– Anil Pharande
Widely called the lifeblood of any urban ecosystem, infrastructure is the very foundation of city functioning and plays a crucial role in shaping its future. Infrastructure services – like transportation, power, telecommunications, provision of water and sanitation, and proper disposal of waste – are all central to urban growth.
Studies also prove that countries with better infrastructure facilities – such as Singapore or Hong Kong – enjoy higher economic growth, more employment opportunities, and better living standards.
It is also true that infrastructure projects not only act as a driver for real estate development but also directly influence real estate prices. It is, in fact, one of the prime influencers for property appreciation.
Research by international property consultants Knight Frank Research shows that between 2008 and 2015, residential prices within a 10-minute walking radius of London’s ongoing Crossrail stations (approved in 2007) saw more than 57% price growth.
By comparison, the prime central London areas saw only 40% price growth in the same period. The values will go up further in 2022 when the central section of the project becomes operational.
We have seen similar trends in key markets in cities across India. According to a study by JLL India, property prices in some projects on Gurgaon’s Mehrauli-Gurgaon Road increased 80% in the 2006-2010 period – from around INR 5,000/sq. ft. in 2006 (when the Delhi metro was announced) to almost INR 9,000/sq. ft. in 2010 when a phase became operational. In the same period, other areas outside the metro’s ‘influence zone’ saw a 40-50% rise.
Closer Home – PCMC’s Infrastructure Thrust
Major areas in Pimpri-Chinchwad Municipal Corporation (PCMC) saw average price growth of more than 30% between 2014-2020 period – with ample scope for further growth. In comparison, some areas in the adjoining Pune Municipal Corporation (PMC) saw single-digit appreciation in this period. Besides other factors, the proposed metro station at PCMC (whose construction began in 2016) was the key driver.
The metro line from PCMC to Dapodi is slated to be operational by mid-2021. The appreciation would have been better if not for the all-round slowdown in real estate due to the reformatory changes in this period, and the temporary setback of the coronavirus pandemic. According to realty portal Housing.com, Pimpri saw property prices go up by nearly 20% in 2016 alone – the same period when the metro construction began.
While the metro, once fully operational, will be a major game-changer for the entire PCMC real estate market, the approved 128-km Pune Ring Road – which will pass through PCMC as well – will add the remaining strokes to this infrastructure masterpiece.
Infrastructure First – All Else Follows
Today, PCMC’s ultimate sales proposition (USP) is the availability of truly global standard infrastructure in the region. In sharp contrast to even the central areas of neighbouring Pune, PCMC has excellent connectivity to all other locations that drive its economic dynamo. Anyone travelling by road from Pune to PCMC is immediately struck by the wide, well-maintained multi-lane roads, strategically placed flyovers, multiple public parks with vast flora and fauna, well-defined residential and commercial property zones, and comprehensive drainage network.
From the outset, the city planning authorities of Pimpri-Chinchwad Municipal Corporation based their blueprint on sustainable visionary planning. Only in this modern city will one find infrastructure being developed even before other real estate projects are added.
Most other Indian cities have seen confused, unplanned development over the years. If we consider Bengaluru, Mumbai and Pune, it is clear that these cities exploded in size and population while infrastructure facilities failed to keep pace. The predictable outcome of such unplanned development is always chaos, pollution, and money and public health wasted in chronic traffic snarls.
The Dangers of Losing Focus
With its world-class infrastructure providing the perfect backdrop to its thriving industrial, corporate, and services sectors, PCMC’s real estate market has been an investment magnet. In the future also, industrial development and growth of the IT sector in and around PCMC will create more demand for residential, commercial, retail, and hospitality real estate.
At this juncture, it is important to remember that it is only stringent urban planning that has made all this possible. We have already seen in Pune and other big cities what happens when real estate stakeholders forget this and attempt to kill the goose that lays golden eggs. Real estate development without any motive but profitability spells doom for any city.
Recent action taken against illegal construction in PCMC proves that some developers have forgotten the city’s primary success formula. As a city grows, the temptation to exploit it also grows. The Confederation of Real Estate Developers Associations of India (CREDAI) is the foremost self-governance body for Indian real estate developers, and CREDAI-Pune Metro has done an august job so far. However, the greatest challenges are yet to come.
CREDAI is not only responsible to real estate customers and its members – it is also the custodian for the city’s future development blueprint. It is not only the city planning authorities who are responsible for developing and enforcing this blueprint. The future of the Pimpri-Chinchwad Municipal Corporation is also in the hands of every real estate developer.
This is a massive responsibility for developers because they are literally creating the city. Every builder in the region must understand and uphold the mission statement on which PCMC is built. There cannot be opportunistic development, which is nothing but development that does not pay heed to prescribed norms and rules.
We must always defend the values and ordinances which have led to PCMC’s success so far, or else the carefully created systems of the city will fail. PCMC has earned the right to call itself India’s City of the Future, but every developer equally shares the responsibility of ensuring that its future remains bright and vibrant.
About the author:
Anil Pharande is CMD of Pharande Spaces, a leading real estate construction and development firm famous for its township properties in West Pune. Pharande Promoters & Builders, the flagship company of Pharande Spaces and an ISO 9001-2000 certified company, is a pioneer of townships in West Pune. Anil Pharande is also President – CREDAI (Pune Metro) and a MahaRERA conciliation forum member