We are talking about Mangalore, coastal city of Karnataka, about 300 km from Bengaluru.

The city is changing rapidly and it is just a matter of time before Mangalore makes its mark on the world map. Today, it is rated as the second-fastest growing Indian city in terms of real estate boom, according to the global real estate consultant Knight Frank.

Investors targeted Mangalore rather late. First they explored Bengaluru and then moved on to Mysore.

Real estate prices have hit an unimaginable high in the past six months, thanks to various developers showing interest in the place. The advent of information technology units has contributed to the city’s rapid development.

Now with both cities having almost reached a saturation point, the next stop has to be Mangalore. The upgradation of the Bajpai Airport to an international one is one of the reasons for investors to show a keen interest in this city.

The revamp ensured that the city is now well connected by land, water and air. Moreover, unlike Bengaluru and Mysore, plenty of land is available, especially in the outskirts of Mangalore, drawing IT giants as well as other investors.

According to the Knight Frank report, Mangalore is among the eight tier-III and tier-IV cities in India that are emerging as big growth centres.

IT major Infosys has already set up base in the city. Several other IT majors, who have been cribbing about the lack of infrastructure in Bengaluru, are also expected to shift operations to the city soon. This would mean that BPOs (business process outsourcing units) too would come up in Mangalore leading to further growth.

Apart from IT and BPOs, Special Economic Zones would also play a major role in the development of Mangalore. Infosys is setting up a 300-acre facility at the IT SEZ in Konaje. Satyam and Wipro will also be setting up base at a 200-acre campus in Ganjimutt where an export promotion park is coming up.

ONGC is planning to invest Rs 35,000 crore (Rs 350 billion) at the yet-to-come up SEZ in Mangalore. The city is already home to big companies like Mangalore Refinery and Petrochemicals Ltd, Mangalore Chemicals and Fertilizers, BASF, Nagarjuna Power, GMR Group, Suzlon, etc.

The change: These factors have had a straight impact on the prices of real estate. According to Ranjan Shetty, a leading real estate developer in Mangalore, there has been a drastic increase in the prices of land and it is going the Bengaluru way.

Land prices at Kadri, one of the best residential areas, stand at about Rs 700,000 per cent (1/100th of an acre or 435.6 sq ft). The ‘apartment culture’ — so far not too popular in Mangalore — too is on the rise. The prices of apartments (flats) in the city are steadily shooting up. Land that used to cost Rs 1,200 per sq ft is now available at Rs 2,500 per sq ft.

The prices of commercial property too have risen from Rs 500,000 a cent to Rs 25 lakh (Rs 2.5 million) in the past two years. In case of residential property, the prices have shot up from Rs 1,200 per sq ft to Rs 2,500 a sq ft in two years, Shetty added.

Mangalore’s situation is so much similar to Bengaluru where very expensive prices are being quoted, but in many cases there are no takers for the same. Shetty says there are several instances where a fancy price is quoted, but there are no buyers.

This is exactly what happened in Bengaluru too. Builders quoted fancy prices for their apartments and as of today almost half of them lie vacant.

Areas in Mangalore where prices are going up are Falnir and Ballal Bagh. The Lal Bagh area, which was more a blend of commercial and residential complexes, is gradually transforming into a pure commercial area and is competing with areas like Hampankatta and Balmatta in pricing.

Vikram Hegde, a leading advocate in Mangalore, says the city is growing very fast. In fact, it startles one to see so many new complexes and residential buildings coming up at such a rapid pace.

What will Mangalore be like in the years to come? Ten years ago, it used to be a quiet town. The major shopping hubs were Hampankatta and Balmatta. It had two pubs, one discotheque and a couple of ice-cream parlours. The only non-Mangalorean crowd that existed were college students. But the city’s scenario has changed over the years.

Mangalore is a popular tourist centre now. The Kudroli Sri Gokarnanatheshwara Temple, Kadri Sri Manjunatha Temple, Mangaladevi Temple and the Kudroli Mosque are few places of religious importance in Mangalore.

The New Mangalore Port, St Aloysius Chapel and Sulthan Battery are the other places of religious importance in Mangalore. Proximity to the temple city of Udupi make tourists flock this place.

It is worth mentioning that banks like Corporation Bank, Syndicate Bank and Karnataka Bank were launched in the Mangalore. The city also houses the country’s most prestigious institutions like the Kasturba Medical College, SDM Law College and the St. Aloysius College.

All this is bound to change, says Hegde. There will be more people from outside coming into the city and that, in turn, will ring in rapid social change. Mangalore might soon get rid of its laid-back culture and become like Mumbai, where no one has any time for others, says Hegde.

A lot is being done to attract people from outside to invest in Mangalore. The airport upgradation is one of the major factors. Apart from this, the Mangalore Corniche project will soon become a reality and is expected to give the city a new feel altogether. The Corniche is a 31-km promenade along the sea.

Mangalore currently lacks in the hospitality sector. There are very few quality hotels in the city. However, now that seems to be changing too. There are proposals from the Hilton, Leela, and Intercontinental groups for setting up hotels in and around Mangalore.

Will Mangalore lead by example or will it go the chaotic Bengaluru way? Only the time will tell.