The Hindu Business Line : Call to develop social, physical infrastructure in tier-I, II cities

Perception, infrastructure and skilled human resource are key to attracting real estate developers and investors to small towns and cities - dubbed the tier II and III destinations, according to speakers from the real estate industry.

With information technology and information technology enabled services contributing to the buoyancy in real estate and development of special economic zones there is a threat of oversupply, and quality will be key to survival, they said.

At Estate South 2006, a seminar organised by the Confederation of Indian Industry on real estate development in the South, Mr Sanjay Dutt, Executive Director, Cushman and Wakefield, said that it was inevitable that companies driven by cost pressure would go to the tier II and III cities. Particularly, the information technology and IT-enabled services companies that have set up base over the last decade would like to expand in the region.

Tier I is not just about size, said Mr Raj Menda, RMZ Corp. Business is not just driven by the size of population but perception, social infrastructure and law and order situation would be key to attracting investments.

Mr S. Hariharan, General Manager, Property Development, Larsen and Toubro ECC Division, said that the smaller towns and cities should learn from the problems faced by their larger counterparts and develop infrastructure to meet the requirements. That would include not just the physical infrastructure like roads, power and connectivity but also make available trained and skilled workers.

Expressing similar concerns, Mr Thirumal Govindaraj, Head - Chennai Operations, CB Richard Ellis South Asia Pvt Ltd, said that moving senior management staff to the tier II and III towns would be tough in the absence of social infrastructure. The competition is to create the right atmosphere.