India’s Top 10 branded residence markets in Tier-2 cities
At present, there are 2977 branded residence units registered in India. This is around ~ 10% of the global market supply.
The next saga of growth in Branded Homes will emanate from non-metro Tier-2 cities.
The Indian branded residence market is gaining strength to strength. At present, there are 2977 branded residence units registered in India. This is around ~ 10% of the global market supply. Delhi-NCR is the largest market, contributing ~54% of the supply lines. The size of the total market is around ~ INR 27,000 crores.
The branded residence market will continue to grow and evolve in India with a host of big 5-star hotel chains entering the space. Major hospitality brands such as IHCL, Oberoi, Marriott, Leela, Four Season etc. have active projects in the country. Besides other big hospitality players such as Atmosphere Core, Wyndham, etc. are also planning investments in the Branded Residence segment.
In addition to hospitality chains, other brands such as Yoo, Versace, and Trump Tower are entering the space lured by its long-term prospect. Other brands spanning across F&B, fashion, lifestyle etc. are mulling to enter the space.
“However, what we have seen so far is just a tip of the iceberg. There is tremendous untapped potential in Tier-2 cities as well. Most of the branded home projects we have seen are limited to metros such as Mumbai, NCR, Chennai, and Pune. Meanwhile, as Tier-2 cities such as Lucknow, Cochin, and Ahmedabad are also growing fast, there is a visible appetite for indulgent, exclusive, and tailor-made lifestyle,” informs Ankit Kansal, MD, SKYE Hospitality.
Besides family business houses and legacy wealth, new cohorts of luxury homebuyers are also coming up in Tier-2 cities. These includes self-made business owners, venture-backed enterprises, corporate professionals, expats, etc. This is also thinning lifestyle difference(s) in metros and their peers in Tier-2 cities. It would not be a understatement to believe that the next saga of growth in Branded Homes will emanate from non-metro Tier-2 cities.
Topping the list is Panaji, which offers a perfect balance between a vibrant metropolis and a quant Portuguese style township. Panaji is dotted with premium restrobars, sleek cafes, casinos and swanky villas & apartments. Likewise, it is also home to old cathedrals, monuments, and idyllic bakeries & food joints.
“To learn more about how the segment will evolve, we have identified ten potential Tier-2 markets and ranked them accordingly. The cities have been ranked following a robust methodology, mentioned in the appendix section. The report has been compiled in partnership with 360 Realtors, which has worked as our data partner,” says Kansal.
Here’s is a look at India’s Top 10 potential branded residence markets in Tier-2 cities:
Panaji # Rank 1
Located at the crossroads of Zuari and Mandovi river, Panaji is the capital town of Goa. The coastal state of Goa is one of the biggest tourism markets in India. It is known for its picturesque beaches, baroque Portuguese architecture, scenic natural reserves, tranquil Konkan backyards and much more. Many HNIs from all over India, consider owning a property or a villa in Goa as a lifestyle upgrade. Consequently, the second homes market in Goa is booming backed by growing volumes of tech entrepreneurs, business house owners, corporate honchos, creative geniuses, and much more.
Panaji or Panjim as it is called sometimes has been on the centre stage of Goa’s bombastic growth. Though a small city in area (~ 8 Sq. Km) Panaji has seen exponential growth in tourism, hotels, infrastructure, second homes, and real estate in the past few decades. Property prices have skyrocketed in the past few years.
As a vibrant city, Panaji is known for casinos, upmarket international restaurants, sleek cafes, high streets, and much more. It strikes the right balance between a bustling urban metropolis and an old-world Portuguese city.
Shimla # Rank 2
Shimla, also known as the Queen of Hills, is situated in the foothills of Himalayas, north east of Chandigarh. Shimla is one of the most popular hill stations and tourist destinations in North India, besides being the cultural and administrative capital of the state of Himachal Pradesh (HP). In close proximity to Shimla are other key tourist destinations such as Kasauli and Solan.
Shimla is known for scenic deodar & pine forests, spellbinding valleys & mountain peaks, quaint bazaars and much more. It is one of the favourite gateways for North Indians to shun scorching heat during summers. In other seasons as well, it receives very high footfall of tourists. There are close to ~ 6500 hotels in and around Shimla, making it the key component of economy. Besides, other major constituents of the economy comprise administrative services, horticulture, and trade.
Shimla is also an educational hub and houses some of the most prominent boarding schools in India. It is also climbing up the radar to become a prolific IT and technology hub. Currently, there are limited IT enterprises in the region. Nevertheless, numerous start-ups are proliferating in and around Shimla.
Cochin # Rank 3
Cochin or Kochi is one of the prominent port cities in the western coast of India. The city is the epicentre of trade, commerce, and tourism in the state of Kerala. Cochin is a beautiful city blessed with pristine sea beaches, hilly terrains, eco-reserves, and tranquil country sides. It has a rich Colonial history often reflected in terms of numerous beautiful temples, churches, synagogues, and archaeological sites.
Cochin natural beauty and strategic location has helped it emerge as a powerful tourism & hospitality market. It draws hundred and thousands of tourists each year from all over the world for wellness, rejuvenation, and yoga activities.
Due to its ports, since middle ages Cochin played a pivotal role in trade & commerce. In the modern times as well, Cochin continues to be instrumental in trade & commerce. Around 80% of spices, agriculture products, fruits, dry fruits are traded via the Cochin port.
Cochin is also emerging a prominent IT/ ITeS sector in southern India. Strategic location, availability of high skilled labour force, and cheaper price of real estate (compared to other metros) are some of the factors helping Cochin emerging as a key IT sector.
Indore # Rank 4
While Bhopal is the capital of the state of M.P, the city of Indore is where the economic nerves of central India reside. One of the fastest growing economic & commercial centres in central India, Indore is home to a wide range of prolific industries.
More than one-third of Indian snacks or namkeen as it is called are made in the city of Indore. In close proximity of Indore is the industrial town of Pithampur, which is home to one of the largest automobiles & automotive parts industries in the country. Besides it is home to a fast-growing agribusiness and textile industries. Most of the MNCs alongside banking & financial institutions have their regional head office situated in Indore.
Indore like other fast-growing Tier-2 cities in India is also investing aggressively towards IT, ITeS, and communication industries. Dedicated IT and hardware parks are built in the city to draw attention of numerous big and small IT enterprises. Consequently, the city which was once the bastions of the Maratha Holkar, is a very fast-growing property market. There is strong visible appetite for Indore’s property market from various quarter: local buyers, outsiders, and NRIs.
Chandigarh # Rank 5
The city of Chandigarh is situated around 265 kms north of Delhi, on the foothills of Shivalik mountains. The scenic and well-planned city is known for striking the right balance between modern world dynamism & preserving natural beauty. Chandigarh has ranked one all over India, in terms of HDI (Human Development Index). It is also one of the top-most cities in terms of family wealth.
Known as the pensioner’s paradise, it is a favourite destination for retired civil servants and military officers. The city is dotted with plenty of well known parks, lakes, eco reserves, etc. giving it a very tranquil environment. The hill stations of Kasauli, Solan, and Shimla are located at an approachable distance.
The size of Chandigarh’s economy is pegged at USD 6.9 billion by FY 23, growing at a CAGR of slightly over 8% since FY 16. Some of the key industrial sectors in Chandigarh’s economic structure includes government departments, auto & tractor spare parts, renewable energy, construction materials, tourism & hospitality, etc.
Jaipur # Rank 6
The city of Jaipur forms the Golden Triangle alongside of Delhi and Agra. It, located at around ~ 250 kms (4-5 hrs drive) from the national capital, is an integral part of the DMIC. Jaipur is becoming a bustling ground for tourism, trade, and commerce. It is also witnessing an influx in a wide range of industries such as handicrafts, pottery, ceramics, auto parts, machineries, paper, cement, etc. It is also becoming a prominent hub of IT, especially BPO services. The Mahindra World City spread across 750 acres is one of the biggest IT parks in the North India. It is home to a wide range of companies including Genpact, MetLife, Infosys, Amazon, Flipkart, etc.
Due to slew of popular tourist destinations, Jaipur is not just known in India but is also recognized globally. ~ 250,000 foreign tourists visited Jaipur during 2023. Jaipur will also be greatly benefitted with mega projects such as DMIC, as 46% of the project falls in the state of Rajasthan. The project will create new jobs, boost industrial activities, and foster export from the region.
Ahmedabad # Rank 7
Ahmedabad is the capital of Gujarat, India’s one of the most industrialized states. Ahmedabad is one of the biggest hubs of trade, commerce, entrepreneurship, and retail in Western India after Mumbai. It comprises around ~ 25% of Gujarat’s GDP. It is home to some of the biggest pharma companies in the country. Proximity to ports, availability of skilled workforce, favourable policies, and a general entrepreneur culture has enabled Ahmedabad to become an economic powerhouse. It is also home to host of premier institutions such as IIM-A, MICA, IRMA, CEPT, NID, etc.
Ahmedabad is situated in the middle of the Delhi Mumbai Industrial Corridor (DMIC), which is a further advantage. Apart from Pharma, Ahmedabad is also a thriving centre for other industries such as IT/ITeS, textile, green energy, etc. The state of Gujarat has unveiled a progressive industrial policy for 2022-27 to attract leading IT enterprises from India and abroad.
Ahmedabad is also set to make a mark on the global fintech and finance landscape. Around 26 kms from Ahmedabad, a new GIFT city (Gujarat International Finance Technology Centre) has been unveiled. Besides a hub for IT & ITeS, GIFT is also drawing attention of key fintech start-ups from all over the world.
Lucknow # Rank 8
In the state of UP, the capital Lucknow continues to gather momentum. Lucknow located at around 7 hours from Delhi NCR is one of the biggest economic centres of UP, after Noida. The overall size of Lucknow’s economy is close to ~ 90,000 crores, contributing 3.9% of UP’s GDP size. The city of Lucknow is connected to Delhi via the Lucknow expressway & Yamuna expressway. It is seamlessly linked to eastern parts of the state of UP through the Purvanchal expressway.
Lucknow is emerging as a major node for IT, technology, and defence production. It is part of the UP-defence corridor. Work has already begun on manufacturing Brahmos missile. A new IT corridor is being developed in Lucknow, following an investment of INR 1500 crores. Already numerous big IT enterprises such as TCS, HCL, Amazon are operational in Lucknow.
Ludhiana # Rank 9
The city of Ludhiana is situated near Sutlej river in the state of Punjab. As one of the most industrialized cities in Punjab, it is also called the commercial capital of the state. Ludhiana, located at around ~ 270 kms from the North West of Delhi, is a key hub for a wide range of industries such as auto parts, bicycle, hosieries, textiles, home appliances, woollen wears and much more.
Around 50% of the bicycle used in North India are manufactured in Ludhiana. The city annually produces around ~10 million bicycles. Likewise, 60% of component of tractors in India is produced in the city. Many parts of auto majors such as BMW and Mercedes is also produced in Ludhiana.
Ludhiana is home to a prolific textile industry in India, giving it the tag of “Manchester of East”. Most of the major winter wear and woollen cloths brands in India are based out of Ludhiana. Similarly, there is booming textile and hosiery industry in the region. Besides large sized industries and manufacturing facilities, Ludhiana is also home to a vast network of mid-sized enterprises. These companies are spread across a host of sectors including but not limited to textiles, appliances, auto parts, hardware, machine parts, paints, agribusiness, food processing, etc.
Due to a vast entrepreneurial culture, Ludhiana has a vast concentration of HNIs, mostly business owners and investors. This has made Ludhiana a major luxury retail markets in North India. Despite not being a metro, Ludhiana has insatiable appetite for luxury retail, lifestyle goods, premium real estate and much more. Work is going on a full speed on various new hotels, resorts, malls, etc. to meet market demand.
Bhopal # Rank 10
Spread across the Malwa Plateau, Bhopal is a bustling city in central India. Bhopal is known for its royal heritage, picturesque lakes, and exotic flora & fauna. It is a leading educational hub with 29 universities and over 300 colleges operational.
Bhopal offers a relatively peaceful and high-quality living. While it is not as crowded as Mumbai and NCR, Bhopal has all the ingredients required for a good living such as malls, parks, lakes, enhanced connectivity, commercial offices. Besides headquarters of state-run enterprises, Bhopal is seeing influx of new manufacturing units, IT companies, BFSI ventures, etc. Like other state capital, there is increased spotlight on infrastructure. Work is going full-swing on the Bhopal metro. The project will have a total of six corridors spanning more than 100 kms.
