Infrastructure: The Key Real Estate Investment Criterion

– Anil Pharande, CMD – Pharande Spaces

We keep hearing the term ‘market drivers’ being used in real estate. What are they? Market drivers can be defined as developments in an area that increase the value of living there. It is a well-established fact that infrastructure is by far the most important driver for real estate demand and property appreciation growth.

Infrastructure can take many forms. It includes road development to boost connectivity of a location, civic infrastructure such as dedicated water and electricity supply, public gardens, etc. that increases the quality of living in the area, and social infrastructure such as schools, colleges and healthcare, which result in shorter travelling time to such very essential services.

Pharande Vaarivana Pune

Infrastructure must be put in place either before or along with other real estate development. Attempts to put it in place retrospectively create the kind of mess that we can see in many of our cities today. The building of flyovers and road widening are attempted in highly congested areas, disrupting the flow of normal activity and taking ages to be built, causing great inconvenience and massive costs to the city because of the incessant delays.

Building infrastructure is like growing trees – in both cases, there needs to be enough space for them to grow, and sufficient opportunity for a root network to deploy. Without space and depth, neither trees nor infrastructure can grow and flourish. If we take the case of Pune as an example, we can see that building infrastructure as an afterthought to real estate development, rather than as a precursor, does not really work well.

Pune’s haphazard development in the past has not been favourable for decent infrastructure deployment to complement its rapid development on other fronts. Battling severe constraints, Pune’ development authorities are doing their best to counter the ill-effects of unregulated development which has so far been taking place.

Pharande Vaarivana Pune

We are seeing some good results in building support infrastructure, but the Pune Municipal Corporation is actually a losing battle. This is amply illustrated by the fact that the Pune Municipal Corporation is not able to provide suitable parking, traffic management solutions and utilities supply despite enormous investments.

Guidelines For Homebuyers & Investors

  • The infrastructure of a location is a major focus area for property investors for a very good reason. Real estate investors want to attract end-users, either as rental or purchase clients, to the properties. They know that an area without sufficient infrastructure will be unattractive to their clients, because the quality of living quotient is low.
  • Again, properties in areas without good infrastructure tend to have cheaper property rates for a reason. Developers with projects in such locations know that the area has little or nothing to say for itself in terms of quality of life. The only way they can hope to sell their projects is to offer very attractive rates.
  • Buyers should place infrastructure availability prominently on their checklist while scouting for suitable homes. Road and rail connectivity, water supply, proximity of schools, hospitals and shopping outlets are of paramount importance. Buying a home cheaply if the location does not offer these is meaningless, and will give cause for regret.
  • If one is buying a property purely as a long-term investment and primarily for capital appreciation, one can afford to be a bit philosophical about existing infrastructure. After all, one is not planning to live there and does not expect very fast appreciation. As long as there is a reasonable assurance that it will arrive in the foreseeable future, it makes sense to invest in a property located in an emerging area where infrastructure is in its nascent stages.
  • However, if one is buying the property in order to generate rental income, existing infrastructure is far more important than upcoming infrastructure. People looking for rental options are also looking for a certain ease and dignity of living. They are willing to put the option of buying a home aside so that they can live in a good home in a good location on rent.
  • Where the option exists, give a high preference to townships over all other options. While checking out townships, ensure that they are located in areas which have a good saturation of support infrastructure as well. Most large Indian cities now have township projects coming up.
  • In Pune, the infrastructure-rich Pimpri-Chinchwad Municipal Corporation is attracting the highest number of buyers and investors of township properties. In other parts of the country, Navi Mumbai and the Kalyan-Dombivli and Vasai-Virar belts are becoming important township hubs.
  • In Delhi NCR, the areas to look at for townships are Ghaziabad, Faridabad and Greater Noida. In Bangalore, the growth hubs for townships are Yelahanka and Devanhalli, and in Chennai they include Sriperumbadur, Perambur, the OMR belt and Anna Nagar.

About The Author:

Pharande Vaarivana PuneAnil Pharande is Chairman of Pharande Spaces, a leading construction and development firm that develops township properties in Western Pune. Pharande Promoters & Builders, the flagship company of Pharande Spaces and an ISO 9001-2000 certified company, is a pioneer in the PCMC area offering a diverse range of real estate products catering especially to the 42 sectors of Pradhikaran. The luxury township Puneville at Punavale in West Pune is among the company’s latest premium offerings. Woodsville in Moshi is another highly successful PCMC-based township by Pharande Spaces which is now in its 3rd phase.

PCMC In 25 Years – A Fast Forward Into The Future

Anil-Pharande
 
 
Anil Pharande on his vision and his expectations of the PCMC of the future
The Pimpri Chinchwad Municipal Corporation follows a real estate model that has proven to be the most progressive and sustainable all over the world. The essence of this model is ‘planned development’ or ‘controlled urbanization’. PCMC is a twin city to Pune, but in that respect is uniquely different. Pune’s real estate development has not followed any sort of plan, and it is not hard to see it as a smaller version of chaotic Mumbai in less than 25 years.
A HOMOGENEOUS, MULTI-FACETED MOSAIC
In the same time span, PCMC will have attained its fullest potential as a model city of the future. Obviously, it will look very different from what we see today. It will have grown exponentially, into a harmonized montage of large industrial units, IT Parks, hotels, shopping and entertainment plazas, educational institutes and healthcare facilities – towering above public parks and gardens and crisscrossed with multi-lane roads and flyovers.
Further, the additional 25,000 acres of land that have come within the PCMC jurisdiction by virtue of the last Development Plan will eventually result in the addition of at least 2 million new homes. These homes will cater to every social stratum of property buyers, from the lower to the high income segments.
HORIZONTAL AND VERTICAL EXPANSION – CREATING A SPECTACULAR SKYLINE
In other words, there will be tremendous – yet controlled – horizontal real estate growth over the next 25 years. Most spaces allocated for residential use will have been utilized for that purpose. But this will not result in an urban jungle, since the PCMC planning blueprint will enforce the maintenance of vast green spaces at all stages of development.
Moreover, the Pimpri Chinchwad Municipal Corporation will at all times endorse self-sufficient real estate developments such as townships and other integrated residential projects. The authorities have long since recognized that these are the most sustainable and progressive models for optimum real estate growth. These projects will ensure a scientific uniformity to the horizontal growth.
However, even these 25,000 acres will not suffice, since PCMC will have to accommodate a massive demand for housing. The following graph illustrates this point – it charts the population growth in PCMC over the last 25 years, and clearly depicts that this growth has been almost ten-fold (from 200,000 to 2 million).
graphAs the graph below indicates, there is reason to believe that population growth is likely to cross 50 lakhs (5 million)  by 2035
This growth will be fuelled by several factors. On the one hand, there will be a huge requirement for homes from the rapidly growing manufacturing sectors of Pimpri-Chinchwad and the Chakan-Talegaon belt. Chakan itself, though a burgeoning industrial hub, has little to offer by ways of residential facilities. The onus naturally falls on PCMC, which will necessarily be the residential location of choice for the entrepreneurs and employees of these units.
Simultaneously, there will be the spill-over effect from Pune City (which will have reached complete saturation point in the next 25 years). We further have to factor in the ever-increasing migrant population from all over the country, attracted as much by the excellent education institutions as by the varied career opportunities.
The obvious solution lies in growing vertically as well as horizontally. More land will have to come within the purview of planned development, and building heights will need to increase from the currently permitted 70 metres – approximately 22 floors plus parking – to 100 metres or more. FSI, which still currently stagnates at 1, will need to be raised to at least 2, or even 2.5.
In 25 years, PCMC will be a skyscraper city on the lines of Gurgaon.
WORLD-CLASS INFRASTRUCTURE
In most cities, such growth would mean serious infrastructure challenges. We have already seen what happens in a city like Mumbai, where skyscrapers are being built without sufficient parking, connectivity and municipal amenities to support them. However, thanks to the master plan that PCMC will always adhere to, the necessary infrastructure will precede the building of high-rises. I firmly believe that 25 years from now, the Pimpri Chinchwad Municipal Corporation will serve as a national and even international benchmark for planned, scientific vertical real estate growth.
An essential pre-requisite to support this massive growth is an advanced public transport system. With an eye on this future requirement, PCMC has adopted a model similar to Ahmedabad’s Janmarg – a scientifically designed BRT-based  public transport system spanning 130 km across 14 routes in PCMC. This system involves 4-lane wide, exclusive roads with grade separators that will reduce the dependence on private transport in favour of more efficient public transport. This, in turn, will result in smooth traffic flow, less road blocks, radically lower pollution levels and a healthier, energy-conserving environment. To ensure that there are no hitches in the development of this lifeline, the PCMC has established an Urban Transport Fund for its funding.
Another pre-requisite for efficient transport is more connecting roadways. A ring road is on the drawing boards, but that will become truly effective only with the implementation of a hub-and-spoke road network. To illustrate this point, there are currently only two arterial roads connecting Pune with Pimpri-Chinchwad, and only two connecting Pimpri-Chinchwad with Chakan. These cannot sustain the enormous increase in vehicular traffic that industrial and residential growth will generate.
Again, it is my opinion that this alone may not suffice to cater to the public transport needs that will emerge over the next two decades. I personally feel that an elevated skybus or monorail network or even an underground rail network will be called for.
THE ULTIMATE GAMECHANGERS
I cannot end these musings without mentioning the new international airport being planned near Rajgurunagar and the International Convention Centre at Moshi, which will cover a sprawling 200 acres. The Convention Centre alone will spawn a huge tourism, hospitality and retail boom which will convert PCMC into a major urban destination both within and outside Maharashtra, perhaps second only to Mumbai. Global hotel chains will have redefined the hospitality sector, and the shopping centres will be populated by marquee retail brands.
In fact, the next two decades are surely going to see PCMC being catapulted into the international Big League, giving it a distinct global identity in its own right.
Anil Pharande is President, CREDAI – PCMC and Chairman, Pharande Spaces, one of the most innovative developers in Pimpri-Chinchwad

Pune’s Cashless Bus Travel Project Nears Launch

(Indian Express, Nov 09 2010)
Pune is set to be the first city in the country to experiment with a common mobility card to enable commuters to travel cashless in city buses. The Pune Mahanagar Parivahan Mahamandal Limited (PMPML) is making arrangements for an early launch, but whether the date will be November 14 as announced earlier, will be decided on Wednesday.
The PMPML, in association with the Unit Trust of India (UTI) Bank, is rolling out the plan and a UTI team had recently visited Pune to see how things could be worked out.
As reported in September, the PMPML had made it public that it will introduce the common mobility card in Pune and Pimpri-Chinchwad as part of a Central government project. The concept of single ticket for all systems of public transport has been envisaged in the National Urban Transport Policy. The funding will be shared by the Centre under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM).
“We have organised a meeting with UTI officials to finalise how the plan can be launched soon. However, details will be disclosed after the meeting on Wednesday,” PMPML Chairman and Managing Director Dilip Band said.
Under the plan, a commuter would be able to travel on trains and buses using a single card and without buying any ticket once transport operators modernise their fleet to make smart card usage possible. The card is used in many developed countries. The Union government had selected Pune for a pilot run in buses.
Another senior PMPML official said, “The UTI team recently paid a visit to see how things could be worked out for the common mobility card. They collected necessary information. We have started preparations to keep necessary infrastructure in place. Hopefully, very soon, the terms and conditions will be finalised and signed.”
As per the preliminary plan, each card will cost Rs 40 and will be sold at authorised outlets. Card-readers installed in buses will calculate the fare from the boarding to disembarking points. Money will automatically be deducted on swiping the card. Cards will be available at around 50 centres in Pune and Pimpri-Chinchwad.

Reducing Construction Premium Along BRTS – PCMC

PUNE: Following the controversy over the Pimpri-Chinchwad Municipal Corporation (PCMC) general body’s decision to reduce premium for constructions along the Bus Rapid Transit System (BRTS) corridors in Pimpri-Chinchwad, municipal commissioner Ashish Sharma said on Monday that the civic administration will give its opinion to the state government which would be in the “best interests” of the municipal body.
Sharma said, “The PCMC had approved a proposal for densification of corridors along the BRTS route. It had also received the state government’s approval for it. This was appreciated even by the Asian Development Bank (ADB). But now, the PCMC’s motive behind the corridor densification will be diluted if the demand for reduction in the premium charges is implemented. The premium charges must be linked to a dynamic factor and not a static factor,” he said.
Sharma said suggestions and objections will be invited from citizens regarding the revised proposal approved at the general body to reduce premium charges. The proposal will then be sent to state government for approval. “Citizens can give their suggestions and objections when the PCMC invites them,” he said.
At the general body meeting held on August 20, a proposal was approved to cancel the levy of premium charges as approved by the state government, and instead charge premium as per ready reckoner rates.
Shiv Sena corporator Seema Savale has alleged that the suggestion was not properly read so there was confusion among the corporators.
Savale in her letter pointed out that the PCMC will be developing the BRTS roads and feeder routes with a total length of 97 km.
She further said that as per the earlier premium policy approved by the state government, the PCMC will get premium charges of around Rs 5,000 crore.
However, if the proposal to reduce the premium charges is implemented, the PCMC will get only Rs 1,250 crore, suffering a loss of Rs 3,750, she said.
Meanwhile, Savale has demanded that the powers of the city engineer, and deputy city engineer to give building permission, development permission, building commencement certificates, should be granted to senior officials of the town planning department. Savale said the government has issued directives in this regard.
When asked for his comments, Sharma said there is no need to withdraw the powers granted to the city engineer. “We have checked with the Pune Municipal Corporation, where these permissions are given by city engineer and deputy city engineer and not by the town planning department,” he added.

372 New Rickshaw Stands In Pune

PUNE: The traffic department has given a green signal to 372 new autorickshaw stands in the city, Manoj Patil, deputy commissioner of police (Traffic) announced.
According to Patil, the traffic department has planned a special drive against drivers plying rickshaws without meters. This drive will be carried out in Pune and Pimpri-Chinchwad during the next seven days.
“Many rickshaw drivers do not use meters. and charge exorbitant fare. So action has been planned against them,” he said.

Pune Real Estate – BRTS: Civic Body To Intensify Land Acquisition Drive

Under criticism for the slow pace of development work under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), the Pune Municipal Corporation has chalked out a four-month plan to launch an extensive land acquisition drive for road widening to set up the Bus Rapid Transit System (BRTS).
“The civic administration has been able to only complete the acquisition process of the land that was vacant. The development work on the acquired land is almost complete and now steps are being taken to acquire the land that has structures on it,” said Sudhakar Telang, PMC land acquisition and estate officer.
He said land will be acquired on Nagar Road, Alandi Road, Sinhagad Road and Karve Road in the next four months. Telang said that since the property owners or occupants have not cooperated with the civic administration on land acquisition, the special drive will be aimed at using the powers with the civic body for forceful acquisition of land for implementing developmental projects.
“The action will be taken with the help of staff of anti-encroachment department and city police,” he said, adding, the civic body has already served notices to property owners. The action will lead to demolition of structures on roads that are to be developed for BRTS. Under JNNURM, the civic body is carrying out road widening work, developing dedicated bus lanes and cycle tracks among others.
Work on the 16.5 km BRTS stretch from Katraj to Hadapsar via Swargate was launched in 2006, however, it was plagued by accidents and delays. The PMC has now speeded up work on other BRTS routes.
Source

Fly From Pune City To Kerala Non-Stop

GoAir has announced a new flight connecting Pune and Kerala directly for the first time, thus meeting a long-pending demand of the Malayalee community in the city.
GoAir authorities in Mumbai said the Pune-Kochi flight, to be launched from October 2, will leave Pune at 4.40 pm and reach Kochi at 6.45 pm. “We are launching a number of flights on Gandhi Jayanti and the Pune-Kochi flight is one of them,” said an airline official.
Read the rest of the article here.

ADB Offers Rs 452 Crore Infrastructure Loan To PCMC

PUNE: The Asian Development Bank (ADB) has offered a loan of Rs 452 crore to the Pimpri-Chinchwad Municipal Corporation to fund several infrastructure projects in the twin towns.
The PCMC Infrastructure Company Ltd a special purpose vehicle created by the PCMC to execute these projects has told the ADB to give details of the terms and conditions for sanctioning the loan.
The PCMC plans to develop 12 bus rapid transit system (BRTS) routes which includes BRTS corridors. The PCIC will collect taxes, development charges and advertisement charges through BRTS corridors.
Municipal commissioner Ashish Sharma, a member of the PCIC board of directors, said, “The PCMC will develop 12 BRTS routes. We have completed development of two routes. The work on three routes, namely Nashik Phata- Wakad road, Kalewadi Phata Dehu Alandi road and Aundh – Ravet road is in progress. The PCMC has to develop other three routes which require funds. The department of economic affairs has approved non-sovereign lending by the ADB to the PCIC.”
Read the rest of this article here.

PCNTDA To Construct Three Flyovers

PUNE: The Pimpri Chinchwad New Township Development Authority (PCNTDA) has proposed to construct three flyovers to reduce traffic congestion on main roads in its limits.
Speaking to TOI, Suhas Divse, chief executive officer, PCNTDA, said that the three flyovers are proposed to be constructed at the Kalewadi phata junction, old Mercedes Benz junction and the Kudalwadi junction in Chikhli.
Divse said, ” PCNTDA has invited bids for the project to construct a flyover near the old Mercedes Benz junction. We are preparing the design of the flyover to be built at the Kudalwadi junction. We are still to appoint a consultant for the flyover at the Kalewadi phata junction.”
Divse also said that the authority was willing to provide land for police stations in various parts of the limits, if a proposal to this effect was given by the police.
He said, “MLA Vilas Lande has sought land for a police station in Bhosari and Wakad. I discussed the matter with Dnyaneshwar Chavan, deputy commissioner of police, Zone III. The proposals for land to develop police stations should come from the police.”
He said that the PCNTDA has acquired vast stretches of land in various parts of the Pimpri-Chinchwad township. Some of these were lying vacant and have not been developed, so the authority will construct compound walls to secure them and prevent encroachments.
A number of constructions have come up near the high tension electricity lines passing through the PCNTDA limits. We have repeatedly asked the MSEDCL to take action against such constructions and not to give them electricity connections, Divse said.
The work on widening of the spine road in Triveninagar has been stuck due to encroachments. Reacting to it, Divse said, “The stretch of the spine road where the widening work is stuck falls in the PCMC limits. The PCMC has to remove the encroachments and widen the road.”
Read the rest of this article here.

PCMC To Build Skywalks With World Bank Aid

PUNE: The World Bank (WB) has directed the Pimpri-Chinchwad Municipal Corporation (PCMC) to prepare proposals for construction of skywalks that will connect railway stations to the Bus Rapid Transit System (BRTS) routes.
The PCMC will construct three flyovers with the help of WB, namely at Nashik Phata chowk at Kasarwadi, Empire Estate in Chinchwad and Dange chowk in Thergaon. The World Bank officials visited Nashik Phata flyover site, Kalewadi on the BRTS route of Kalewadi phata – Dehu Alandi and Dange chowk in the municipal limits.
Skywalks will be about 500 to 700 meters in length and will connect the railway stations and the BRTS routes. The PCMC plans to construct a skywalk to link Pimpri railway station to Pune-Mumbai highway.”