Sacred real estate can be India's next booming sector

Source: The Economic Times

Indians are rushing to sacred places in huge numbers. Spiritual tourism has been booming in recent years. The limited supply of property at sacred destinations is likely to trigger a boom in sacred real estate, the land at a place of pilgrimage which is wanted by hospitality businesses as well as developers.

Bollywood actor Amitabh Bachchan has acquired a land parcel in a 7-star mixed-use development of The House of Abhinandan Lodha (HoABL) to build a house near the Shri Ram Janmabhoomi Temple in Ayodhya that is set to be inaugurated in the next few days. The veteran actor has bought the land parcel in The Sarayu, a project spread over 51 acres including residential plots, villas on a total 31 acres and even high-rise luxury apartments on 15 acres in the holy city, the developer said in a release. While the company has not disclosed the plot size and its value, it is believed that the actor’s plot size is over 10,000 sq ft valued at nearly Rs 15 crore, ET has reported.

The rush for sacred real estate

Ayodhya has seen property rates skyrocket after the Supreme Court verdict in the Ram Janmabhoomi case which cleared the way for the construction of the Ram temple. In 2019, before the verdict, the prices were between Rs 400 to Rs 700 per square foot. Now, they have gone from Rs 1,500 to about Rs 3,000 per square foot. Similarly, outside the city, they were between Rs 1,000 and Rs 2,000 a square foot, now they have gone to Rs 4,000 to Rs 6000 a square foot.

Earlier, Varanasi witnessed a property boom when the government built the Kashi Vishwanath corridor. The property boom at religious destinations such as Ayodhya, Varanasi, Vrindavan, Rishiksh, Amritsar and Shirdi is fuelled by demand for hotels and second or retirement homes.

"If we combine the entire region, including Kashi Vishwanath Corridor, Banaras and Ayodhya, the entire belt is going to see massive interest from developers and buyers, especially hospitality. Also in the outskirts of Ayodhya we are seeing massive interest for second homes. It has already seen a massive jump in land prices," Prashant Thakur of Anarock Group has told ET Now,

HoABL, which is building the 7-star mixed-use project in Ayodhya, plans to invest about Rs 3,000 crore in Uttar Pradesh. "We wanted to make Ayodhya the starting point of our journey in UP, followed by Vrindavan and Banaras.

Samujjwal Ghosh, the CEO of HoABL, told ET Now.

The business of worship

A year after it was renovated, 7.3 crore people visited Kashi Vishwanath Dham in 2021, while only 80 lakh had visitd the year before. Rising spiritual tourism and religious fervour created by renovation of key destinations, such as of Varanasi and the plans to renovate Vrindavan, translates into a huge business boom.

As per the latest data from the Ministry of Tourism, places of worship in India made Rs 1.34 lakh crore in 2022, up from Rs 65,070 lakh in 2021. Also, a total of 1,433 million domestic tourists visited these sacred sites, along with 6.64 million foreign tourists. Although the revenue earned has not hit pre-Covid levels yet, the recovery has been strong, say experts.

A 2017 report by the National Sample Survey Office (NSSO) estimated India's travel economy linked to places of religion to be worth Rs 3.02 lakh crore, which was nearly 2.32% of India's GDP then. In reality, however, it may be even larger as religious tourism is supported by a large unorganised market, which thrives on the sidelines, as a host of religious items and services go unaccounted. Moreover, it is also driven by informal, unprotected labour.

Such a vast and still growing religious travel economy throws up massive scope for real estate development.

The huge build-up

The newly revived interest in visiting religious destinations is boosting real estate prices as hotel companies and developers vie for limited supply of unenumbered land at these places.

The Abhinandan Lodha group, along with its marquee hospitality partners, plans to invest over Rs 2,000 crores to build five luxury hotels across India's iconic heritage and cultural cities including Ayodhya, Benares, Vrindavan, Shimla, and Amritsar.

Budget hospitality chain Oyo said on Monday it plans to launch 400 new properties in major spiritual hotspots of the country, fuelled by a surge in domestic travel and rising interest in spiritual tourism. Oyo said it is gearing up to launch 400 properties in popular destinations such as Ayodhya, Puri, Shirdi, Varanasi, Amritsar, Tirupati, Haridwar, Katra-Vaishno Devi, and the Char Dham route by the end of this year. The company said the move comes in response to a 350% increase in searches for Ayodhya on the Oyo platform over the past year, driven by the upcoming opening of the Ram Mandir on January 22.

While the Rs 85,000 crore infrastructure investment will happen in and around Ayodhya in the next 10 years, a number of other pilgrimage centres such as Vrindavan and Mathura will also see infrastructural development and renovation. Redeveloped religious destinations will attract even more people.

Top hotel companies such as IHCL. ITC and Wyndham are already building properties at various religious destinations. Developers such as the Abhinandan Lodha group are the next in line who will cater to second and retirement homes at such destinations as development leading to better civic amenities will attract more outside home buyers.

The Uttar Pradesh government has planned a 1,000-acre township in Ayodhya which will be a blend of contemporary and traditional architectural elements. "Developers from all over the country are keen on acquiring land in Ayodhya as it will attract an influx of tourists. Government land is a safer bet for developers, and a planned township will attract huge investment," Amit Agarwal, founder and MD of 2A Company, a real estate firm, has told ET. As other religious destinations too grow and acquire better civic amenities, they will offer a huge untapped potential to residential developers.