With the Indian economy clocking eight per cent annual GDP growth in 2005, government opening up FDI in sectors like Retail, and the booming IT, ITES and BPO sectors, the real challenge to growth lies in bridging the demand- supply gap in the field of quality infrastructure and housing demands. In such a situation, growth drivers for the real estate industry will not only be metros but also non-metros.

In recent times, developers from Pune have recognised the opportunities in other cities, and their new agenda seems to be to create a presence for themselves, not just on home turf, but elsewhere as well. Many developers are now launching projects in places as farflung as Mumbai, Goa, Hyderabad, Chennai and even New Jersey, USA and Melbourne (Seen above).

There are several reasons for this emerging trend; among them are availability of land, easy funds, a growing demand for retail and IT development and quality residential or commercial projects and private investors also investing in land and other real estate developments.

“We started looking at Goa some years ago and waited until it became a booming market for real estate, with NRI demand high for posh residential property and the boost in tourism helping open a good real estate market," said Rohit Gera, Managing Director, Gera Developments (P) Ltd. “Today Goa is essentially an economy driven by its IT policy and IT Parks."

In such as market, Gera is confident that a combination of innovativeness, access to modern technology and know-how will help them cater to evolving demands of both current and future markets, as well as alter the perception of property purchase. “Goa has tremendous opportunity for there is an element of acceptance for the kind of product that we do - intelligent buildings," he explains.

Gera’s entry into Goa also means that for the first time, a real estate developer is bringing in the international practice of offering a warranty in the real estate sector. Gera’s Imperium, like all other Gera projects, will have a five-year warranty to ensure that it stays in premium condition. This five-year warranty covers two areas: preventive maintenance in areas of carpentry, electrical diagnostic works, plumbing and bathroom tiles, and repairs as a result of improper installation or supply of any of the building’s fixtures or fittings.

Another reason that contributes to this growth is the boom in property values provided by highway and expressway development. D S Kulkarni Developers too are busy spreading their business in Mumbai, Bangalore and New Jersey (USA), for they believe that it works as a good expansion strategy, as Hemanti D. Kulkarni, President, DSK Group, explains.

“Our group, as part of our expansion strategy, has taken up projects in other cities. The migration rate to some cities in India is very high due to the availability of job opportunities there; in such cities there is good potential for our business. A multi-city presence enhances the corporate image of the company; it also provides us with growth opportunities. Any business house keeps exploring different markets for growth, in the same way are trying to explore different markets. The company also carries its brand equity, when it expands to other cities. Thus the customers can be assured of getting the same quality product anywhere he goes, which also helps him in making his buying decision."

Bangalore, Hyderabad and other cities that are competing with each other for investment also offer new growth areas in real estate development. Kumar Builders, for instance, are looking at Hyderabad and Chennai as the next cities for future growth.

Lalit Kumar Jain says: “We started projects in Mumbai and Bangalore for our brand is established and there is no need for us to market in any different way. Besides the profit margins are low in Pune, and there is a slow pace of sale; the appreciation is also less. In Bangalore, we have got a tremendous response; even a top builder from there booked with us. We decided a long time ago to move ahead as a multi-city developer."

Atul Goel, MD, Goel Ganga feels that if one wants to be corporatised, then one should be a multicity developer, as most would have an IPO.

Goel Ganga is developing projects in Mumbai, Bangalore and in Nagpur, which would boast of what is being touted as the biggest mall. “Today the roles are distinctly defined - people who put the funds in the property, or the landowners or the realty funds. When these roles are clear, the developer’s role is solely to promote a project or develop one. The ideal real estate would be a combination of land at the right location with excellent planning which is implemented in a good quality construction and utilised by the owner." When most IT professionals are multi-city workers, he asks, why can developers not go the same way and create better projects for them?

As cities develop, so will the opportunities for expansion , and for developers, this can only spell good news

Hence Growing demand, and an availability of land are among the reasons for this trend