Bhubaneswar, the capital of Orissa and the "Temple Town of India", is an important metropolis of eastern India. The city is well connected with the rest of the country and has the potential to emerge as an important growth centre.
Being the seat of administration in the state, Bhubaneswar has attracted a huge worker population, mostly from the neighbouring locations, and has seen its population growth surge by 57% over the decade. The prime economic drivers of the city have been trade and tourism. With the growth of IT/ITES prospects in the city and the resurgence of the mining industry, Bhubaneswar is expected to evolve as a significant urban centre of the country in the forthcoming years.
Though the infrastructure development in the city has been rather slow, there has been steady
development in the real estate sector of the city. A number of national level developers have expressed interest to set up their projects in the city. With Janpath, the CBD of the city, facing paucity of land, new commercial developments in the city are coming up in the north and southwest locations of the city.
Residential property in the city mostly comprises independent units in prime locations of Ashok Nagar, Forest Park, Jaidev Vihar and Bapuji Nagar with a few multi-storied apartments in Rasulgarh. Demand for apartments and flats are expected to pick up with increasing preference shown by the HIG population of the city.
A prime tourist destination of the country, Bhubaneswar has an active retail scenario. At present, retailing in the city is largely unorganised and are located at Janpath, Cuttack-Puri Road, Ekamra Marg and Bapuji Nagar. Several major brands have their outlets in the city with most of them concentrated in and around Janpath.
Current Scenario
The Bhubaneswar real estate market is government regulated with almost 70-75% of the land holding vested with the state owned Orissa State Housing Board. Lack of space within the city has led to the emergence of locations like Chandrasekharpur, Sailashree Vihar, Nandankanan and Patia in the north of Bhubaneswar. Kalinganagar and Khurda are the other emerging locations in the southern part of the city.
The commercial real estate in the city at present comprises mixed-use development - office space in the upper floors with retail on the ground and first floor. A few stand-alone office structures have been developed by the local government to attract IT/ITES companies. Some of the major developments by the State Government through Industrial Development Corporation of Orissa (IDCO) are the Tower 2000 in Mancheswar Industrial Estate, IDCO Towers in Janpath and Fortune Towers in Chandrasekharpur which houses prominent companies like TCS, Reliance Infocomm, Tata Teleservices, POSCO and Essar Steel.
The Orissa Government has accorded ‘Priority Sector’ status to the IT sector to attract investment in to the region.
Being the seat of administration in the state, Bhubaneswar has attracted a huge worker population, mostly from the neighbouring locations, and has seen its population growth surge by 57% over the decade. The prime economic drivers of the city have been trade and tourism. With the growth of IT/ITES prospects in the city and the resurgence of the mining industry, Bhubaneswar is expected to evolve as a significant urban centre of the country in the forthcoming years.
Though the infrastructure development in the city has been rather slow, there has been steady
development in the real estate sector of the city. A number of national level developers have expressed interest to set up their projects in the city. With Janpath, the CBD of the city, facing paucity of land, new commercial developments in the city are coming up in the north and southwest locations of the city.
Residential property in the city mostly comprises independent units in prime locations of Ashok Nagar, Forest Park, Jaidev Vihar and Bapuji Nagar with a few multi-storied apartments in Rasulgarh. Demand for apartments and flats are expected to pick up with increasing preference shown by the HIG population of the city.
A prime tourist destination of the country, Bhubaneswar has an active retail scenario. At present, retailing in the city is largely unorganised and are located at Janpath, Cuttack-Puri Road, Ekamra Marg and Bapuji Nagar. Several major brands have their outlets in the city with most of them concentrated in and around Janpath.
Current Scenario
The Bhubaneswar real estate market is government regulated with almost 70-75% of the land holding vested with the state owned Orissa State Housing Board. Lack of space within the city has led to the emergence of locations like Chandrasekharpur, Sailashree Vihar, Nandankanan and Patia in the north of Bhubaneswar. Kalinganagar and Khurda are the other emerging locations in the southern part of the city.
The commercial real estate in the city at present comprises mixed-use development - office space in the upper floors with retail on the ground and first floor. A few stand-alone office structures have been developed by the local government to attract IT/ITES companies. Some of the major developments by the State Government through Industrial Development Corporation of Orissa (IDCO) are the Tower 2000 in Mancheswar Industrial Estate, IDCO Towers in Janpath and Fortune Towers in Chandrasekharpur which houses prominent companies like TCS, Reliance Infocomm, Tata Teleservices, POSCO and Essar Steel.
The Orissa Government has accorded ‘Priority Sector’ status to the IT sector to attract investment in to the region.
IT majors Infosys and Satyam who had set up their development centre in Bhubaneswar in 1997 are contemplating expansion plans. An important development by IDCO has been the Infocity-I, the IT SEZ in Chandrasekharpur.
Adjacent to Infocity-I Delhi-based DLF Group is coming up with their IT Park in Chandaka Industrial Estate. Genpact has also announced plans of setting up a BPO SEZ on 25-acres of land in the Mancheswar Industrial Estate of the city. Apart from IT, a 60-acre biotechnology park is also planned in the city.
On the residential property front, the government had been the major provider of housing in terms of land and built up space. However, deficient supply from the government has prompted the city's residents to turn towards the private developers to meet their housing demand. A number of township developments have been proposed to come up in the suburban and peripheral locations. These include a 100-acre township by Sahara India along the NH-5, the Club Town project in Chandrasekharpur and anotherlarge-scale joint development by Bhubaneswar Municipal Corporation in Shaheed Nagar. Most of the residential projects in the city are witnessing high absorption rates and the demand for residential units has increased in the city in prime residential locations of Ashok Nagar, Bapuji Nagar, Shaheed Nagar and Surya
Nagar.
Bhubaneswar is also currently witnessing a perceptible change on the retail front. The 180,000 sq.ft. Forum Mart off Janpath was the first organised retailing development in the city. According to industry sources, retailers like Reliance and Bharti are scouting for land in the CBD. Besides this, several local developers have plans for setting up large format malls through joint venture in the city.
On the residential property front, the government had been the major provider of housing in terms of land and built up space. However, deficient supply from the government has prompted the city's residents to turn towards the private developers to meet their housing demand. A number of township developments have been proposed to come up in the suburban and peripheral locations. These include a 100-acre township by Sahara India along the NH-5, the Club Town project in Chandrasekharpur and anotherlarge-scale joint development by Bhubaneswar Municipal Corporation in Shaheed Nagar. Most of the residential projects in the city are witnessing high absorption rates and the demand for residential units has increased in the city in prime residential locations of Ashok Nagar, Bapuji Nagar, Shaheed Nagar and Surya
Nagar.
Bhubaneswar is also currently witnessing a perceptible change on the retail front. The 180,000 sq.ft. Forum Mart off Janpath was the first organised retailing development in the city. According to industry sources, retailers like Reliance and Bharti are scouting for land in the CBD. Besides this, several local developers have plans for setting up large format malls through joint venture in the city.
Rental and Capital Values
In the last few years there has been an annual appreciation of almost 50% in office space values. Office space in Janpath has lease values in the range of Rs.35-60/sq.ft. per month and capital values in this location vary between Rs.4,000-7,500/sq.ft. The average lease rates for office space in other locations vary between Rs.20-30/sq.ft. per month and the capital values range between Rs.2,400-4,000/sq.ft.
In the last few years there has been an annual appreciation of almost 50% in office space values. Office space in Janpath has lease values in the range of Rs.35-60/sq.ft. per month and capital values in this location vary between Rs.4,000-7,500/sq.ft. The average lease rates for office space in other locations vary between Rs.20-30/sq.ft. per month and the capital values range between Rs.2,400-4,000/sq.ft.
Presently, the residential market in terms of apartments in Bhubaneswar is driven primarily by investor demand. As a result, prices in prime high-end residential locations have increased substantially over the past year and are currently at a range of Rs.1,650-2,500/sq.ft. while mid-end apartments are at Rs.1,600-1,800/sq.ft. Locations like Khurda, Patia and Nandankanan which have been promoted as the growth corridors of the city, comprise duplex bungalows with high resale value. The residential developments in these peripheral locations are witnessing very high absorption and prices are in the range of Rs.1,500-1,800/sq.ft.
The retail lease rates in key highstreets of the city are estimated at Rs.45-60/sq.ft. per month while the capital values are in the range of Rs.5,500-7,000/sq.ft. In secondary highstreets of Cuttack-Puri Road, rental values are at Rs.35-45/sq. ft. per month and capital values are quoted at Rs.4,000-5,500/sq.ft.
Outlook
The state government has been actively promoting Bhubaneswar as an upcoming IT/ITES destination. Recently, to give further push to the sector, an International Institute of Information Technology (IIIT) was launched at Gothapatna by the state government with support from the IT industry. There are also plans to set up a 100-acres IT Park adjacent to the institute to house the IT companies.
The state government has been actively promoting Bhubaneswar as an upcoming IT/ITES destination. Recently, to give further push to the sector, an International Institute of Information Technology (IIIT) was launched at Gothapatna by the state government with support from the IT industry. There are also plans to set up a 100-acres IT Park adjacent to the institute to house the IT companies.
Real estate prices are expected to rise further with demand arising from various MNCs and IT/ITES companies. Besides, with a number of SEZs coming up in the neighbouring districts, including a 4,000-acre SEZ by POSCO, the economy of the city will be further strengthened.
The government has called for participation from the private sector in industrial estates like Agro-tech Park and Diamond Park in the region. The administration has also taken up major infrastructure projects to improve connectivity between key cities, viz. Cuttack-Bhubaneswar and Sambalpur-Rourkela. Moreover, work on airport expansion and modernisation is also underway. Besides these, a proposal for International Airport and Air Cargo Complex is under consideration. All these developments are anticipated to augment the overall attractiveness of the city and thereby draw investors in various sectors to the city.
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