End-to-End Hospitality Consultancy SKYE has recently compiled a report on India’s top-10 potential branded residence markets across Tier-2 cities.
The study, which has been carried out in partnership with real estate advisory 360 Realtors, offers some incisive analysis & inputs on the potential of branded residence amongst a bunch of Tier-2 cities.
Commenting on the methodology of the ranking, Taran Chhabra, Director SKYE, stated that some of the key criteria considered are area, population, per capita income, growth rate of premium properties, availability of major hospitality chains, etc. Based on the criteria, an aggregate score has been given to each city to rank them accordingly.
India’s branded residence market, pegged at INR 27000 crores, is largely limited to Tier-1 cities, with NCR alone contributing 54% of the supply lines.
However, the market can proliferate to Tier-2 cities in future as there is visible demand. The Tier-2 market in India has seen phenomenal growth in recent years, marked by growing appetite for aspirational, luxury, and professionally managed livings. The concept of social opulence coupled with brand consciousness and overall wellbeing is now seen in such cities as well, which means possible potential for branded homes to take off.
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.
It is strategically placed with MOPA (annual capacity 4.4 million) and Dabolim airports (annual capacity 13 million). The scenic town has been party to Goa’s bombastic rise on global tourism and hospitality map. The average per capita income of Panaji is close to ~ 6 lakhs, probably one of the highest in India. Shimla follows Panaji in the list. The hill station is bastion of second homes and rental villas in North India. Branded residence can add one more layer to its evolving luxury home landscape.
“The hill station, which is also fondly called Queen of the Hills is known for its spellbinding valleys, majestic Himalayan peaks, and pine forests. Luxury property prices have reached ~ INR 13,000/ sq. ft. in H1 2024, rising sharply from 2021, when it was around ~ 7,860/ sq. ft. Shimla and its nearby regions such as Chail and Solan has ample potential for branded homes, second homes, holiday villas, service apartments.
There already are plenty of hotels including Novotel, Oberoi, IHCL, Radisson Blue, Grand Hyatt, etc. which further makes it a potential ground for branded homes to thrive.” Quoted, Mr. Ankit Kansal (MD, SKYE).
Next comes to Cochin (3), Indore (4) and Chandigarh (5). This is followed by Jaipur. The Pink City or Jaipur, located at 5 hours’ drive from NCR, is a bustling ground for tourism, hospitality, trade and commerce. A globally recognized destination, it receives around ~ 250,00 foreign tourists each year. Jaipur is also a potential ground for IT, ITeS enterprises, GCCs, etc.
As 46% of Delhi Mumbai Industrial Corridor (DMIC) falls in Rajasthan, Jaipur will be a great economic beneficiary of the mega plan. Price of premium properties have crossed INR 12,000/ sq. ft. in 2024, growing at a CAGR of 8.4% since 2021.
Other major cities in the list are Ahmedabad, Lucknow, Ludhiana, and Bhopal, in the same order.
“India’s Tier-2 cities offer a compelling story for branded homes to develop and prosper. The gaps with metros are blurring as new crop of affluent households are emerging in Tier-2 cities as well. These include family business houses, self-run business owners, seasoned investors, expats, corporate honchoes, etc.
“This is translating into increased demand for unique lifestyle and meaningful social interactions. Homebuyers are now willing to pay extra to get access to top-class amenities just like major metros,” added Kansal.