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Smart cities: An Opportunity for real estate sector

Samir Chopra, Founder & CEO, RE/MAX India

Apr 15, 2015 12:46

In line with several other initiatives in making India take a major leap in the race of development at a global level, the building of Smart Cities is definitely a rational decision taken by the Indian government towards its execution.  As a matter of fact, India is the seventh largest country by area and as per the current statistics, we have also become one of the fastest growing economies & are looked up as the newly Industrialised country in the world. There is surely a huge potential for the development of Smart Cities but the question is on how will this be strategized and executed.

There are a number of questions that arise with reference to the execution of this plan as the residents of the cities in India have already been facing a number of problems due to low maintenance and poor planning. The smart cities will not only make life simpler and much more comfortable to its residents but also will help us in efficiently utilizing our resources and give a next-level infrastructure to our future generations. With the usage of information and communication technologies to develop more organized public services, it is also a big opportunity for the Real Estate sector as it is a very good investment for the investors with a long-term vision.

One factor behind the need for smart cities is the international call for action in response to changes in the global and urban environments. There are problems like resource depletion, urban issues, and other difficulties brought about by climate change and increases in the size and concentration of population. Smart cities intended to boost long-term economic growth and global competitiveness over the next 10 years and with a significant share of investments coming from foreign governments and private sector inflows, the dream will definitely become a reality.

The potential economic impact from the development of India's smart cities will act as a significant catalyst for economic growth through a number of drivers, including increased foreign direct investment (FDI), accelerated development of Real Estate Investment Trusts (REITs), increased competitiveness and job creation. Not only will investment into sectors like roads, airports and smart cities create a better and a next level infrastructure, but it will also generate private equity investment opportunities into the core sectors. Though it a very challenging concept especially in India because of the existing socio-economic conditions but an effective leadership and an optimum utilization of the resources by the players in each sector involved in this concept can deliver the smart infrastructure. All individuals at every level starting from the investors to the executors have to be actively involved in the multiple operational and the infrastructural developments.

Urbanization in India has significant implications for the future development of the country and the coming generations will exert tremendous pressure on urban infrastructure and services. It is, therefore, imperative that we find innovative solutions for the urban challenges of growth and sustainability. Additionally, green growth strategies can build environmentally sustainable cities.

Though the concept of smart cities is relatively new in India and it is an ambitious plan to upgrade urban India but together we are well on the path to creating them.The government has planned to set up the concept of smart cities in Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Maharashtra, Manipur, Odisha, Punjab, Rajasthan, Sikkim, Tamil Nadu, Pondicherry, Terengganu, UP, Uttrakhand and West Bengal. We at RE/MAX India are positive about the whole concept and are sure that with such concepts, the projected development of India by 2020 will be achieved.