The economic slowdown might have hampered the investment in real estate across the country but in Pune it seems that the investor demand is higher compared with other major cities in the country. According to a proprietary real estate survey carried out across eight cities in the country homebuyers are primarily interested in mid-income housing in Pune.
The survey was carried out by ICICI Securities among 2,697 online, 6,767 offline buyer respondents as well as 57 property consultants. As per the survey, Indian homebuyers are cautiously optimistic about the property prices. They are primarily interested in mid-income housing (Rs. 2-5 million) and are conservative on ticket size.
End-user demand is higher in Mumbai, Hyderabad and Bangalore, while investor demand is higher in Ahmedabad and Pune.
What is it that makes us comfortable with real estate and skeptical about financial assets? One, you can touch and feel land but not your part-ownership of a company. Two, land is not traded every microsecond, like financial assets. We are forced to be patient with real estate and forced to be impatient with financial assets. Long-term investors in equity keep checking stock prices every day! They never venture to go out and check the price of the flat they bought or of the parcel of land they acquired on the fringes of some city…
While buying land, investors do far more homework. Since it is a large chunk of money for a single deal, they make their own enquiries and then take a decision by themselves. With regard to financial assets, they can buy a tradable security for a few hundred rupees. And, they do not understand what determines stock prices, so they tend to go along with either a trusted financial advisor…
In real estate, options are available to buy land or a flat or an office or a warehouse, etc. You can buy an asset yielding revenues of 6% and above. In stocks, the yields are far lower. As regards appreciation, you will perhaps get the same returns over a decade or two; but real estate may appear the surer bet.
The spell cast by the global meltdown in 2008-09 is finally wearing off, as both office and retail space are back in demand. However, most of the development in 2010 is expected to happen in tier-I cities of NCR, Mumbai, Bangalore and Chennai, thanks to a new generation of companies that are considering offshoring for the first time in these destinations.
According to global real-estate consultant, Jones Lang LaSalle Meghraj (JLLM) about 60.9 million square feet (sq ft) of office space is expected to become operational in seven Indian cities — including NCR, Mumbai, Pune, Chennai, Kolkata, Bangalore and Hyderabad — during 2010. The tier-I cities of NCR, Mumbai, Bangalore and Chennai are expected to contribute around 74% to this supply.
The Pimpri Chinchwad New Township Development Authority (PCNTDA), popularly known as Pradhikaran, has been a major catalyst in the planned development of Pune’s burgeoning PCMC area, transforming this once exclusively industrial zone into one of the hottest destinations for those buying property in Pune – and indeed in the country.
Over the last three decades several thousand acres of land have been acquired, developed, zoned, brought into the jurisdiction of the Pimpri Chinchwad Municipal Corporation (PCMC) and PCNTDA and made available for residential and commercial purposes. The result has bee a paradigm shift in how the real estate market sees properties for sale in Pune. It can safely be stated that, in terms of the Pune property market, the Pimpri Chinchwad map will never look the same again.
Under the leadership of capable and committed IAS officers, the development of this fertile Pune real estate Mecca spans the entire gamut of activities. These include multi–lanes roads (including the Spine Road), strategically located fly-overs, public parks and urban forestation, residential zones including MIG and LIG Housing on a public private partnership basis, ample potable water supply and a comprehensive drainage network.
Simultaneously, other service sectors have also grown rapidly, particularly schools and colleges. There are now over 25 colleges in Pimpri Chinchwad, offering graduate and post-graduate education in virtually every discipline – healthcare, retail, entertainment, banking and financial services and public transport.
The International Convention Center
These developments have attracted some of the world’s largest companies from the automobile, IT and engineering sectors. It will also become the home of one of India’s largest International Convention Centers (on a 200-acre plot at Moshi, just off the Pune-Nashik Highway.) The governing authorities’ vision for the ICC includes the intention of holding the international auto exhibition that will take place in India in 2012 there. Accordingly, a hall admeasuring 100,000 square feet is being developed – this hall will equal (if not rival) similar exhibition hubs in Munich, Shanghai and other major metros around the world.
Cutting-edge residential complexes
Leading builder-developers from the Pune property market have been quick to spot the opportunity to create ultra-modern residential complexes in this region. These complexes are being designed and executed to meet the lifestyle expectations of the cultured and cosmopolitan middle class. Another market driver is the fact that Pimpri Chinchwad now offers diverse career and business opportunities.
Woodsville, the latest project by Pharande Spaces, is a prime example of the integrated town concept increasingly coming into vogue. Situated just diagonally across the ICC, Woodsville offers a wide choice of spacious two and three bedroom apartments and an array of amenities: shopping mall, multiplex, club and sports complex, school, hospital, hotel and wedding reception hall. Profuse tree plantation, play parks and podium lawns create a serene, healthy environment.
Avinash Gokhale is Director – Marketing & Corporate Planning, Pharande Spaces – a leading construction and development firm operating in the PCMC area of Pune, India.