Developing a planning framework for transformations in commercial real estate: a case of Lucknow

Abstract

The rapid expansion of commercial real estate is no longer confined to Tier 1 cities; it has also become a significant trend in Tier 2 cities. This shift is driven by economic growth, infrastructure development, changing consumer behavior, and the increasing demand for commercial spaces. These cities offer lower operational costs, improved connectivity, and growing consumer markets, making them attractive investment destinations. This transformation is marked by rising property prices, influenced by the expansion of commercial real estate. To analyze this phenomenon, a comparison is made between 2014 and 2024 data for two key locations in Lucknow: Hazratganj, the oldest Central Business District (CBD), and Gomti Nagar, the new CBD. By examining these micro-markets based on their development timelines, the study evaluates conventional indicators such as accessibility, economic, demographic, infrastructure, and parcel-specific factors alongside contemporary indicators like Internet search volume data to understand their influence on market price variations. By incorporating Internet search volume data, the research aims to determine whether digital footprints can predict price trends and commercial expansion patterns. The study employs a combination of quantitative and spatial analytical methods to examine the correlation between these indicators and market price variation. Linear multiple regression is used to measure the statistical relationship between economic, infrastructural, demographic and digital indicators with fluctuations in commercial real estate prices. Furthermore, spatial analysis techniques such as Kernel Density Estimation (KDE) and Standard Deviational Ellipse (SDE) analysis are conducted to identify emerging patterns in the conversion of residential zones into commercial areas. These methods help visualize the spatial shift in land use and highlight hotspots of commercialization, providing insights into the directional trends of urban transformation. Given the rapid and often unregulated conversion of residential areas into commercial spaces, this study proposes a planning framework with a micro-zoning approach to strategically guide commercial expansion while preserving the integrity of residential neighborhoods. Micro-zoning involves a fine grain regulatory framework that balances commercial growth with sustainable urban development. By integrating market trends with spatial planning, this research aims to develop a framework that ensures controlled expansion, prevents haphazard building use conversion, and mitigates potential conflicts between residential and commercial interests. The findings will assist city authorities, policymakers, planners and real estate investors in making informed decisions that foster balanced and sustainable urban environments. Keywords: Commercial Real Estate, Indicators, Market Price, Residential, Commercial, Transformation