The Hindu Business Line : Realty developers see scope in tier II cities

WITH the rising cost of living and real estate, as well as over-crowding across metros, people are considering tier-II cities as new possible habitats.

The local residents in such cities, who are employed locally or run small businesses, do not want to shift to metros anymore. Here exists a big opportunity for real estate developers to build townships in such cities, said Mr Sushil Ansal, Chairman, Ansal Properties and Infrastructure Ltd, at a conference on real estate here.

Ansal is one the big real estate players in the country having sales of Rs 1,86.2 crore in 2004-05.

Pointing to the opportunities in tier II cities, Mr Ansal said large tracts of land are available at cheaper rates, which can be developed over a period of time. Since the civic infrastructure in such cities is weak, developers need to provide water, sewerage and power facilities. They can also provide clubs, educational institutions and other amenities, which would add value to the projects, he said.

"Agriculturalists and small businessmen in tier II cities have a lot of disposable income, which they do not know where to spend. Today, retailers want to set up malls in such area. Hence three to four small shopping malls is a viable idea in such cities," Mr Ansal said.

New IT and IT-enabled services companies are moving away from metros to tier II cities. These companies have been able to source the necessary manpower from the local area. Such cities should be the new investment destination for the developers, Mr Ansal said.

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