Council (NAREDCO), believes that the approval of these 12 new industrial smart cities will open up significant opportunities for industrial and real estate investment. These areas are likely to see a surge in interest from both businesses and homebuyers, driven by the new industrial growth and improved connectivity. This will make these regions more appealing for new developments.
The Realty Impact
The first major impact of these greenfield smart cities, aligned with the golden quadrilateral and the PM Gati Shakti National Master Plan, will be the development of connectivity infrastructure. The strategic investment in industrial growth is expected to create large-scale employment opportunities, estimated to be about 1 million direct jobs and up to 3 million indirect jobs. This will increase the demand for housing, offices, education, healthcare, and retail real estate.
These hubs are designed to incorporate the latest urban planning concepts such as 'plug-n-play' and 'walk-to-work', ensuring seamless integration of residential, commercial, and industrial zones. This is expected to boost the prosperity of the surrounding regions, driving more demand for real estate development. Retail, hospitality, and service industries will benefit from the influx of residents and the increased economic activity generated by the industrial parks.
Vishal Raheja, Founder and MD of InvestoXpert.com, sees these smart cities as big economic hubs that will encourage large-scale innovation and investments. More than 500,000 direct employment opportunities are likely to be generated, and the requirements for residential and commercial real estate are expected to see a significant increase. This is projected to appreciate values by up to 20% in just five years, with the inflow of technology companies and qualified professionals resulting in a strong demand for quality real estate and the creation of vibrant economic centers.
Looking Ahead
Real estate developers view the National Industrial Corridor Development Program as a key driver of economic progress in the country. The greenfield industrial smart cities, developed to global standards, are expected to attract foreign manufacturers and create the next wave of real estate growth and city planning. Real estate experts anticipate an uptick of about 15-20 percent in adjoining towns in the next couple of years, driven by the growing demand for housing and commercial space.
Urban planners state that the smart cities concept of 'plug and play' and 'walk to work' will have a ripple effect on the real estate sector of smaller cities, increasing demand for housing, commercial spaces, and allied industries. This will pave the way for overall balanced urbanization, not restricted to top metro cities. However, the key to realizing these benefits lies in the timely execution of these projects.
The proposed industrial cities have a minimum contiguous area of 1,000 acres (with some exceptions) and are to be developed as greenfield smart cities. Timely execution will be crucial to see the benefits materialize and to ensure that these cities become thriving economic centers.
Frequently Asked Questions
What is the National Industrial Corridor Development Program (NICDP)?
The National Industrial Corridor Development Program (NICDP) is an initiative by the Indian government to develop industrial cities with multi-modal connectivity along major highways, railways, airports, and ports. It aims to boost manufacturing and industrial growth across the country.
How many new industrial smart cities are being developed under the NICDP?
Twelve new industrial smart cities are being developed under the NICDP, spread across 10 states in India.
What are the key regions where these new industrial smart cities are being built?
These new industrial smart cities are being built in key regions such as Khurpia in Uttarakhand, Rajpura-Patiala in Punjab, Dighi in Maharashtra, Palakkad in Kerala, Agra and Prayagraj in Uttar Pradesh, Gaya in Bihar, Zaheerabad in Telangana, Orvakal and Kopparthy in Andhra Pradesh, and Jodhpur-Pali in Rajasthan.
What economic benefits are expected from these industrial smart cities?
The development of these industrial smart cities is expected to create about 1 million direct jobs and up to 3 million indirect jobs, driving demand for housing, offices, education, healthcare, and retail real estate. This will also boost regional development and attract foreign investments.
How will these industrial smart cities impact the real estate sector?
These industrial smart cities are expected to increase demand for housing, commercial spaces, and allied industries, driving real estate growth and value appreciation by up to 20% in just five years. They will also enhance the overall urbanization of smaller cities.
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