In the last one year, Smart Cities project has been one of the most talked about plans in India. And indeed, its evolution has been quite laudable as compared to many other projects in the country. After inviting nominations from cities, the central government finally unveiled the list of 98 cities that will be developed as smart cities. Looking at the list, it is quite clear that the government has made a sincere attempt to keep a fair mix of urban, semi-urban, financial and tourist hotspots.
Smart City would ensure core infrastructure such as electricity supply, water supply, public transport, solid waste management and affordable housing. Also, it would ensure robust IT connectivity.
Key Developments so far:
– The union govt announces names of 98 Smart Cities that account for 35% of India’s urban population
– Of those chosen for the project, 24 are capitals, 24 are business hubs, 18 are cultural centres and tourism cities and 5 port cities
– About 64 Smart Cities are small town and cities while 34 are larger ones
– Cities like Patna, Bengaluru, Kolkata, Thiruvananthapuram and Shimla have failed to make the cut in round one and there is a tie up between ae Bareilly and Meerut
– 13 cities from UP, 12 from Tamil Nadu, 10 from Maharashtra, 7 from MP, 3 each from Bihara and Andhra Pradesh included in smart cities list.
How the Smart City project will impact Indian Realty Sector:
The growth of a Smart City project can give way to massive opportunity, particularly from the real estate perspective.
High Quality Infrastructure: A smart city is expected to provide well-developed infrastructure to attract the establishment of several MNCs. Industrialization of these smart cities will generate more employment opportunities for people.. Employment opportunities and hi standards of living due to the information and communication technology infrastructure attract a good manpower, which results in high demand for housing.
More Affordable Homes: The smart cities project will allocate enough land and housing for low income groups (LIGs) and economically weaker groups (EWGs), thereby increasing the demand for realty in the country.
Good Investment Options: Smart cities also offer an excellent investment options with a sustainable scope for price appreciation, especially for a long term investment purview. Eg: GIFT City has already resulted in a high price appreciation of up to 10% -15% annually (and about 30-40 per cent in some localities).
Commercial real estate: The smart cities project will be an amalgamation of commercial and residential projects in India, in close quarters. Evolution of these smart cities will push the demand of office spaces as well as hotels, in addition to service apartments and shopping malls. A smart city project, along with real estate, also entails many possibilities across sectors like Information Technology, architecture, interiors, and other application designers who will be a part of the project.
More Opportunities for Developers: Developers will get an amazing opportunity to offer new projects in the upcoming smart cities which boost the regional, social and economic infrastructure. Presently, the real estate sector contributes about 6% to India’s GDP. With the vision of building 100 smart cities, many expect this share to increase to 10-12 percent by 2022.