Kochi is the only city in South India which is rated among 10 hot emerging destination.(The cities are Agra,Ahmedabad, Bhopal, Kochi, Lucknow, Ludhiana, Indore,Chandigarh, Jaipur, Nagpur)
10 Hot Emerging Destinations Of 2007
Places to go, money to make
With the real estate boom of 2006 surging strongly into the New Year, small cities riding high on the strength of real estate cost advantage, improving infrastructure and business environment, coupled with the growing income and aspirational levels of their residents, are the hot spots for the builders engaged in frenetic development. We present 10 such hot destinations across India which are the best bets for profitable property deals in 2007.
The commercial capital of Kerala and a tourist destination, Kochi is one of the fastest emerging cities of India. As a port city, it has always been the proclaimed economic capital of Kerala with trade and retail being its fundamental business sphere. Kochi is one of the few cities in India which has the best connectivity to the outside world through sea, air and road.
In the recent times, since NASSCOM ranked it as the second potential city for investments in the IT sector, Kochi has emerged as a favoured destination for the IT and ITES industry.
The state government is promoting the city as a business and IT destination with Cochin CEPZ and Cochin Infopark in the pipeline.
Real Estate Scenario
Residential: The residential property market has developed in the last 4-5 years with acceptability for apartments and one could notice concentration of apartments in Menaka, Panampily Nagar, Edappally, M. G. Road and in the newly developed residential areas. The market is more active in the south with an average takeoff time of two months from the date of launch and is also the most expensive areas of Kochi. The residential property market is upbeat.
The demand for residential property is likely to continue on its upward trend as long as interest rates on housing finance continue to remain reasonably low and the economy remains stable. The demand is generally for 2 and 3 bedroom apartments with large halls. The market may see rise in demand as no new projects is being planned by any developer for the next two years and every builder has 4-5 projects in pipeline which are more than 70% booked. Any new residential project at the Menaka, Panampilly Nagar and M.G. Road will be booked within two months of its launch.
Commercial: The commercial market is still at an infant stage and is concentrated in and around M.G. Road, Chittoor Road and Shanmugam Road. The market is expected to grow with the focus of the state government to promote IT, especially in Kochi. The southern end of M.G. Road and Shanmugam Road has met the fresh demand from financial institutions and insurance sector. There are still some small office spaces on M.G Road and its by-lanes that are vacant and available at Rs 5-25 psf. Two new software parks are in the pipeline, one promoted by Kerala IT department and another by a local developer.
Retail: The retail market is the most developed here; previous to M.G. Road it was Broadway, which was the high street of Kochi. With the growth in the retail market, the high street shifted to M.G. Road that has become the main retail axis of the city with large format shops. The retail market at M.G. Road is dominated by large format jewellery and sari stores. Other than M.G. Road, Kadvanthara Junction and Palarvattom are developing as community shopping centres with retail focused on the surrounding residential colonies.
Apart from M.G. Road, Banerji Road connects the M.G. Road and the Shanmugam Road, running perpendicular to the M.G. Road and has developed as a retail street with mainly hardware and furniture stores. The upcoming retail destinations are Kadvanthara Junction and Palarvattom.
Areas of growth: The upcoming areas for real estate development in Kochi are MG Road, Chitoor Road and Shanmugan Road.
The yield returns on commercial properties are in range of 10-12% while for retail properties returns are 9.5-11%, and 5-7.5% for residential properties.
The land market in Kochi is reasonably stable. Many NRI Keralites, residing in the Gulf region are constantly investing in land. At Rs 1,500-2,500 psft, plots are available in city area while on the outskirts the rates are Rs 400-600 psft.
The residential property market is likely to witness an upward trend in demand. Residential apartment developments have witnessed a demand from the NRI population. Low interest rates on housing loans are expected to further trigger a demand in this sector.
The commercial market is yet to witness a growth in demand. With government’s initiatives of promoting Kochi as an IT destination, there could be a growth in development of software parks in future. The development of CEPZ and Cochin Infopark (Software Park) is expected to add impetus to the commercial property market.
As for retail, Kochi is still to see malls; some of the local developers are developing commercial complexes under the brand of mall but all these projects are commercial complex with no zoning and theme. The people of Kochi have good brand awareness but it’s only the mega lifestyle stores like Seemati and Jayalakshmi and mega jewellery stores like Alappat, Alukas and Josco who are the prime traffic mover.
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