Factors Spearheading Growth Of Real Estate in Kochi

Kochi is one of the upcoming cities of southern India because of the launch of retail, IT, residential, infrastructure and commercial projects in the city. The values of residences in prime area have seen a rise in 12 to 15 percent in values whereas house for rent in Kochi has shown a growth of almost 25 percent in the past quarter. The meteoric growth of IT companies in Kochi primarily drives the growth of the city. The government of Kerala aims to place Kochi on the worldwide IT map which has led to a rapid rise in demand for property and hence property values.

Several IT projects like Infopark and the Special Economic Zone or SEZ, first IT one in Malabar, and UL Cyberpark in Kozhikode are some of the prime projects that is triggering the growth of real estate in the city. The first building in Kerala for IT and ITeS, Cyberpark is to be completed in 18 months while the other SEZ and IT projects like Technocity and Technopark have also been planned and pushed in the pipeline. Some of the completed buildings have already been leased to Infosys and TCS. Along with available physical and social infrastructure in the city, there is excellent connectivity too in these areas which makes them the most preferred localities of the city.

Currently per square feet capital values of flats in this area is between Rs 2,500 and Rs 4000. Per square feet values is expected to increase in the coming 6 to 8 months. Moreover, when the IT projects which are under construction are completed, the number of job opportunities in the city will go up which will cause an increase in the demand of houses. For a house for rent in Kochi, you might have to pay up almost twice or thrice of what you have to right now.

Another popular infrastructure project in the city is the one by Kochi Metro Rail Limited which has started off with some preliminary works which include road construction. The government of Kerala is currently drawing up plans for land acquisition. The KMRL project aims to solve the current problem of traffic congestion in Kochi and wants to provide glitch free movement to and from the outskirts and central business districts of the city. It will further improve connectivity inside the city by multiple folds and make property prices along the proposed roads increase steadily.

In the past 2-3 months, the real estate sector of Kochi has shown good appreciation in the value of property in locations where the metro railway works has started off. Prices of property have increased by almost 30 percent in the areas through which the metro railway is slated to pass. For the real estate sector, the starting of the metro railway has been quite positive. Localities in North Kochi along with areas like Kaloor have shown increase in values of both commercial and residential properties.

The Kochi Metro Railway project which has already begun is supposed to be completed in the next 3 years. Areas which are roughly 500 metres to a kilometre away from a metro station would perhaps have a rise of 20 to 30 percent in their mean market price.

The expansion of the ITeS and IT sector in Kochi has already made a niche section of buyers of property and the upcoming metro railway has acted as catalyst for pioneering the real estate development process. Vytilla, Pallarivattom, Edapally, South Ernakulam and Kalamassery are some of the localities that would benefit the most from these projects. The areas will not only be spared of traffic congestion but also enjoy better connectivity with the centre of the city and its peripheral areas.

The first phase of the metro railway is under construction and it is strengthening existing areas whereas it is discovering other avenues of growth on another hand. Newer areas have been thought of being included in the 2^nd and 3^rd phase of the metro railway. The areas which are rumoured to be included have already experienced a growth spurt in property value and real estate activities.

The areas in the vicinity of metro stations have seen a lot of retail, hospitality and commercial development because of improved accessibility. Newer projects like luxury hotels, hubs of entertainment and convention halls have come up in these areas. Capital values of flats in Edapally, Vytilla and Kaloor are between Rs 3000 and Rs 5000 for a square feet whereas the localities which are near the metro stations that have been planned are getting almost 16 to 20 percent increase in values. When the metro becomes operational in the next 2 to 3 years, property values are slated to increase by almost 40 to 50 percent.

Kakkanad in the Ernakulam district of Kochi is a rapidly growing area in the city. The area has witnessed high growth in retail, commercial and residential sector in the last 2 years. There has been a growth of almost 100 percent in capital values for commercial and residential properties which rental values have gone up by almost 150 percent in the last few years.

One of the major factors contributing to this phenomenon is the development of the IT sector. Kakkanad has the 2^nd biggest IT technological park called Kochi Infopark along with the biggest IT industrial township, the upcoming Kochi Smart City which is the primary driver of economic growth in the area. Located near famous educational and health care institutions along with sufficient water supply, the region is best for commerce and residential purposes. Kakkanad is connected to the National Highway 47 which is why it enjoys high connectivity with the peripheral areas as well as central areas of the city.

The increase in industries has led to robust demand for houses, commercial properties like malls and entertainment hubs nearby. Developers like Ebony Estates, DLF Lts, Confident Group and ABAD Builders have already launched large scale projects here.

The projects have been designed for providing lifestyle facilities and features to end users. The projects spearheaded by local developers in the city can be bought for Rs 30 lakhs to Rs 50 lakhs. However, the ones in luxury segment such as the DLF Infinity Tower can be bought from Rs 90 lakhs onwards.