Aug 01, 2012
Lucknow Residential Real Estate Overview July 2012
TABLE OF CONTENTS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 14.
Executive Summary Lucknow Fact File Lucknow Real Estate Micro Trends Trans-Gomti Region - Zone 1 Trans-Gomti Region - Zone 2 Cis Gomti Region - Zone 3 Central Lucknow Cis Gomti Region - Zone 5 Location Attractiveness Index Disclaimer
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10 11 10 11 11 12 13 14 13
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17 18 17 19 20 19 20 21 20 21 22 21
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EXECUTIVE SUMMARY
The Lucknow Residential Real Estate Overview, July 2012, offers a comprehensive insight into the key macro and micro trends evolving in the Lucknow residential realty markets. The ICICI Home Finance Company Research team undertook a detailed city survey and elucidated below are the key findings of the report.
On the basis of geographical location and development history, the report has broadly classified the city into two parts, Old Lucknow and New Lucknow. Old Lucknow was established during the 'Nawab' era and is typically dotted with old-cramped developments. However, New Lucknow which has emerged only a few decades ago, is replete with planned development and adequate social infrastructure. New Lucknow demonstrates high real estate potential and has been the focal point of our study. Lucknow real estate market is currently a buyer's market and is largely driven by end users. Our estimates suggest 40% investor participation in New Lucknow and we anticipate some rise in these numbers in the future. The market is primarily driven by bureaucrats, politicians, public/government servants, some private sector employees and original inhabitants of Lucknow who have now migrated outside, yet wish to have a base in Lucknow. Huge demand also flows in from surrounding cities on account of aspirations to enjoy better amenities and opportunities amiss in other cities of Uttar Pradesh. Lucknow real estate markets have been stable with a slight upward bias. During the FY 2011-12 average price appreciation in certain locations has been in the range of 8 - 15%. A recent CRISIL report titled 'Real(i)ty Next-Beyond the top 10 cities of India', stated that Lucknow is one of the next top ten cities with enormous real estate potential. The builders exude positive market sentiment in the long run, which is supported by the fact that many outside developers of repute have expressed interest in establishing their projects in the city. The city's radial expansion has given way to new growth corridors on the real estate development map, especially along the highways that connect with neighboring cities such as Kanpur, Rae Bareli, Hardoi, Sitapur, Faizabad and Sultanpur. The real estate markets along these regions have recently witnessed some traction and many known developers have launched their projects along these locations. Moreover, focus on the supporting infrastructural development is also gaining ground. While locations in Central Lucknow such as Mall Avenue and Jopling Road are old prime zones offering properties in the range of INR 3,500 - 6,500/sft., Gomtinagar and its extensions are new niche locations with properties in the price bracket of INR 2,000 - 4,000/sft. on offer. Many good projects by known developers spread across Gomtinagar, Rae Bareli Road, Sultanpur Road, Faizabad Road, Hardoi Road and Jankipuram have evoked a good response in the market. The recent political change has brought a sense of optimism amongst market players. With the revival of LIDA (Lucknow Industrial Development Authority), there are plans to focus on Industrial and IT growth in the city. Such developments, once materialized, will provide the much needed impetus to the market demand. Lucknow being the state capital, has emerged as a key center of business and financial activities for entire Uttar Pradesh. Government offices and BFSI sector are key segments which have witnessed growth in the city. Moreover, the Telecom sector has also emerged as a user of space in the city. MG Road (Mahatma Gandhi Road) at Hazratganj is the Central Business District (CBD) housing the main government and BFSI sector offices. Gomtinagar zone (esp. Vibhuti Khand and Vipin Khand) is emerging as a Secondary Business District (SBD). Faizabad Road, Mahanagar and Aliganj also witnessed some amount of commercial activity. The organised retail market activity has paced-up in the city, especially in the last 4-5 years. While MG Road and Hazratganj are the most prominent shopping high-streets in Lucknow, Aminabad and Chowk are typical old retail destinations famous for 'Chikankari' works of small-scale industries. Moreover, Mahanagar, Indiranagar and Gomtinagar also have shopping arcades in various pockets. Organized retail is booming in the city and a number of malls (located in Hazratganj, Gomtinagar and Alambagh) have obtained a decent response. Sahara mall (Hazratganj), East End mall, Zee mall, Riverside mall (Gomtinagar) and Phoenix United mall (Alambagh) are operational malls witnessing decent foot-falls.
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LUCKNOW FACT FILE
City Overview Lucknow Metropolis, the state capital of Uttar Pradesh, traditionally known for its rich cultural heritage and distinct etiquette is now emerging as one of the fastest growing non-metropolitan cities. Shedding its old image of a city famous only for its unique styles of embroidery like 'Chikan' and 'Lakhnawi Zardozi', it is today a centre of modern technology, with a high level of investment, institutional development and progressive outlook. It is witnessing an economic boom which is reflected in the pace of real estate development in the city. Today, Lucknow is an amalgamation of cultured grace and newly acquired pace. Geographical Location The city is geographically located at 26.50 N and 80.50 E in the Northern Gangetic plains, around 123 metres above sea level. The present metropolitan area of Lucknow is envisaged to be 3091.40 sq km. The River Gomti flows through the city, dividing the whole city diagonally into trans-Gomti and cis-Gomti regions. Some of the tributaries of this river are the Kukrail, Loni and Beta. The Sai river flows from the south of the city. Lucknow witnesses diverse climatic conditions, with hot-humid summers from April to June (maximum temperature 470 C) and cool-dry winters from December to February (minimum temperature 200 C). Surrounding Towns and Cities The city is surrounded by towns and villages like Malihabad, Kakori, Mohanlalganj, Gosainganj, Chinhat and Itaunja. It is bounded by the Barabanki district in the east and the Sitapur district in the north. To the north west of the city is Hardoi district, while south-east and south-west are bounded by Rae Bareli and Unnao districts respectively. Economy and Demographics As per the provisional census 2011, the population of Lucknow has seen a decadal growth of 25.79% and currently stands at 4,588,455. This includes 2,407,897 males and 2,180,558 females. The district has a literacy rate of 79.33 %; male and female literacy are at 84.27% and 73.33% respectively. The sex ratio of Lucknow has witnessed an increase of 2.03% over the decade and currently stands at 906 females per 1000 males. The service sector forms the main economic base of the city. Government departments and the public sector undertakings are the principal employers of the salaried middle-class. Liberalisation has created many more opportunities and the service sector and self-employed professionals are burgeoning in the city. History Lucknow traces its origin to the Suryavanshi dynasty of Ayodhya in ancient times and derives its name from Lakshman, brother of Lord Rama, the hero of the Indian epic 'Ramayana'. The city came into eminence only during the 18th century. In 1732, Mohammad Shah, one of the later kings of the once powerful Mughal dynasty, appointed Mohammad Amir Saadat Khan, a Persian adventurer of noble lineage, to the vice royalty of the area known as Awadh, of which Lucknow was a part. At the time of the first war of independence in 1857, the city suffered a lot of damages, vestiges of which are still evident in the dilapidated buildings. The old past was replaced with new developments during the British period. Post independence, Lucknow replaced Allahabad as the capital of Uttar Pradesh. Census 2011 Key Highlights
Description Actual Population Male Female Population Growth Area Square Km. Density/Square Km. Sex Ratio (females per 1000 males) Average Literacy Rate Male Literacy Rate Female Literacy Rate 2011 4,588,455 2,407,897 2,180,558 25.79% 2,528 1,815 906 79% 84% 74% 2001 3,647,834 1,932,317 1,715,517 32.03% 2,528 1,443 888 69% 76% 60%
Source: Census 2011
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LUCKNOW FACT FILE
Administrative Framework Lucknow is the political and administrative capital of Uttar Pradesh. The city elects members to the Lok Sabha as well as the Uttar Pradesh Vidhan Sabha (State Assembly). Lucknow has two Lok Sabha constituencies named Lucknow and Mohanlalganj. The city is under the jurisdiction of a District Magistrate/Collector, who is an IAS officer. The Collector is in charge of property records and revenue collection for the Government. The Collector oversees the national elections held in the city and is also responsible for maintaining law and order. The civic amenities of the city are managed by the Lucknow Municipal Corporation with executive power vested in the Municipal Commissioner. The Corporation comprises elected members (corporators elected from the wards directly by the people) with the City Mayor as its head. An Assistant Municipal Commissioner oversees each ward for administrative purposes. Existing and Upcoming Infrastructure Lucknow has experienced immense infrastructural development in the past two decades. The development has acquired pace during the last decade in terms of organised and planned development of roadways, entertainment zones, good educational institutions and other public amenities. Recently the city's central commercial hub, Hazratganj has undergone a makeover which gives it a near international look. While New Lucknow, the part of the city that started to develop at a much later stage, has good infrastructural facilities such as well-planned road networks, water and sanitation facilities, presence of organized retail and other social amenities, the Old Lucknow region, that constitutes the older parts of the city established during the 'Nawab' era, suffers from unsatisfactory basic facilities. Lucknow being an eligible city in JNNURM (Jawaharlal Nehru National Urban Renewal Mission) is expected to witness improved infrastructure in the future. Road Connectivity There are four national highways and four state highways in the city: National Highways NH 24 connects Delhi NH 25 connects Bhopal via Jhansi NH 28 connects to Makama (Bihar) NH 56 connects to Varanasi State Highways SH 25 connects Hardoi SH 36 connects Rae Bareli SH 56 connects Sultanpur SH 40 connects Mohaan.
Numerous bridges across Gomti river have been constructed to offer improved connectivity. Hardinge Bridge (near Imambara), Iron Bridge (at Daliganj), University Bridge and Nishaathganj Bridge are old bridges providing connectivity primarily in the older part of the city. Gomti Barrage, Gandhi Setu and Ambedkar Park bridge are a set of parallel bridges providing good connectivity in the new part of Lucknow. Initiatives have been taken to provide good intra and inter-city road connectivity. Amar Shaheed Path is an elevated road, conceptualized in 2001, with the main aim to ease the traffic flow on the city roads by providing a diversion to the long distance vehicles. Hence, traffic from Kanpur to Rae Bareli, Sultanpur and Faizabad, or vice versa will not have to enter the city. Apart from improving the inter-city links, the road will considerably benefit the connectivity amongst all key locations and growth corridors within the city limits. The road starts at Faizabad Road passes through Sultanpur Road (near Gomtinagar extension), Rae Bareli Road and ends at Kanpur road, spanning a stretch of approximately 23 km. It will also pass through many upcoming developer projects. Other chief roads are the upcoming Lucknow-Kanpur Expressway and existing outer ring road.
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LUCKNOW FACT FILE
Railway and Airway Connectivity Lucknow is well-connected by rail and air routes to different parts of India. The main railway station is located at Charbagh. Further, there are 13 other railway stations within the city limits. Chaudhary Charan Singh International Airport at Amausi, is located approximately 20 km from the city center. A new integrated terminal has become operational from June 02, 2012, while the old terminal has been shut for repairs. The 20,000 sq.m three-tier building, which can accommodate around 650 passengers at a time, is equipped with the latest technology, duty-free shops, cyber cafes, snack bars and shopping arcade. Lucknow is directly connected by air with New Delhi, Patna, Kolkata, Mumbai and Hyderabad. International destinations include Dubai, Muscat, Sharjah, Jeddah, Riyadh and Kathmandu (Nepal). During Haj, special flights are also operated from Lucknow. Lucknow Metro The Lucknow Metro project is still in the planning stage. It would be built and operated by Lucknow Metro Rail Corporation. As per the proposed plan, the phase-I of the Lucknow Metro will constitute two lines and an extension line. The proposed three corridors are: North-South Corridor This will connect Amausi airport to Munshipulia. This corridor is expected to have 21 stations. Gomtinagar Link Trains coming from the Airport Terminal will be diverted towards Gomti Nagar at the Indira Nagar Trisection (Polytechnic Crossing). East-West Corridor This will connect Lucknow railway station at Charbagh to Vasantkunj on Hardoi Road. This corridor is expected to have 12 stations. Focus on Industrial Development Lucknow Industrial Development Authority (LIDA), constituted in 2005, is set to revive post a period of dormancy. LIDA possesses approximately 350 acres of land and is expected to acquire additional acres to boost the industrial development in the city. An Information Technology park is planned on approximately 32 acres of land under LIDA, at Amausi Industrial area on the Kanpur Road. It has been decided to develop the park on the 'walk to work' concept. Apart from office spaces, service apartments would also be set-up exclusively for employees of IT businesses. The anchor developer would be required to develop IT towers and all requisite public amenities, in order to attract big IT companies for establishing their businesses. For the IT park, there are approximately 350 proposals from industrialists and the decision on applications and allotment process is expected to start in near future. Nearly 25 acres of land has been sanctioned for disaster management and training centre of the Indo-Tibetian Border Police. It has also been decided to develop an Industrial corridor between Lucknow and Kanpur.
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LUCKNOW REAL ESTATE
Short Term (10 - 12 months) Long Term (50 - 60 months)
Average appreciation of 8 - 10% 10 - 15% YoY average appreciation in capital value with an upward bias on a conservative note.
The above analysis pertains to the new and upcoming part of the city (referred to as New Lucknow in the report), where developmental activities indicate a promising real estate potential in the future. An average capital appreciation of 8 10% is expected in the Lucknow residential real estate markets in the short term (10 - 12 months). However, over a longer span of 50 - 60 months, the market is expected to yield a year-on-year appreciation of 10 - 15% on a conservative note. This analysis is based on the past market trends, present builder/buyer sentiments and the enormous future real estate potential. With the recent change in political scenario of the state, a sense of optimism prevails across the market. There are anticipations of certain key steps that would directly/indirectly boost the realty sector in the city. The revival of LIDA, the plans of an upcoming industrial/IT corridor and a positive approach towards investments from outside the city have provided the impetus for growth in the real estate markets. The upward bias over a five-year horizon is also based on the estimate that 40% of the current activity in New Lucknow is driven by investors and this is expected to intensify in the future. We analyzed the past price trends in certain locations of New Lucknow, as depicted in the graphs illustrated in the later part of the report. We observed that prices over the last one year (Q1-2011 to Q1-2012) have appreciated to the tune of 8 - 30%, while over a span of the last five years, year-on-year appreciation ranged from 8 - 39%. The real estate market of Lucknow is considered to be one of the most upcoming Tier-II markets on account of the huge metamorphosis that the city is undergoing. While we analyze this outlook in the report, it is interesting to note the contrasting nature of the two parts located within the same city but separated by river Gomti. These pockets have different real estate dynamics driving them.
A Glimpse of Residential Development in Lucknow On the basis of geographical location and development history, Lucknow city can be divided into Old and New Lucknow. Old Lucknow, spread out in the cis-Gomti region, was established in the 'Nawabi' era. A major part of Old Lucknow is dotted with unplanned residential developments fraught with old architecture, heritage monuments, grossly inadequate infrastructure, water and sanitation issues. The region is home to a number of handicraft factories for Zardozi and Chikan embroidery work. People from varying socio-economic groups, ranging from wealthy established families to families below poverty line reside here. There are hardly any multi-storied builder developments in this cluster. New Lucknow lies in the trans-Gomti region, with the exception of certain prime localities around Hazratganj (in Central Lucknow) that are located in the cis-Gomti region. This part started to develop at a much later stage, therefore is equipped with well-planned roads, modern architecture and an organised social infrastructure. While the real estate landscape is dotted with independent houses, the trend of apartment/floor establishments by reputed builders is now being witnessed. Lucknow over the years has witnessed a radial growth, greater along the Faizabad Road and also along the roads leading to other neighboring cities, hence carving out newer locations on the real estate development map.
Market Sentiment The Lucknow real estate market is currently a 'buyer's market'. It is largely 'end-user' driven, with some investment activity prevalent in the new emerging locations. In New Lucknow, the investor participation is approximately 40% which is expected to escalate in the future. While investors are predominantly long-term investors, short term speculation is still at a very nascent stage.
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LUCKNOW REAL ESTATE
The investor base in the city includes bureaucrats, polititians and government officials, businessmen and also migrants who wish to own a second home in the city. Moreover, demand also flows in from residents of other cities in Uttar Pradesh like Faizabad, Gonda, Bahraich, Sultanpur, Unnao, Sitapur, Barabanki, Allahabad, Kanpur and Varanasi, who aspire for an upgradation in living standards. The recent political change has created a sense of optimism amongst the market players, who are anticipating certain developments that will foster the real estate sector. The successful implementation of plans to develop an industrial and IT corridor may furnish the much desired impetus to the market demand that will further boost supply absorption and market liquidity. A recent CRISIL report titled 'Real(i)ty Next - Beyond the top 10 cities of India', stated that Lucknow is one of the next top ten cities with enormous real estate potential. The builders exude positive market sentiment in the long run which is supported by the fact that many outside developers of repute have expressed interest in establishing their projects in the city. Developers show interest in Tier-II and Tier-III cities like Lucknow because of better profit margins due to lower land costs. The real estate market of Old Lucknow is predominantly end-user driven with very limited investment opportunities. The old colonies like Rakabganj, Chowk, Rajabazaar, Rajajipuram have been densely populated on account of easy availability of low priced real estate. It may be surprising to know that despite the underdeveloped infrastructure, property prices in several parts of Old Lucknow like Chowk are at par with the average prices prevailing in prime localities like Gomti Nagar. The key reason is the high demand by owners willing to further expand their traditional establishments in these areas, amidst lack of fresh supply. Moreover, a number of wealthy business families that reside here, possess huge potential spending power. Hence, this high demand and low supply, coupled with good spending capability leads to property price escalations.
Independent Houses vs. Builder Developments Lucknow is a city where people have been particularly attached to land. Most parts of the city are dotted with plotted/independent houses style development. While private developers have ventured into the city more than 3 decades ago, offering planned plotted developments, their presence has paced-up in the last 5-6 years (especially multi-storied developments). Big real estate developers like DLF and Emaar MGF have recently forayed into the Lucknow market while some known builders such as Rohtas, Eldeco, Unitech and Parsvnath have already been offering projects in the city. While the lure of land plots/independent houses is still rampant, migration to builder societies has been witnessed particularly on account of better amenities and security. Most builder projects in the city offer a diverse product mix (comprising land plots, villas and floors), as per estimated demand.
Migration from Independent Houses to multi-storied Apartments The city is undergoing a transition, wherein the appetite for plots/independent houses has seen some change towards a taste for multi-storied developments. This is on account of diminishing supply of land plots within the desired budget and lucrative amenities in builder developments. Moreover, the Lucknow Development Authority has not announced schemes for independent houses and plots for a long time and the schemes that have come of late, offered apartment floors (in Gomtinagar and Jankipuram). This further leads to migration from independent houses to apartments. This migration has been more prevalent in the niche areas like central Lucknow (Jopling Road, Gokhale Marg), New Hyderabad and Gomti Nagar.
Land Acquisition by Private Developers The developers buy land parcels that are sold or auctioned by the government authorities (Lucknow Development Authority, Uttar Pradesh Housing and Development Board) or farmers. This phenomenon is visible in the developing/ upcoming parts of the city like Faizabad Road, Gomti Nagar Extension, Rae Bareli Road and Hardoi Road. There are several old 'kothis' erected over huge land parcels at various locations within the city. These kothis are generally old and dilapidated and many owners are offloading these properties. Builders are either purchasing these kothis and reconstructing apartments or entering into a joint-development model with the owners wherein builders construct their project and share profits with the original owner. This trend is prevalent in developed areas like Central Lucknow, New Hyderabad, Dalibagh, etc.
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LUCKNOW REAL ESTATE
Investment Scenario in Lucknow/Growth corridors After rigorous analysis it has been observed that certain locations in Lucknow have seen a sharp property price growth to the tune of 25-50% in the past 2-3 years. The locations that are considered hot-spots for investment are mainly in the trans-Gomti region. Locations such as Gomtinagar, Indiranagar, Jankipuram and their extensions are certain growth corridors within the city. However, as the city has been expanding radially, the highways connecting with surrounding cities such as Sitapur, Faizabad, Sultanpur, Rae Bareli, Kanpur and Hardoi have gained prominence in terms of infrastructural development and market activity. While infrastructure development is underway at these locations, mega projects by many reputed developers like DLF, Ansals, Sahara, Eldeco and Unitech are under-construction and many new projects are in the pipe-line.
Factors boosting Real Estate in Lucknow The residential real estate in Lucknow has witnessed a rapid growth during the past few years. Key factors contributing to the growth are: 1) 2) Lucknow's position as the state capital and the second largest city of Uttar Pradesh. The city is the only large urban centre amidst a number of small towns in the surrounding districts, making it an attractive destination. Growing per capita income of state, coupled with positive aspirations of middle-class. The state's per capita income in FY 2011 stood at a moderate level of INR 26,211. Per capita income of Uttar Pradesh in FY 2006 was INR 14,115 and has shown a progressive trend each year. Improving infrastructure in terms of road networks, good educational institutions and organized retail. Creation of employment opportunities by the public and private sector companies is an added factor. Availability of land at affordable prices when compared to metros, has led private developers to venture into the market. Presence of reputed private developers like DLF, Rohtas, Eldeco, Halwasiya, Emaar MGF, Ansals, Unitech and Sahara in the form of various mega projects with world class social amenities is slowly and gradually changing the face of residential real estate in the city. Lucknow's eligibility under JNNURM. The proposed Metro in the city is another reason for the boom.
3) 4) 5)
6) 7)
However, issues like slums mushrooming in almost all the parts of city, water-sanitation issues and pollution of the river Gomti are a few causes of concern.
Supply vs Demand of Private Builder Developments The current supply and demand ratio of builder developments is almost proportionate. However, how this ratio will fare in the future is debatable because a large number of units will find their way into the market. Developers feel that this ratio will remain stable as supply will be released in various phases, in consonance with the increasing demand. Moreover, if IT/ITeS grows as per predictions, the new employee base is expected to provide the much needed impetus to the market demand. This will enable faster absorption across all product mixes.
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MICRO TRENDS
After analyzing the macro-trends of Lucknow real estate, we now delve deeper and analyze the micro-trends. Methodology: For this analysis, we have divided the Lucknow real estate market into five zones on the basis of geographical location and the growth stimulators driving them. We have considered the trans and cis-Gomti regions separately. Each of these is further divided into two parts, while central Lucknow in the cis-Gomti region is considered as a separate zone. Therefore, there are a total of 5 zones. The analysis of each zone is as follows:
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TRANS-GOMTI REGION - ZONE 1
Major Locations: Gomti Nagar Phase I, II and Extension, Indira Nagar, Chinhat, Faizabad Road, Rabindra Palli. Key Highlights:
Gomti Nagar belt has emerged as a prime location in the city, with a fair mix of commercial, residential and retail developments. Segregated into various phases and sectors, the landscape is dotted with the presence of independent houses and premium apartments. Many reputed developers are foraying into this location. The commercial/retail catchments, good social infrastructure and close proximity to CBD has enabled property price appreciation to the tune of 6-10% over the last one year. Faizabad Road, a road that connects Lucknow to Faizabad, has demonstrated active growth and is expected to grow further in the near future. The micro-market witnesses the presence of many educational institutions, residential townships and commercial/retail establishments (Nissan, Volkswagen, Toyota showrooms, Metro Cash & Carry to name a few). Recently Spencer's retail store started operations on this road. The market players anticipate more consolidation activities (small players exiting to big players) to take place at this location. The residential properties along this road fall in the price band of INR 2,000 - 2,500/sft. Chinhat, Deva Road: This is in close proximity to the Islamic shrine 'Deva Shareef'. The Tata automobile factory located in this area is the main growth driver for residential real estate here. The capital values are in the price band of INR 2,000 - 2,500/sft. Organized retail developments include the Zee mall, East End mall and Riverside mall in Gomti Nagar. The famous Taj Group's hotel is also located in the Gomtinagar region.
Growth Stimulators:
Many financial institutions, public/private sector companies and corporates like the Reserve Bank of India, Passport office, LDA office, Tata Consultancy Services, NTPC, Hindustan Times are located in Gomtinagar. The new premises of U.P. High Court-Lucknow Bench are also under construction in this area. Moreover, the entire region is in close proximity to the CBD. Maximum operational malls in the city are located in this region. Good road connectivity owing to existing and upcoming wide roads, highways, bridges and flyovers. Shaheed Path touches Gomtinagar extension. Well-developed social infrastructure in terms of hospitals (eg. Sahara, Ram Manohar Lohiya Hospital), reputed educational institutions (eg. Jagran School-Dainik Jagran's initiative, Jaipuria school and Institute of Management, Homeopathic Medical College) and other social amenities like shopping arcades, malls and multiplexes.
Price Trends in Trans-Gomti Locations of Lucknow*
200 180 160
Index
Gomti Nagar Indira Nagar Faizabad Road
140 120 100 80
Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012
*Assuming 100 as the base for Q1-2008 Source: ICICI Property Services Group
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TRANS-GOMTI REGION - ZONE 1
Residential Property Rates in Prime Residential Markets of Some Trans-Gomti Locations of Lucknow** Location Gomtinagar Gomtinagar Extn. Indiranagar Faizabad Road Rabindra Palli
**Indicative mid market segment Source: ICICI Property Services Group
Capital Values (INR/sft.) 3,000 - 4,000 2,000 - 2,500 2,500 - 3,500 2,000 - 2,500 2,500 - 3,000
Land Rates (INR/sft.) 3,000 - 4,000 2,500 - 3,000 3,000 - 4,000 1,900 - 2,100 2,500 - 3,000
Average Rentals for 2 BHK (INR/month) 6,000 - 7,000 9,000 - 10,000 6,500 - 7,000 5,000 - 6,000 5,000 - 6,000
Gomtinagar Bypass
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TRANS-GOMTI REGION - ZONE 2
Major Locations: Sitapur Road, Janakipuram and extension, Aliganj, Niralanagar, Mahanagar and Daliganj. Key Highlights:
These micro-markets typically comprise of independent houses. Re-development of old properties to builder apartments is prevalent in some of these locations. Aliganj typically constitutes residences of government officials and coaching institutes. Head office of the Sahara India Group is located in Aliganj. The property prices in Aliganj and Niralanagar micro-markets have witnessed an appreciation in the range of 9-10% over the last one year. While Aliganj, Niralanagar and Mahanagar are planned colonies that were developed more than 30-40 years ago, Jankipuram and Sitapur Road are comparatively new upcoming developments. Jankipuram is one of the locations where LDA recently offered apartment schemes. Properties in the price band of INR 2,000 - 4,000/sft can be witnessed across these locations. Aliganj, Niralanagar and Mahanagar predominantly witness transactions in the secondary markets. Of late, no major activity has been seen in these markets. However, construction of independent houses, private builder developments and LDA apartments is rampant in Jankipuram and its extensions. Major developers in the Jankipuram area include Sahara and SAS.
Growth Stimulators:
Presence of commercial catchments in Mahanagar and Aliganj coupled with good connectivity with the CBD has driven residential demand in these areas. Presence of institutional buildings like Geographical Survey of India, Public Service Commission of Uttar Pradesh, Central Government Office Building Complex, Institute of Engineering and Technology and New Campus of Lucknow University. Moreover, adjoining Daliganj are the well-known Lucknow University campus and Isabella Thoburn College. Well-developed public infrastructure offering good education facilities, presence of reputed hospitals and various shopping arcades.
Price Trends in Trans-Gomti Locations of Lucknow*
260 240 220 200
Index
Janakipuram Scheme of LDA Aliganj Chowk Mahanagar Nirala Nagar
180 160 140 120 100 80
Q1 2008
Q1 2009
Q1 2010
Q1 2011
*Assuming 100 as the base for Q1-2008 Source: ICICI Property Services Group
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Q1 2012
TRANS-GOMTI REGION - ZONE 2
Residential Property Rates in Prime Residential Markets of Trans-Gomti Locations of Lucknow** Location Sitapur Road Jankipuram and Extn. Vikas Nagar Nirala Nagar Aliganj Mahanagar
**Indicative mid market segment Source: ICICI Property Services Group
Capital Values (INR/sft.) 2,000 - 3,500 2,000 - 2,500 2,500 - 3,500 3,000 - 3,500 3,000 - 3,500 3,000 - 4,000
Land Rates (INR/sft.) 1,500 - 2,000 2,000 - 2,500 2,500 - 3,500 3,000 - 3,500 3,000 - 3,500 3,000 - 4,000
Average Rentals for 2 BHK (INR/month) 4,000 - 5,000 5,000 - 6,000 6,000 - 7,000 6,000 - 7,000 6,000 - 7,000 6,000 - 7,000
Parivartan Chowk
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CIS-GOMTI REGION - ZONE 3
Major Locations: Kanpur Road, Rae Bareli Road, Sultanpur Road, LDA Colony, Ashiana Colony, South City, Vrindavan Upnagari, Alambagh. Key Highlights:
Lucknow cantonment lies between the Rae Bareli Road and the Sultanpur Road. Since major portions of the area belonged to the defence ministry, the area adjoining the Lucknow cantonment did not witness much development in the past. It was post the establishment of S.G.P.G.I (Sanjay Gandhi Post Graduate Institute of Medical Sciences) on Rae Bareli Road that urban residential development acquired pace. Rae Bareli Road: This growth corridor has witnessed some traction of late and the residential projects located here have evinced good response from the buyers. There are many government aided projects planned near this road. The road is well-connected with other parts of the city through the Shaheed Path. Sultanpur Road houses many private educational institutions. The road is well-connected with other parts of the city through the Shaheed Path. Several private developers have forayed into this area to develop residential projects. Currently, residential properties along this road are available in the price range of INR 2,000 - 3,000/sft. Kanpur Road, a road between two main cities, is yet to evolve. However, with the recent political shift, the region is believed to witness focused developmental activities to unlock the huge potential that the location is believed to possess. The region is primarily an industrial area and there are plans to set up an IT corridor in this region. The establishment of IT companies and corporates in the city will provide the much required impetus to the market demand. Project launches along this road by private developers, are anticipated. This cluster also hosts the Vrindavan Upnagri, one of the biggest residential townships developed by Uttar Pradesh Awas evam Vikas Parishad. The residential properties in this township fall in the price band of INR 2,000 - 3,000/ sft. Organised retail: Phoenix United Mall is located in the heart of Alambagh. It is strategically located in close proximity to Lucknow's Amausi International Airport and the Charbagh Railway Station, along the Kanpur Road. Major developers present in this area include Ansal and Unitech.
Growth Stimulators:
Good road connectivity with other parts of the city as well as neighbouring cities. Close proximity to Lucknow airport. Connectivity through Shaheed Path to various key locations within the city. Industrial and IT corridor planned near Kanpur Road. Decent social infrastructure and presence of reputed hospitals. Presence of organized retail (Phoenix Mall) and commercial developments in various parts of this cluster.
Price Trends in cis-Gomti Locations of Lucknow*
450 400 350 300 250 200 150 100 50
LDA Colony Kanpur Road Ashiana Sharda Nagar Scheme Alambagh
Index
Q1 2008
Q1 2009
Q1 2010
Q1 2011
*Assuming 100 as the base for Q1-2008 Source: ICICI Property Services Group
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Q1 2012
CIS-GOMTI REGION - ZONE 3
Residential Property Rates in Prime Residential Markets of Cis-Gomti Locations of Lucknow** Location Kanpur Road Rae Bareli Road Sultanpur Road Vrindavan Upnagari Ashiyana Colony Alambagh South City (Unitech)
**Indicative mid market segment Source: ICICI Property Services Group
Capital Values (INR/sft.) 1,500 - 2,000 (very less supply) 2,200 - 3,000 2,000 - 3,000 2,000 - 3,000 2,500 - 3,500 2,000 - 3,000 2,000 - 3,000
Land Rates (INR/sft.) 1,500 - 2,000 1,500 - 2,500 1,000 - 2,000 2,000 - 3,000 2,500 - 3,500 2,500 - 3,500 2,000 - 3,000
Average Rentals for 2 BHK (INR/month) 4,000 - 5,000 4,000 - 5,000 NA 5,000 - 6,000 6,000 - 7,000 5,000 - 6,000 6,000 - 7,000
New Lucknow Airport
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CENTRAL LUCKNOW
Major Locations: Hazratganj, Jopling Road, Wazir Hasan Road, Mall Avenue, Aminabad, New Hyderabad, Kaiser Bagh, Meenabagh (Commercial Area) and Aishbagh (Industrial Area). Key Highlights:
Hazratganj is said to be the heart of Lucknow. It is a prime commercial and retail zone of the city. Many government offices, private offices and financial institutions are located in this micro-market. Vidhan Sabha is located in this part. Another commercial center is Aminabad, which is in close proximity to the old part of the city. Mall Avenue, Jopling Road and Gokhale Marg are niche residential localities surrounding the CBD and are landscaped with prime bungalow style or premium multi-storied developments. This micro-market is a seller's market, on account of mitigating residential supply. Hence, the high rates in these areas cannot be compared with the rates in other locations of Lucknow. The property prices range from INR 3,500 - 6,500/sft. Sahara Mall, located in this cluster is the pioneer mall in the city. This mall attracts maximum foot-falls. Major developers present in this area include Eldeco, SAS and Halwasiya.
Growth Stimulators:
Presence of reputed financial institutions, corporate offices, excellent social infrastructure, niche residential localities and connectivity to various parts of the city are the growth drivers of this region. Close proximity to all key areas of the city, on account of its central location. Good connectivity to both trans and cis-Gomti regions of the city through roads and highways. Presence of organized retail (Sahara Mall). Lucknow Golf Club, one of the premier clubs of Lucknow, is located midway Hazratganj and Gomti Nagar.
Price Trends in Central Lucknow*
200 180 160 Hazratganj Gokhale Marg New Hyderabad
Index
140 120 100 80
Q1 2008
Q1 2009
Q1 2010
Q1 2011
*Assuming 100 as the base for Q1-2008 Source: ICICI Property Services Group
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Q1 2012
CENTRAL LUCKNOW
Residential Property Rates in Prime Residential Markets of Central Lucknow** Location Hazratganj Jopling Road/ Gokhale Marg Mall Avenue Aminabad New Hyderabad Paper Mill Colony Capital Values (INR/sft.) 3,500 - 4,500 4,000 - 6,500 3,500 - 4,500 2,000 - 3,000 3,000 - 4,000 2,000 - 4,000 (Metro City) Land Rates (INR/sft.) 4,000 - 5,000 4,000 - 5,000 (very less supply) 4,000 - 5,000 2,000 - 3,000 3,000 - 4,000 2,000 - 2,500 Average Rentals for 2 BHK (INR/month) 9,000 - 10,000 9,000 - 10,000 9,000 - 10,000 5,000 - 6,000 7,000 - 8,000 7,000 - 8,000
**Indicative mid market segment Source: ICICI Property Services Group
Hazratganj
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CIS-GOMTI REGION - ZONE 5
Major Locations: Hardoi Road, Alambagh, Rajajipuram, Chowk, Thakurganj and other locations of old Lucknow city. Key Highlights:
Major parts of this region consist of old developments like Chowk, Rajajipuram, Thakurganj and Rakabganj. This part of Lucknow is saturated, except for certain upcoming areas like Hardoi Road and IIM Road. Hardoi Road/IIM Road is a growth corridor and many known developers have been venturing into this part to develop residential projects. The premier management institute 'Indian Institute of Management, Lucknow' is located near Hardoi Road. Both government authorities and private developers have planned residential projects in this area. Main developers present in this area include Sahara and Eldeco. While Alambagh and its adjoining areas are primarily commercial zones, Chowk is a mix of residential and commercial developments and is the centre for 'Chikan' and 'Zardozi' embroidery. Rajajipuram is one of the planned colonies of old Lucknow. Many heritage monuments and famous 'Imambaras' are located in Chowk making it often frequented by tourists. The entire old Lucknow belt predominantly witnesses secondary market transactions. However, primary market transactions can be seen in the Hardoi Road belt.
Residential Property Rates in Prime Residential Markets of Cis-Gomti Locations of Lucknow** Location Hardoi Road/IIM Road Rajajipuram Chowk
**Indicative mid market segment Source: ICICI Property Services Group
Capital Values (INR/sft.) 1,500 - 2,500 2,000 - 3,000 2,000 - 3,000
Land Rates (INR/sft.) 1,500 - 2,500 2,000 - 3,000 2,000 - 3,000
Average Rentals for 2 BHK (INR/month) 5,000 - 6,000 5,000 - 6,000 5,000 - 6,000
Vidhan Sabha
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LOCATION ATTRACTIVENESS INDEX
Location Attractiveness Index
Gomtinagar Gomti nagar Extn. Indira nagar Central Lucknow Janki puram Rae Bareli Road Faizabad Road Sitapur Road Hardoi Road Kanpur Road
Aliganj
Infrastructure (connectivity, roads, markets, schools)
Residential Cost
Proximity to Organised Retail
Proximity to Commercial Development
Future Infrastructure Development
Future Employment Generation
Good / Low cost Above Average Average / Medium Cost Below Average Bad / High Cost
Explanatory Note: While Central Lucknow and Gomtinagar show greys/blues on almost all parameters (which is positive), the maroon boxes indicate high residential property prices. Out of the short-listed locations while Central Lucknow, Gomtinagar, Indiranagar and Aliganj are established prime localities, Rae Bareli Road, Faizabad Road, Sitapur Road, Hardoi Road and Kanpur Road are emerging corridors witnessing traction.
Source: ICICI Property Services Group
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ANALYST DEEPIKA SRIVASTAV Assistant Manager - Research ICICI Property Services Group deepika.srivastav@icicihfc.com
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