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Suburbs are the new growth engines. Gurgaon, Noida, Thane, Howrah, Kancheepuram... the list is endless. With the realty boom continuing, suburbs are fast catching up with cities in spreading the consumer culture far and wide. With the rising population in suburbs, marketers now have a new avenue to spread their message. A look at how suburbs are leading the way. Call it what you could-a satellite town, a city's outskirts, neighbourhood or purlieu. But suburbs in India have clearly come out on their own to become big enough markets in themselves. Suburbs are no longer on the outskirts of spending charts. New consumers, new industries and new money are forming the holy trinity driving consumption from Noida, Gandhinagar, Howrah to Kancheepuram. For a country like India that contains a
large number of Urban Agglomerations (UAs), suburbanisation has drawn
little attention since the last many years. But, suburbanisation seems
imminent in India's UAs. The demand for real estate is rising as incomes
are rising, and the middle class is steadily expanding. Further, demand
for land and real estate is increasing due to the booming Information
Technology (IT) and BPO (Business Process Outsourcing), and retail
services sectors. India caters to slightly over 60 per cent of the $1.8 billion offshore BPO market. Taking the average space requirement of 100 square feet per person, it is estimated that the additional space needs of employees would be 100 million square feet over the next five years. The space requirement follows from the additional 1.54 million IT professionals that would be employed over the next five years. This indicates that India needs to add 20 million square feet of space each year, much greater than the commercial real estate space that is developed currently. Not surprisingly, a majority of suburbs are growing much faster than mother-city. Thane leads Mumbai by almost a percentage point (9.8 per cent to 9 per cent annualised growth till 2015), Salt Lake & Dum Dum pip Kolkata by a handsome 2.7 per cent (7.6 per cent and 4.9 per cent); Hyderabad trails Rangareddi by over a per cent (8 per cent and 9.2 per cent). Perhaps the big consolation for Gurgaon to make up on its still small market size is its highest expected growth rate, 13.6 per cent, among all top 10 suburbs. However, not all suburbs are growing faster than their parent towns. Faridabad, Kancheepuram, Howrah and urban areas of South 24 Parganas have an annualised growth rate (till 2015) lower than their respective parent towns. So, while Delhi will grow by 10 per cent, Faridabad will average just 7.1 per cent. Kancheepuram, at 4.6 per cent, will lag Chennai (8 per cent) by a huge 3.4 per cent, and Howrah & Alipore (with 4.7 per cent growth rate) will just about catch up with Kolkata's 4.9 per cent. Persons have suburbanised as urban agglomerations have naturally evolved, and persons as well as households suburbanise, consistent with historical trends. Employment suburbanises in response to availability of labour force with specific skills one measure of which is the literacy rate. In addition, manufacturing and trade/commerce jobs are sensitive to wage costs. The logical question to ask is: does increasing suburbanisation of urban agglomerations imply that individual UAs can suburbanise forever? There is an intense conflict between suburban development and rural land uses in the context of developing countries. It is likely that suburbanisation in the Indian context implies conversion of a large number of rural areas into urban areas (increase in the number of UAs phenomenon, for instance, over 1991-2001, there has been an increase in the number of UAs from 275 to 375 in India). If this trend continues, India is more likely to have a more extensive rather than intensive urbanisation phenomenon. That is, more number of cities rather than more growth of existing cities. That way, suburbanisation means that the rural hinter-lands of the country would benefit from urbanisation, public services and overall growth.
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