PEs, NBFCs Going for Tier-II properties owing to infrastructure and affordability

Q: These locations in and around bigger cities are starting to see interest from private equity funds and non-banking finance companies as realty is these locations appear to be finding takers in slow markets.

david.m,

31st December 2015

Real estate News in Mumbai

property prices

real estate in mumbai

non-banking finance companies

private equity funds

tier 2 cities

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But if there is a project which is being done by a professional group, is offering a value for money product and is surrounded by social and physical infrastructure, then in spite of being in a tier II location, it is seeing consistent end-user demand.

Madhuparna, Gurgaon

31st December 2015

Comment

Hello Madhuparna,
Apart from these locations, funds and NBFCs have their eyes on other such areas where land and property prices have not seen a so much growth over the past few years. Much of the demand for growth capital today is coming from projects in such locations.

jitu jayswal,

31st December 2015

Raj Nagar Extension in Ghaziabad, Ambarnath and Badlapur on the outskirts of Mumbai, Sonipat and Faridabad in Haryana, and Tambaram and Maraimalai Nagar in Chennai are on the radar of these investors.

Madhuparna, Gurgaon

31st December 2015

These localities have become hot destinations for investors today. Infrastructure is getting created in these locations. there is a supply-demand mismatch today in cities such as Gurgaon, but sales are happening in locations on the outskirts where there is good infrastructure available and where affordability matches demand.

jitu jayswal,

31st December 2015

Hi David,
These locations are still seeing end-use transactions happening at a good pace. They have the kind of ticket size that is affordable and selling in this slow market. It is where the volumes are and that is why it makes sense for institutional investor to come in.

jitu jayswal,

31st December 2015

Comment

Moreover, it is seen that some of these tier-II locations might be outside of the top metros but have a growing local economy, which is driving local jobs. Take the example of Dharuhera, it is between the Bawal-Manesar Investment Region (BMIR), which is a node in the Delhi-Mumbai Industrial Corridor and is emerging as a manufacturing and logistics hub.

Aveek Paul,

31st December 2015