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

LUCKNOW REAL ESTATE
• Investment Scenario in Lucknow/Growth corridors
After rigorous analysis it has been observed that certain locations in Lucknow have seen a sharp property price
growth to the tune of 25-50% in the past 2-3 years.
The locations that are considered hot-spots for investment are mainly in the trans-Gomti region. Locations such
as Gomtinagar, Indiranagar, Jankipuram and their extensions are certain growth corridors within the city.
However, as the city has been expanding radially, the highways connecting with surrounding cities such as Sitapur,
Faizabad, Sultanpur, Rae Bareli, Kanpur and Hardoi have gained prominence in terms of infrastructural development
and market activity. While infrastructure development is underway at these locations, mega projects by many
reputed developers like DLF, Ansals, Sahara, Eldeco and Unitech are under-construction and many new projects
are in the pipe-line.
• Factors boosting Real Estate in Lucknow
The residential real estate in Lucknow has witnessed a rapid growth during the past few years. Key factors
contributing to the growth are:
1) Lucknow's position as the state capital and the second largest city of Uttar Pradesh. The city is the only large
urban centre amidst a number of small towns in the surrounding districts, making it an attractive destination.
2) Growing per capita income of state, coupled with positive aspirations of middle-class. The state's per capita
income in FY 2011 stood at a moderate level of INR 26,211. Per capita income of Uttar Pradesh in FY 2006
was INR 14,115 and has shown a progressive trend each year.
3) Improving infrastructure in terms of road networks, good educational institutions and organized retail. Creation
of employment opportunities by the public and private sector companies is an added factor.
4) Availability of land at affordable prices when compared to metros, has led private developers to venture into
the market.
5) Presence of reputed private developers like DLF, Rohtas, Eldeco, Halwasiya, Emaar MGF, Ansals, Unitech
and Sahara in the form of various mega projects with world class social amenities is slowly and gradually
changing the face of residential real estate in the city.
6) Lucknow's eligibility under JNNURM.
7) The proposed Metro in the city is another reason for the boom.
However, issues like slums mushrooming in almost all the parts of city, water-sanitation issues and pollution of the
river Gomti are a few causes of concern.
• Supply vs Demand of Private Builder Developments
The current supply and demand ratio of builder developments is almost proportionate. However, how this ratio will
fare in the future is debatable because a large number of units will find their way into the market. Developers feel
that this ratio will remain stable as supply will be released in various phases, in consonance with the increasing
demand. Moreover, if IT/ITeS grows as per predictions, the new employee base is expected to provide the much
needed impetus to the market demand. This will enable faster absorption across all product mixes.
9