Spiritual destinations emerging as prominent real estate hotspots

A Colliers India report has listed out 17 cities that have the potential to play a key role in India's growth

Spiritual tourism is expected to power a number of emerging cities as prominent real estate hotspots driving India's growth, a report by property advisory Colliers India said.

The Colliers India report has listed out 17 cities that have the potential to play a key role in India's growth, as Tier II and III cities start on their journey of economic transformation.

"Smaller towns are emerging as dynamic contributors to India's economic landscape", Colliers India report on major real estate hotspots said, adding that factors like improved infrastructure, affordable real estate, ease of living, availability of skilled talent and government initiatives have contributed to increasing signs of equitable growth.

"India's march to the third largest economy cannot be solely sustained by just six major metro cities", Badal Yagnik, Chief Executive Officer at Colliers India told CNBC-TV18 during a conversation on June 19.

These are the prominent names in the list of emerging cities:

1. Focus on infrastructure growth
The trickle-down benefit of investment in infrastructure through industrial corridors and major government schemes like Gatishakti and National Logistics Policy is creating conducive environment for the development of factories and MSMEs, the report said.

2. Spurt of tourism, espcially to spiritual destinations
The pilgrim power is leading the travel boom in India, with spiritual tourism constituting nearly 60% of the domestic tourism market. Colliers puts the segment’s market size at $60 billion
currently, which is poised to grow at a CAGR of 9-10% to reach around $130 billion by 2032.

3. Symbiotic association of work and leisure
Offbeat destinations are expected to see a rising demand for second homes and hospitality services for remote and gig workers, the report said, thus enabling greater home ownership, shared offices, residential assets and time-share properties.

4. Increasing digitisation
The rapid digital adoption has created over 75 crore interest users, the second highest in the world. As India's e-commerce space expands to reach $160 billion by 2028, tier-II and III cities are expected to drive almost two-thirds of the demand, thus creating fulfillment centers, warehouses, and distribution hubs at strategic locations. This growing demand for digital serivces is also expected to fuel the emergence of data centers, with major operators already having a footprint smaller cities like Bhopal, Cuttack, Ranchi, Raipur, Madurai and Leh.

5. Decentralized work models
As IT companies and start-ups increasingly start tapping human capital in tier II and III cities, the report mentions both commercial and residential real estate of these cities poised to witness significant traction over next few years. The emergence of hybrid work has supported the rise of a hub & spoke model, with head offices in major cities and operational offices in smaller towns.

These 17 emerging hotspots are expected to witness rapid real estate development with an equitable growth trend across India, the report added.