Tier II and III cities have emerged as India's real estate development epicentres. For the longest time, these resource-rich cities went unexplored. The government's objective of developing 100 smart cities, ease in acquiring loans from banks and non-banking financial businesses for development projects, and the advent of the pandemic were all catalysts for the expansion of these cities.
The line between metro and non-metros is dissolving as we enter a new age of infrastructure expansion due to digitisation and the opportunity that tier II and III cities bring for economic growth. The saturation of the real estate industry in metro areas and the rising importance of these 'developing metros' are the primary reasons for the real estate sector to enter new terrain. The growth of these cities, from commercial to residential to public infrastructure, will benefit the elevator and escalator business.
The rise of real estate in a city may be used to assess how a regional town is progressing toward urbanisation.
While Mumbai, Chennai, and Bangalore, as well as other metro cities, have a thriving corporate and start-up culture, the Indian business and innovation scene is gaining traction in Tier II and III cities. Because of India's innovation boom, multinational firms and industries are shifting away from traditional office leases and establishing bases in Tier II and III cities to save operating costs.
Commercial real estate properties have seen exponential growth in demand across Tier II and III cities in the last year as information technology and technology-enabled services, banking, financial services, and insurance-focused organisations decentralise their operations to adapt to the new normal. Furthermore, with metros experiencing space saturation and high leasing rates, businesses and developers are targeting these growing cities as the future commercial centres for retail malls, offices, co-working spaces, gaming arenas, and so on.
COVID had a significant impact on the commercial sector. As a distinctive selling factor, developers in these rising cities now resort to luxury items such as AI-equipped elevators with high-end aesthetics. This is just one example of how we anticipate these cities' economic expansion showing the increased need for vertical mobility solutions and other Real Estate-related companies.
Since the rise of decentralised workplaces, a large portion of the population has returned to their hometowns or smaller communities, away from the noise and bustle of the metropolis. With a vast increase in population, developers are grabbing the chance to create projects for the mobilised people in order to give a decent lifestyle at a reasonable price.
Affordable housing developments are also gaining traction under various government housing plans, aided by applying harsher laws through state and federal government-controlled bodies such as RERA (Real Estate Regulatory Authority). This has increased consumer confidence and encouraged developers to embark on additional residential projects.
While purchasing a home is a common goal for many people, the cost is sometimes an impediment, particularly in urban areas. However, with residential development in Tier II and III cities in its early phases, affordability is achievable for many of the population with housing loans and programmes.
With an increase in population in Tier II and III cities, transportation becomes important in raising inhabitants' living standards. Government attempts to expand efficient public transit, such as airports, metros, and trains will increase demand for individuals in the real estate market. We also see the government focusing on intra-city network projects, which provide prospects for the elevator and escalator business and road developers.
When we talk about public infrastructure development, we also include providing high-quality hospitals, clinics, and schools, as well as assuring enough water and energy supplies, among other things.
Tier II and III cities now have the "pull factor" to attract individuals, businesses, and developers due to the central government's flagship programmes such as Digital India, Skill India, and Housing for All by 2022. Furthermore, more IT-friendly regulations will see some of these cities surge ahead quickly, resulting in a wave of urban awakening in these cities.