Amritsar’s Emergence As A Real Estate Hotspot
Amritsar, famous for the Golden Temple, is a major spiritual and cultural centre in India which attracts more visitors than Taj Mahal. On any given day, nearly 1 lakh religious tourists visit the city. Amritsar is the second-largest city of Punjab after Ludhiana, and the most ancient and historic city for Sikhs in Punjab. It is also the most popular destination for non-resident Indians (NRI) in India.
The city enjoys a strategic location with good connectivity to prime cities of India and Pakistan, as it is only 28 Km from the border of Pakistan. Along with excellent connectively through road and rail transport, the city houses an international airport with a capacity of 150 commercial flights per week, both domestic and international. For the population of 1.21 million (2016) in Amritsar, a 31 km-long BRT corridor is nearing completion stage to ease traffic congestion and improve public transportation in the city.
The urban population comprises of 34.08% in the district, with 80% of this population based in Amritsar City. Amritsar has a radial and ribbon-style growth pattern, emanating from the city core and expanding towards the northern and the eastern directions.
The city’s economic fabric is diverse, with manufacturing and the service sector forming the backbone and about 93% of the workforce engaged in secondary and tertiary services. Historically, the city has been part of international trade routes like the ancient Silk Route from China to Europe. With improvements in the bilateral ties with Pakistan, Amritsar is likely to re-emerge as a ‘Gateway to West’ and prominent trade hub of Northern India.
There are approximately 25,000 industrial units in Amritsar district, with the major commodities of production and export being woolen blankets, embroidered clothes, printed textiles, shawls, carpets, local cuisine perishables, etc. It is also among the 20 focal point industrial estates identified by State Government of Punjab. Amritsar is the largest grain and commodity trade market of Punjab, supported by strong educational and healthcare facilities which provide ample opportunities for growth of the city.
The city is strongly visualized to captivate upcoming investments into real estate sector in the near future due to following attributes:
- Emphasis on heritage and spiritual tourism:
The Government’s Heritage City Development and Augmentation Yojana scheme (HRIDAY) has chosen Amritsar as one of the heritage cities of India. The scheme focuses on holistic development of 12 heritage cities by encouraging aesthetical appeal and accessible, informative and secured environment. Under this scheme, the following projects are proposed to be developed:
- Facade of the Dharam Singh Market building
- Roundabouts at Fuwara Chowk and Ambedkar Chowk
iii. Town Hall with horticulture and landscaping
- Night-time illumination of key buildings
- Heritage park at Jallianwala Bagh
- Sculpture front and 800-meter heritage street from Townhall to the Golden Temple.
With Amritsar as one of the chosen heritage cities, the city is expected to deliver improved facilities and amenities to pilgrims from across the world and thereby encourage more tourism growth.
- Increased connectivity
As the city is growing radially, the widening of existing roads and development of a Ring Road are underway. Another major infrastructural development is the expansion and modernization of Amritsar’s airport. 1,613 hectares of land are required for this, of which 44 acres have already been acquired. A 31 km BRTS corridor is under construction in the city. A High Speed Rail Corridor between Delhi-Chandigarh-Amritsar is another major infrastructural initiative which will boost tourism, reduce travel time and improve Amritsar City’s connectivity with the rest of the country.
- Industrial developments to boost economy
The Ministry of Commerce and Industry has proposed the 550,000 sq km Amritsar-Delhi-Kolkata Industrial Corridor with an investment of INR 5,749 crore in the first phase. This industrial zone will be spread across 20 cities in seven states and be built along the 1,839 km-long Eastern Dedicated Freight corridor between Khurja and Mugalsarai. ADKIC will significantly boost industrial employment and act as a growth catalyst.
In the first phase, every state could promote at least one cluster of about 10 sq km area as Integrated Manufacturing Cluster (IMC), in which 40% area would be earmarked permanently for manufacturing and processing activities. This project is expected to attract significant investment from national and international players to Amritsar. Development of activity nodes such as IT Parks, SEZs and Industrial estates will boost the city’s economy and create a firm employment base. For this, a 100-acre textile SEZ with an investment of INR 1,861 crore, an industrial Park on 62 acres for power loom, electroplating, dyeing, etc. and IT Parks have been proposed in Amritsar.
- Top-ranked city in Round # 2 of Smart City Challenge
Amritsar topped the list of 27 new Smart Cities announced in round two by Urban Development ministry under the Smart City Mission. Under the Smart City challenge, a city has a focus on developing self-sustainable civic infrastructure, public infrastructure and e-governance. The compact area of the walled city, which is more than 950 acres, is proposed to be developed under the retrofit programme, while Katra Ahluwalia and Majith Mandi (area of 50 acres) will be developed under the redevelopment programme. The Smart City initiative will vastly improve Amritsar in terms of liveability, sustainability and economic development, and advance the city’s growth prospects.
- Improving education and healthcare facilities
Amritsar already has well-established healthcare and education infrastructure. There are more than 30 private hospitals, many nursing homes and yoga centers in the city. Indraprastha Apollo Hospital also has plans to set up another hospital in Amritsar. These super-specialty hospitals will have world-class facilities.
The 60-acre Indian Institute of Management (IIM) Amritsar is the 15th Indian Institute of Management being set up by the Ministry of Human Resources Development with the support of Government of Punjab. IIM Amritsar has commenced operations and activities in the transit campus located inside the Punjab Institute of Technology, Government Polytechnic Compound. The institute has been conceived to provide world-class management education to meet the requirements of enterprises across sectors, and produce highly skilled management professionals.
Residential Market: On A Growth Path
The real estate business in the city was stable, though due to frequent changes in norms, property prices remained stagnant for the past 1-2 years. Currently, Amritsar has adequate supply of residential units, with many new township projects launched along the national highway and airport. The primary reason for this inclination is the predominant sentiment in Amritsar favouring land rights. Further, with a number of malls, multiplexes and townships under construction in Amritsar, the demand for residential real estate is expected to remain strong.
The old city area along the Civil Lines is an established residential corridor comprising of plotted developments, and commands the highest pricing. Other high-end residential localities are Green Avenue, White Avenue, Basant Avenue, Ranjit Avenue and Kennedy Avenue. The prices of plotted development in this region vary in the range of INR 35,000-60,000/sq.yd. Affordable plotted housing developments in locations within the city which are more than 8-10 km from the Golden temple command rates between INR 15,000-25,000/sq.yd.
Towards the outskirts of the city along national highways and airport, there are many residential township projects promoted by the reputed national and regional level developers. In this corridor, the prices of plotted developments range from INR 10,000-18,000/sq.yd. and apartment price ranges from INR 2,300-4,000/sq.ft.
Retail and Office Markets: Transformation Evident
In Amritsar, the commercial sector is largely in the form of high street retail markets, some organized malls and industrial houses. The city’s commercial market was not significantly office space-driven, and the demand for real estate has by and large been for residential, agricultural and industrial property in past years. Keeping in trend with the organised retail mall culture, Amritsar also has a few specialty malls.
This trend has created business opportunities for developers for developing commercial spaces, and has also opened the doors for investments into the retail sector by various retailers. Moreover, as Punjab is inviting the service industry besides its two main occupations of business and agriculture, the demand for residential and commercial properties is also growing in the city. Sensing this, realtors are making a beeline for the city as it gets ready to embrace faster economic and real estate growth.
Office space demand for organized Grade A and B spaces on the outskirts of the city’s core market area has been sluggish; a majority of the occupiers prefer to position themselves in Amritsar’s established markets as these provide them better access to their clientele. However, the current outlook has changed drastically by shifting towards uptake of commercial spaces in select micro markets. Prime locations for commercial space in Amritsar are Ranjit Avenue, Mall Road and Lawrence Road, which are characterised by high absorption and limited supply.
Prevailing average rental values in prime retail cum commercial areas such as Mall road, Ranjeet Avenue and Lawrence road vary between INR 40- 120 per sq. ft. per month depending upon the grade of building, floor rise and specifications among others. These locations typically house buildings which have retail on lower floors with top floors occupied primarily by BFSI sector. With the increase in demand from BFSI sector and retailers, many big developers are planning to develop retail cum commercial office spaces in the city.
Due to comparatively cheaper realty prices and many proposed infrastructural improvements, Amritsar is expected to become a hub of residential, commercial and retail activity in the region going forward. Realty experts are very upbeat about the growing interest from investors in Amritsar, which has not only augmented its economic growth but also positioned it prominently among the fastest-growing tier-III cities in India. Amritsar is now well on the way of transcending its image as a ‘holy city’ and transforming into a prime real estate investment destination.