Lucknow Residential Real Estate Overview July 2012 - ICICI Home ...

EXECUTIVE SUMMARY
The Lucknow Residential Real Estate Overview, July 2012, offers a comprehensive insight into the key macro and
micro trends evolving in the Lucknow residential realty markets. The ICICI Home 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 Lucknow and New Lucknow. Old Lucknow was established during the 'Nawab' era and is typically
dotted with old-cramped developments. However, New Lucknow which has emerged only a few decades ago, is
replete with planned development and adequate social infrastructure. New Lucknow demonstrates high real
estate potential and has been the focal point of our study.
• Lucknow real estate market is currently a buyer's market and is largely driven by end users. Our estimates
suggest 40% investor participation in New Lucknow 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 Lucknow who have now migrated outside, yet wish to have a base in
Lucknow. 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.
• Lucknow 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 'Real(i)ty Next-Beyond the top 10 cities of India’, stated that Lucknow 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 Lucknow 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
(Lucknow 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.
• Lucknow 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 Lucknow, 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.
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