Rising in the East

The eastern region real estate market is transforming at a faster pace with many leading players setting up projects in the cities such as Kolkata, Bhubaneswar & Guwahati. Construction Times presents an overview of the market and future market outlook.

India's real estate market has been experiencing a phenomenal growth in the current financial year. While the residential and commercial segments have seen some remarkable achievements during the period, the commercial and industrial segments are seeing promising trends ahead.  

Market is growing

The real estate market in the the eastern part of India has seen a revival recently after a lull period in the past years. According to various market research agencies, the real estate market in Kolkata and other major cities has seen many new projects coming up. The latest ANAROCK Research data says that the quarterly housing sales are at an all-time high with approx. 1,15,100 units sold in Q2 2023 across the top seven cities. The overall sales of housing properties in Kolkata in Q2 2023 saw a 20 per cent growth compared to the same period in 2022. The top seven cities recorded new launches of around 1,02,610 units in Q2 2023 against 82,150 units in Q2 2022, increasing by 25% over the previous year's corresponding period. Kolkata has seen 22 per cent growth in new launches in Q2 2023 as compared to Q2 2022.

Kolkata has also seen a growth in tall buildings. According to the latest CBRE report, Mumbai Metropolitan Region dominated India's skyline with 77 per cent share. In the remaining 23 per cent, Kolkata has 7 per cent of the total tall buildings in India.

According to Cushman & Wakefield, Office demand has improved by more than 50% in Kolkata and Bhubaneswar has also witnessed growing interest from local/multinational occupiers who were looking to setup/expand delivery centres. “Office demand in Q1 2023 has already reached 40% of the total volume witnessed last year. Major domestic and global firms such as Deloitte, KPMG, Grant Thornton, Infosys and LTI Mindtree have leased space in the city recently. Bhubaneswar has also attracted multinationals such as IBM and Deloitte who have set up delivery centres,” says Veera Babu, Managing Director, Hyderabad & East India, Cushman & Wakefield.

The real estate market in eastern region, especial in West Bengal has seen a major upswing over the last year. Apart from Kolkata, tier 2 cities of Bhubaneswar and Guwahati have also seen growth in residential projects with many corporate players setting up offices and industrial buildings such as warehouses and data centers in these cities. Kumar Satyaki, Joint Managing Director, Eden Realty, says, “Luxury real estate demand has stayed stable but the demand in the affordable segment has risen by almost 100%. Commercial property requirements are at an all-time high, more so in retail. This is not just the case with the core hotspots of the city, but in most of the suburbs as well, which is also reflective of the innovations and diversification occurring here.”

Infra development pushing real estate

The eastern region of the country has witnessed many largescale infrastructure developments recently, which has pushed the prospects of real estate market in the region. West Bengal has seen consistent infra-related developments over the last decade which has helped not only real estate but overall economy. Rishi Jain, MD, Jain Group, highlights the major infrastructure developments happening in the region and how this is going to help the real estate players and customers. “The eastern region has been witnessing major strides in transportation infrastructure. For instance, in Kolkata, the extension of the East-West Metro corridor and the development of the New Garia-Airport Metro corridor have drastically improved connectivity across the city. Highways like the Kolkata-Siliguri highway, have further enhanced the region's connectivity. Such projects typically boost the value of land and property in their vicinity, making them attractive to both developers and buyers.”

Challenges faced

In spite of the positive sentiments prevailing in the real estate market, many challenges from various fronts still pause hurdles for the real estate players in the region. According to Satyaki, land acquisition has become a significant challenge in Kolkata. He adds, “Lack of large land parcels with clean titles and complexities in the land acquisition process can lead to delays and legal hurdles. Regulatory delays and inconsistent enforcement of regulations can further complicate the process. Some of the central level regulations are designed keeping the markets of west and north India in mind which is not suitable for the eastern region. Some amendments and corrections for the eastern market may help our industry.”

Jain adds, “With the advent of RERA in West Bengal, the age-old issue of unscrupulous and fly-by-night real estate developers or ponzi scheme operators, in the disguise of real estate developers has reduced drastically and I am very hopeful that this challenge shall be eradicated to a large extent.

Looking ahead

The growing urbanisation, coupled with economic growth, is paving the way for new real estate developments in the eastern region. According to Jain, the region's improving infrastructure, connectivity, and quality of life are drawing in a more diverse demographic. Additionally, government initiatives to encourage affordable housing are making homeownership accessible to a larger segment of the population. Sahil Saharia, Chief Executive Officer, Shristi Infrastructure Development Corporation, is of the view, “Favourable government policies will keep driving up demand for real estate in the coming dates. Planned townships with good amenities and facilities will continue to be in high demand. Demand for luxury homes is on the rise and is expected to stay. Affordable housing will have a steady growth in the near future.”

“Overall, the future of real estate in eastern India seems bright, brimming with opportunities. It will be a blend of innovation, sustainability, and evolving consumer preferences, making it a dynamic and exciting space to watch,” Jain concludes on a positive note.

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