TABLE OF CONTENTS 1. Executive Summary 3 2. <strong>Lucknow</strong> Fact File 4 3. <strong>Lucknow</strong> <strong>Real</strong> <strong>Estate</strong> 7 4. Micro Trends 10 5. Trans-Gomti Region - Zone 1 11 6. Trans-Gomti Region - Zone 2 13 7. Cis Gomti Region - Zone 3 15 8. Central <strong>Lucknow</strong> 17 9. Cis Gomti Region - Zone 5 19 10. Location Attractiveness Index 20 11. Disclaimer 21 2
EXECUTIVE SUMMARY The <strong>Lucknow</strong> <strong>Residential</strong> <strong>Real</strong> <strong>Estate</strong> <strong>Overview</strong>, <strong>July</strong> <strong>2012</strong>, offers a comprehensive insight into the key macro and micro trends evolving in the <strong>Lucknow</strong> residential realty markets. The <strong>ICICI</strong> <strong>Home</strong> Finance Company Research team undertook a detailed city survey and elucidated below are the key findings of the report. • On the basis of geographical location and development history, the report has broadly classified the city into two parts, Old <strong>Lucknow</strong> and New <strong>Lucknow</strong>. Old <strong>Lucknow</strong> was established during the 'Nawab' era and is typically dotted with old-cramped developments. However, New <strong>Lucknow</strong> which has emerged only a few decades ago, is replete with planned development and adequate social infrastructure. New <strong>Lucknow</strong> demonstrates high real estate potential and has been the focal point of our study. • <strong>Lucknow</strong> real estate market is currently a buyer's market and is largely driven by end users. Our estimates suggest 40% investor participation in New <strong>Lucknow</strong> and we anticipate some rise in these numbers in the future. • The market is primarily driven by bureaucrats, politicians, public/government servants, some private sector employees and original inhabitants of <strong>Lucknow</strong> who have now migrated outside, yet wish to have a base in <strong>Lucknow</strong>. Huge demand also flows in from surrounding cities on account of aspirations to enjoy better amenities and opportunities amiss in other cities of Uttar Pradesh. • <strong>Lucknow</strong> real estate markets have been stable with a slight upward bias. During the FY 2011-12 average price appreciation in certain locations has been in the range of 8 - 15%. • A recent CRISIL report titled '<strong>Real</strong>(i)ty Next-Beyond the top 10 cities of India’, stated that <strong>Lucknow</strong> is one of the next top ten cities with enormous real estate potential. The builders exude positive market sentiment in the long run, which is supported by the fact that many outside developers of repute have expressed interest in establishing their projects in the city. • The city's radial expansion has given way to new growth corridors on the real estate development map, especially along the highways that connect with neighboring cities such as Kanpur, Rae Bareli, Hardoi, Sitapur, Faizabad and Sultanpur. The real estate markets along these regions have recently witnessed some traction and many known developers have launched their projects along these locations. Moreover, focus on the supporting infrastructural development is also gaining ground. • While locations in Central <strong>Lucknow</strong> such as Mall Avenue and Jopling Road are old prime zones offering properties in the range of INR 3,500 - 6,500/sft., Gomtinagar and its extensions are new niche locations with properties in the price bracket of INR 2,000 - 4,000/sft. on offer. Many good projects by known developers spread across Gomtinagar, Rae Bareli Road, Sultanpur Road, Faizabad Road, Hardoi Road and Jankipuram have evoked a good response in the market. • The recent political change has brought a sense of optimism amongst market players. With the revival of LIDA (<strong>Lucknow</strong> Industrial Development Authority), there are plans to focus on Industrial and IT growth in the city. Such developments, once materialized, will provide the much needed impetus to the market demand. • <strong>Lucknow</strong> being the state capital, has emerged as a key center of business and financial activities for entire Uttar Pradesh. Government offices and BFSI sector are key segments which have witnessed growth in the city. Moreover, the Telecom sector has also emerged as a user of space in the city. MG Road (Mahatma Gandhi Road) at Hazratganj is the Central Business District (CBD) housing the main government and BFSI sector offices. Gomtinagar zone (esp. Vibhuti Khand and Vipin Khand) is emerging as a Secondary Business District (SBD). Faizabad Road, Mahanagar and Aliganj also witnessed some amount of commercial activity. • The organised retail market activity has paced-up in the city, especially in the last 4-5 years. While MG Road and Hazratganj are the most prominent shopping high-streets in <strong>Lucknow</strong>, Aminabad and Chowk are typical old retail destinations famous for 'Chikankari' works of small-scale industries. Moreover, Mahanagar, Indiranagar and Gomtinagar also have shopping arcades in various pockets. Organized retail is booming in the city and a number of malls (located in Hazratganj, Gomtinagar and Alambagh) have obtained a decent response. Sahara mall (Hazratganj), East End mall, Zee mall, Riverside mall (Gomtinagar) and Phoenix United mall (Alambagh) are operational malls witnessing decent foot-falls. 3
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