Pune Property: The Power of Location

What are the factors that make a residential project popular? Speaking in contemporary real estate terms, there are some fundamentals:

1. The builder’s brand equity

2. Attractive elevation, with tempting amenities

3. Competitive property rates

4. Location

One could argue that a builder’s brand, driven by reputation and prestige, shouldn’t be a major consideration. However, the fact is that a well-known developer’s banner sells project simply because it is a trusted name on the market. Such a builder is known for quality construction, clean titles, decent property rates and overall transparency.

Of course, elevation and amenities count for a lot, too. After all, a property is basically defined by its physical characteristics. Attractive rates certainly matter, but one should not have to forgo basic quality, aesthetics and proper amenities just for lower rates. However, since Pune is a city of passionate bargain-hunters, this is what often happened in the past – buyers overlooked the fact that a cheaply-priced property does not really appeal.

Fortunately, these days Pune property buyers have become aware that neighbouring Pimpri-Chinchwad offers residential projects that are vastly superior to anything that Pune has to offer – at much lower rates, and in far more pleasant surroundings.

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Which brings me to location – the last but certainly not the least consideration in my list above, and the primary topic I want to address here. Location is a vitally important factor to consider while buying a home in Pune. In fact, location should be a priority consideration.

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What gives location such power on the Pune property market? Take the area near the Pune International Convention Center in Pimpri Chinchwad, for instance. Obviously, a location that is now so popular with property buyers from both Pune and the PCMC area does not win its reputation in a lottery. There are qualifying aspects involved. It is home to the integrated residential project called Woodsville, and is very favourably connected in terms of public transport. The roads are wide and spacious, ensuring that traffic bottlenecks cannot happen. There is ready and limitless availability of water, the scenery is a homebuyer’s dream come true and the development in this area is carefully regulated.

The last point is very significant – regulated town planning ensures a sufficient amount of

open spaces and prevents cluttering. In other words, homeowners in Woodsville are assured that what they see from their windows and terraces today is exactly what they will see ten years down the line. Another developer cannot buy up the plot in front of their unit and build some kind of monstrosity there. The massive green cover is being maintained for ecological reasons, so the generations to come will breathe the same unpolluted air.

The fact that this area is within easy reach of a number of crucial points within Pune as well as from important cities like Mumbai and Nasik has contributed to its popularity. In other words, location – especially from the point of view of a Pune property buyer – should be seen both from both a present and future perspective.

Anil Pharande is President of CREDAI PCMC and Chairman of Pharande Spaces, a leading construction and development firm that develops integrated residential projects in the PCMC area of Pune, India.

On the Pune Property Blog he discusses the market fundamentals that drive one of Pune’s most dynamically emerging real estate investment destination.

You may reprint or quote this article with full credit to the author and a link back to PunePropertyBlog.com

Pune Real Estate: Back On Track

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Mohammed Aslam

Around this time last year, I remember sitting at this very desk and wondering just where we were headed. When July 2009 rolled by, it would have taken a long stretch of imagination to claim that Pune’s real estate market still had its previous potential. I was looking down at the figures and recall feeling quite worried.

I didn’t have to be an economist to know what had happened. Because of the recession, America had put a stranglehold on the IT industry. Software professionals were returning from Silicon Valley by the planefuls, not sure of what to do next. Pune’s real estate market is not a one-trick pony, and it doesn’t rely only on IT expansion and software salaries, but the market was still hurting. More people than ever before were choosing to stay in rental accommodation rather than buy homes, and the corporate sector seemed to be doing little more than holding its breath and doing damage control.

One of my greatest worries was the slew of malls that was going to hit the market at a time when it was probably at its lowest ever. Who were we going to populate them with, both in terms of retailers and customers?

I won’t say that the market is back with all guns blazing, but matters have improved considerably now. The residential sales and retail lease figures for the month of July 2010 look astonishingly different than from this time last year. I always tend to look at retail leasing first, because the health of the retail sector is a rather accurate barometer of what is happening to a city’s economy. On that count, Pune has had an almost miraculous turnaround. The malls I mentioned are opening on schedule, and all have an almost full complement of anchor and vanilla brands, and shoppers are back in force.

It’s not all because of the economic revival, either. Pune’s real estate market may not be in the same league as Mumbai’s, but it does have one advantage over its glamorous neighbor – its players think faster on their feet. Last year, mall developers were keeping afloat by offering hefty discounts to retailers; this year, the entire leasing roadmap seems to have changed. I recall one conversation between a major retailer and a mall developer just last year. The retailer was stating that a pure rental model did not make sense, since he would not make enough business in a downturn to justify it. The mall developer simply said, “That is your problem.”

The terms ‘minimum guarantee’ and ‘revenue sharing’ were alien to Pune’s mall developers a couple of years ago – today, they are an accepted norm, and the primary reason why none of the new malls are standing empty. There are obviously some traditionalists among our developers who refuse to give in to such ‘New Age’ concepts, but I can clearly see that the tide has turned in the favor of progressive pricing models now. Retail real estate in Pune will live to fight another decade.

As far as residential properties are concerned – the sector is moving again since the last six months. We had previously thought that the returning demand would fizzle out by April, but that has not been the case. The impression I get from my discussions with our Homebay Residential team is that Pune’s home buyers are once again convinced of the long-term potential of their investments.

For mid-income homes, the hottest-selling locations are now in western Pune. For one, buyers have the widest choice there because of the large number of projects popping up all over Hinjewadi, Wakad, Pimple Nilakh, Pimple Saudagar, Aundh and Balewadi. Secondly, this influx of projects is serving to keep prices affordable. In western Pune, average residential property rates start at around Rs. 3200/sq.ft. and hover around 4000/sq.ft. The most popular price tags for homes in these areas are between Rs. 30-40 lakh.

Pune’s more central eastern side still commands premium rates because the IT parks, airport, malls and overall level of development give higher value in terms of investment. The rates in highly developed areas like Viman Nagar, Kalyani Nagar and Korageon Park range can go as high as Rs. 15000/sq.ft. In developing Kharadi and upcoming Wagholi, they now range from Rs. 3800-6000/sq.ft.

In fact, Wagholi is a good example of how yesterday’s obscure locations can rise to real estate superstardom within a short time. Last year, Wagholi was still a relative non-entity, but that changed with the six-laning of Nagar Road and the arrival of some of the newest malls (like Ruia’s Market City and Raheja’s In Orbit) in the area.

When viewed against residential, nobody is pouring champagne over the complete return of Pune’s commercial real estate segment yet. Like the rest of the country, Pune’s office space sector awaits the return of greater stability on the global economic front. Over the last one year, only some of the larger multinational companies have started expanding once again.

Most of the real estate deals currently come from local corporates, but the IT sector is also dusting off its keyboards and getting into the act once more. Obviously, Pune has not lost its flavor as one of the hottest outsourcing destinations in the country; we are currently in discussions with two biggies who are looking for some rather impressive seating capacities, but I’d rather not jinx those deals by talking about them now.

There’s money in the system, too – quite a lot of it, going by the manner in which our Capital Markets departments activity has stepped up over the last six months. A healthy number of Private Equity funds are hopping on the Pune real estate bandwagon once again, eager to be part of its success story via joint ventures and buying pre-leased property.

All said and done, a quick look at the crystal ball tells me that Pune will continue to rock in residential and retail real estate. The city is seeing a bigger influx of new residents from cities like Nasik, Sholapur and Kolhapur with every passing year. With the strengthening of the IT sector, commercial real estate will firm up before too long – and, as I already stated, I’m really bullish about Pune’s retail sector.

Prices will move up both in residential and commercial real estate, because supply is going to decrease. This is because quite a few developers had delayed construction during the all-too-recent slowdown, and will therefore not be able to deliver their projects in time for rates to remain where they are now.

Mohammed Aslam is Head – Pune, Jones Lang LaSalle India

(Republished with permission from the Jones Lang Lasalle India blog India Real Estate Compass)

Hearing On Pimpri-Chinchwad Development Plan From Oct 16

Though there is not much movement regarding the clearance of Pune’s Development Plan, the Pimpri-Chinchwad Municipal Corporation (PCMC) development plan will come up for hearing of suggestions and objections by the town planning department from October 16-20.

With 1,690 persons appealing with the town planning department, the total applications are 607, said deputy director of town planning for Pune division Sadhana Naik. “I had heard around 240 appeals last month and the remaining will be heard in October. This will then be forwarded to the government for approval,” said Naik.

The department will make a note of all the suggestions and objections of the DP and send it to the government for the final approval. With 118 modifications in the PCMC development plan, which included buffer zone or green zone surrounding the Moshi garbage depot and the Punhavale garbage depot, incorporation of the floodline as submitted by the PCMC after modifications as well as other approvals which were passed in the GB will be heard out in the hearing, said Naik.

The PCMC development plan was published in 2000 and it was submitted to the government in 2003. Partial sanctions were awared only in August last year. After the substantial modifications suggestions and objections were demanded and the government would clear it after the report of the hearings are submitted.

PCMC senior officials said that the development plan for the PCMC has been pending and if the hearings for the suggestions and objections are heard out, the government can speed up the sanctioning of the plan.

Recently the Corporation had asked the state irrigation department to mark the floodlines of Pavana, Indrayani and Mula rivers on the city development plan and the revised plan is part of the modifications. The development plan of Pimpri-Chinchwad was approved by the state government in 1995.

However, 18 villages were merged with the PCMC in 1997. The process for approval of the development plan of the merged villages is still going on.

A Home In Pimpri-Chinchwad – The Best Choice For Your Children

While buying property in Pune, most home seekers tend to put their children’s needs high on the priority list. This is because in a typical Indian setting, everything that happens within a family revolves around the requirements of its children. It therefore stands to reason that the purchase of a home is – and should – factor this in.

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For us Indians, our kids are our most important consideration. This is why we strive to provide them with every possible good thing – good clothes, the latest and largest toys, a good school, and so on. Providing them with the best possible home is a natural yearning.

It boils down to a simple fact – whether a married couple has children or not while purchasing a home, or the children are still in the ‘planning’ stage, they are a major point of reference. Here are some of the considerations we should therefore take into account while choosing a residence:

Are There Good Schools In The Vicinity?

Pune being the Oxford of the East, it stands to reason that access to the good schools is of primary importance for Pune property buyers. A housing project may offer every desirable facility – but if it does not have a reputable school within easy reach, it does not serve its purpose. The more progressive townships and integrated residential projects have schools within the campus. Even otherwise, there is no shortage of good schools in Pimpri Chinchwad.

Does The Project Feature Children-Oriented Facilities?

Ideally, builders must offer fully equipped children’s parks and playgrounds in their projects. These areas should be free of pollution, since children do a lot of heavy breathing while at play.

While the space constraints and the pollution levels of the central areas in cities like Pune do not permit such facilities, the larger integrated residential projects in areas like Pimpri-Chinchwad do. Remember that children can only thrive when they have enough airy space to play in. Similarly, you should ask about garden areas for family-oriented activities while choosing a home.

Is The Clubhouse Children-Friendly?

If you thought that a residential project’s clubhouse is only for adult entertainment and relaxation, think again. A clubhouse is – and should be – a boon to children. Look for facilities like table tennis and badminton courts, a library and indoor games.

Is There Ready Access To Shopping?

From toddler to teenage years, children have myriad recurring requirements. Fully integrated residential projects such as Culture Crest and Woodsville in  Pune’s PCMC area offer shopping facilities within the project’s perimeter. If this is not the case in your chosen project, at least ensure that you have easy access to shopping centres in the vicinity.

Is There A Hospital With Emergency Room/Pediatric Unit Nearby?

Accidents do happen – poisoning, choking, drowning, fractures and bruises, electrocution… children can get into a lot of trouble while exploring the world around them. There are many medical emergencies than can only be handled at a well-equipped hospital. If the project does not have its own hospital, at least make sure that it is within easy travelling distance from the nearest hospital. This is not an issue in progressive, well-planned areas such as the Pimpri Chinchwad Municipal Corporation, but many of Pune’s newer areas still lack such facilities.

How Safe And Supportive Is The Neighbourhood?

One should definitely keep one’s children’s social needs in mind while selecting a residence. By their very nature, the integrated residential projects and townships now coming up in the PCMC area offer social environments suitable to our children (good neighbours) and are also crime-free zones. If you cannot, for some reason, choose such an ideal neighbourhood, at least find out if there is a police station nearby.

Posted by: Avinash Gokhale is Director – Marketing & Corporate Planning, Pharande Spaces – a leading construction and development firm specializing integrated residential projects in the PCMC area of Pune, India.

PMC Appoints New Panel To Resolve Water, Property Tax Cases

The Pune Municipal Corporation (PMC) standing committee on Tuesday directed the civic administration to appoint a commission to resolve the pending cases with disputes on water tax and property tax.

The committee urged the administration to resolve the disputed cases before incurring two per cent tax on the dues of property tax. “The administration has assured of setting up the commission with immediate effect,” said Arvind Shinde, chairman of standing committee. There are pending dues of Rs 200 crore of water tax and Rs 75 crore of property tax with the civic body.

PMC To Propose Appointment Of Arbitrator For Water/Property Disputes

PUNE: The Pune Municipal Corporation (PMC) is likely to come up with a proposal to appoint an arbitrator for settling cases related to property and water tax disputes.

The move assumes significance as there are nearly 350 disputed cases related to taxes and the total amount which is to be recovered is nearly Rs 280 crore. The cases have been pending in courts for many years. The issue came up for discussion at the standing committee on Tuesday.

Civic officials told the committee members that around Rs 210 crore dues pertain to water taxes while dues worth Rs 70 crore pertain to property taxes.

Senior committee member and corporator Ujjwal Keskar suggested that the municipal corporation should appoint an arbitrator to resolve the tax disputes. He also suggested that the municipal corporation should first announce an amnesty scheme for citizens to pay their tax dues. He pointed out that a few years back, when the corporation had announced an amnesty scheme for new property holders, nearly 14,000 property owners had come forward to pay their taxes. According to Keskar, the civic administration has agreed to both the suggestions and is likely to come out with a proposal next week for appointing an arbitrator.

Meanwhile, the committee deferred the hoardings policy tabled by municipal commissioner Mahesh Zagade. Civic officials told the meeting that there are a total 2,313 authorised advertisement hoardings in the city, but the number of unauthorised hoardings is over 5,000.

The committee also discussed the issue of taking action against jewellery shop owners who have not paid octroi on gold and silver since April this year. The administration stated that it had issued notices to the jewellers in this regard. The committee was informed that the new Rajiv Gandhi hospital in Yerawada will start functioning next month.

Meanwhile, committee chairman Arvind Shinde directed the PMPML to stop the CNG pump for autorickshaws at the Narveer Tanaji Wadi bus depot as the pump had been started without taking any prior permission from either the PMC or the PMPML board of directors.

Pune Property Tax Defaulters To Face 2% Monthly Fine

PUNE: The Pune Municipal Corporation (PMC) has decided to execute the state government’s notification to impose a two per cent penalty on people who fail to pay their property tax for the first six months of the year 2010-11 before September 30.

The government notification of May 31, 2010, has authorised the civic body to impose a fine of two per cent on the tax amount for every defaulting month if the property tax is not paid within a given period of time. The second instalment of the property tax has to be paid before December 31, 2010.

In the last two years, the PMC has brought nearly 80,000 properties under its tax net. However, an estimated 45,000 properties still remain out of its reach. The standing committee has repeatedly told the administration to make an effort to widen its tax net. Once the unassessed properties are covered, the civic body is expected to get an additional revenue of Rs 100 crore to 150 crore.

The PMC’s tax collection and assessment department has already submitted a plan regarding this to the standing committee. After octroi, property tax is a major source of revenue for the PMC. The department has proposed that digital pictures of all properties be taken for records and an aluminium plate be fixed on each property, identifying its survey number and other details.

Meanwhile, in order to improve collection of property tax, the civic administration has proposed that zone-wise agencies be appointed to assess properties and bring unassessed properties under the tax net.

Pune Real Estate: Issue of Illegal Constructions Resurfaces

The issue of illegal constructions has resurfaced on the agenda of civic bodies. Pune Municipal Commissioner Mahesh Zagade, who found out that there was only one building inspector per ward office to keep check on construction activity has decided to set up a new system for tackling the issue of illegal constructions. On the other hand in the neighbouring Pimpri-Chinchwad, 25 corporators who have constructed illegal buildings find themselves in the dock as the state government has asked Dilip Band to probe the matter and suggest necessary action.

“There is no doubt illegal construction has come up in the city in last few years. There is one building inspector for each ward office who has the responsiblity of checking the construction related activities. The person has to check construction that comes up as per the permission and also tacke action against illegal construction. It is a difficult job for one person,” said Zagade.

Zagade said the construction activity is at peak in the suburbs while very minimum in the old city area. “Thus, there is a plan to shift the manpower available to the ward office that has more construction activity from the place where there is not much work,” he added.

The municipal commissioner has directed all the zonal commissioner to prepare list of illegal constructions in their jurisdiction so that action can be initiated against them.

Woodsville — The Perfect Integrated Residential Complex In PCMC

Woodsville, the ultra-modern integrated residential complex in Pune’s burgeoning twin city of PCMC, is a home-owner’s most cherished fantasy transformed into larger-0than-life reality. At Woodsville, you and your family can finally live life to the fullest. An exclusive, fully facilitated and self-sufficient 50-acre community, Woodsville is actually your very own town within a city.

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Rising twelve, eighteen and twenty two storeys high against a vista of green gardens, Woodsville consists of stately buildings housing 1, 2 & 3 BHK apartments. The striking façade is an arresting combination of elegance & individuality in communion with nature.

The Great Outdoors At Your Doorstep

The large podium garden is the centerpiece, where children can make merry in complete safety, and senior citizens can enjoy leisurely walks or get together with their neighbours, savouring the peaceful ambience. A clubhouse with indoor games, a swimming pool and cool water bodies afford healthy recreation options. The towers form a classic backdrop to this pastoral mosaic.

Spaces To Luxuriate In

The apartments, which reflect the magnitude of Woodsville, are generously sized, ranging from spacious 1 BHKs admeasuring 665 sq.ft. , large 2BHKs of 913 to 1033 sq.ft. up to enormous 1,601 sq.ft. 3 BHKs. Living spaces are laid out to receive plenty of natural light and fresh air making every homecoming a welcome experience.

Click here to learn more about Woodsville

Pune Shifts To Top Gear As Automobile Hub

The global financial meltdown only underscored the importance of cost control and cost effectiveness for auto manufacturers

The metamorphosis of Pune city over recent decades from a verdant, easy-paced abode of choice for retirees to a bustling metropolis has been complete and today, although it is a major information technology hub, the automotive sector occupies pride of place as the prime mover behind the rapid development of Pune and surrounding areas.

Detroit of India

The proliferation of automobile manufacturing units and component suppliers that populate the landscape of outer Pune, particularly Pimpri-Chinchwad, Chakan and Talegaon areas have increasingly earned it the sobriquet of being the ‘Detroit of India’ and it continues to elicit interest and attract investments despite challenges from the newer auto hubs dotting outer Chennai and Gurgaon near Delhi.

The entry of the heavyweights of Indian automobile industry — Tata Motors and Bajaj Auto — in the 1960s resulted in and subsequently escalated the mushrooming of allied industries that catered to the outsourcing requirements of these principals. While the first original equipment manufacturer (OEM) was Mercedes-Benz in the 1990s through a joint venture with the Tatas and later on its own, others followed suit but only in trickles.

However, in this millennium, global heavyweights like General Motors, Fiat, Volkswagen and more recently India’s largest utility vehicle maker Mahindra & Mahindra (M&M) have committed large investments in this region and their entry seems to have opened the floodgates for auto investments here.

The global financial meltdown only underscored the importance of cost control and cost-effectiveness for auto manufacturers and further re-affirmed their decision to move to cheaper manufacturing locations available in India, particularly as quality was not going to be compromised.

Today, the Pune automobile landscape includes the ‘who’s who’ of Indian and increasingly international automobile majors.

Tata Motors is the largest followed by Bajaj Auto, Force Motors, Mahindra Two-Wheelers, Mercedes-Benz, GM, JCB construction equipment, Volkswagen, M&M, Premier Motors and Fiat.

The new projects include the Fiat-Tata joint venture at Ranjangaon with a proposed investment of Rs.4,000 crore, GM’s Rs.1,400-crore investment with a further Rs.900-crore expansion, Volkswagen’s project of Rs.3,800 crore, Mercedes’ Rs.250 crore investment and Mahindra & Mahindra planning a huge Rs.5,0000-crore investment by 2012. Bajaj Auto proposes Rs.300-crore investment in two-three wheelers and a further Rs.1,000-crore investment in the car plant.

Among large auto suppliers are Cummins Engines which set up shop in the 1960s with Kirloskar and later alone, Kirloskar Oil Engines and Bridgestone’s new Chakan plant for tyres with an investment of Rs.2,600 crore.

Commitment by MNCs

In the last 18 months, large multinational auto component suppliers like ZF Group of Germany have committed around Rs.50 crore, Prembo of Italy is setting up a Rs.100-crore disc brakes facility and Norma of Germany plans to invest euro 3 million (about Rs.18 crore).

Pune’s USP

In addition to the auto OEMs (original equipment manufacturers), Pune has a range of Tier-1, Tier-2 and infrastructure suppliers, including Bharat Forge, among the top forging companies in the world and Sandvik’s large cutting tools facility.