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Cities of Yesterday are Opportunities of Tomorrow

09th Feb 2016 Economy, Kryton Buildmat Co. Pvt. Ltd. by Anandita Kakkar

Stats 1The India growth story has been one of constant change and enormous evolution. Where housing was the buzzword until just a few years ago, today infrastructure and industrial construction is ruling the roost for investment. Similarly, for the past few years tier II & III cities in India have been changing the trends.

With multinational corporations looking to expand their reach into the internal India and the workforce coming from tier II & III cities, the government and private developers have increased speed in expanding to these areas. In October 2015, one of India’s newspapers with the highest readership completed a comprehensive study on the top 10 Indian tier II cities to invest, details of which can be found here.

The main parameters within the study involved the expected growth in construction, supply, absorption etc. These indicators were based on what the market has been saying for over 2 years. From early 2013, the metros have seen a slight slump in their residential absorption. This has to do as much with access to buy ratio as it does with loans and other government and financial decisions.

Stats 2Moreover, tier II cities are just now opening up to better lifestyles with better commercial, school, infrastructure, and even job opportunities. Healthcare, which has always been synonymous in bigger cities, is now moving to smaller towns because of high demand, cheaper land rates, and more profitable government participation.
Cities like Lucknow, Bhopal, and Jaipur, which have always been seen as great tourist attractions, are now spending capital on infrastructure projects such as transportation metro and in upgrading nearby airports, because they can see the need and potential in growth. Construction has always worked as the basis of any economy, and the smaller cities in India are now gearing up to catch up with their more prosperous sisters.

However, this growth in construction means a steady growth in spending, which needs to be done with the greatest possible efficiency and the least amount of risk. Ensuring construction is built effectively with durability (lifespan) must be top-of-mind. As these tier II & III cities grow, construction delays will decrease the viability and profitability of these areas. Creating a plan to build durably today will increase the effectiveness of tomorrow for these cities.

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