Road Development: The Key To Pune’s Real Estate Growth

Pune Property
There are often comparisons made between the infrastructure of Mumbai and Pune. The popular consensus seems to be that both cities are equally challenged as far as supportive infrastructure is concerned.
This is inappropriate for two reasons – one, Mumbai’s growth pattern has been very different from Pune’s. The city has evolved into the country’s financial capital, and the pressures on it are enormous and overwhelming, considering the fact that a significant part of it is an island that cannot grow horizontally to accommodate the growing real estate demands.
Pune, on the other hand, has an advantage by virtue of the fact that it has been able to add to its borders by means of surrounding villages. This has served to decreased pressure on the central city and encourage an outward growth pattern.
The challenges on Pune’s infrastructure – particularly its road network – have more to do with the speed of this growth. While there are various proposals for roads and road widening, these have to be translated into real time to be effective.
The pockets of infrastructural under-development are the result of both developers and the Government concentrating on existing growth areas and sidelining those with high future potential. It is a known fact that no area can grow in terms of residential, commercial and retail real estate unless the necessary infrastructure is first put in place.
This is quite a common phenomenon that is the result of the principle of fastest returns almost instinctually followed by both developers and the Government. Bangalore, for instance, was initially not well planned for radial expansion.
The approach in this city was simple – where Information Technology projects went, residential projects followed. IT and ITeS, as business lines, are not dependent on a city’s CBD areas and can workably exist in areas where property prices are low.
Once such a project is firmly in place, residential, commercial and retail establishments follow. Since this kind of growth in no way follows a master plan, the result is haphazard pockets of growth. This naturally leads to the neglect of areas that have not been so favoured. The syndrome is also evident in the case of other industries such as manufacturing.

For The Lack Of A Road….

To identity another factor that has compromised Pune’s holistic growth in terms of real estate viability – the first masterplan for the city designated a much more progressive ‘roadmap’ for the city’s road network, while the second one is decidedly sotto voce on these. Also, key roads leading to new growth areas are not being put in place with the speed necessary to ensure that these new areas have the requisite connectivity.
The roads leading to Kharadi – a major real estate growth nexus – have not been put in place due to an inappropriately slow speed of development initiative. Similarly, the Eastern bypass has been at the proposal stage for many years. In these and various other instances, the result is compromised potential.

Case Study – Pradhikaran Phase 2, PCMC

In comparison, the Pimpri Chinchwad Municipal Corporation (PCMC) has been proactive in terms of a proper road network. This explains why there have been such spurts in growth and corresponding real estate values in this region. Considering how much the authorities have already achieved, it is distressing that certain pockets in the region still show signs of infrastructure deficit.
A case in point would be Phase 2 of the Pradhikaran area, which comes under the purview of the Pimpri Chinchwad New Town Development Authority (PCNTDA).
The Pharande Group, which has made significant land bank investments in Phase 2, across Sectors 4 and 6, had already launched residential projects in Pradhikaran’s Phase 1. Under the aegis of Anil Pharande, a massive mixed-use development is now shaping up in Phase 2.
This area is extremely important for overall growth of the region, since it will cater to a huge chunk of the middle income housing demand for PCMC-employed mid-management cadre. However, because of the lack of proper roads, only the Pharande Group and a handful of smaller developers have taken the risk of venturing into this area to open it up for future growth.

The Origin Of Mismatch

The Pimpri Chinchwad Municipal Corporation (PCMC) area was established as a satellite town to Pune in 1962, and it quickly grew as an industrial market. Since the travel time between Pune and PCMC presented a challenge, the authorities soon perceived an increasing need to provide housing for people who worked in this area. This led to the formation of the Pimpri Chinchwad New Town Development Authority, which began to develop housing for the PCMC workforces.
The constraints of octroi and sales tax caused most industries to start moving out of the corporation limits. This caused a boost in the growth of the outlying areas. Development is now gradually shifting away from the core areas of PCMC, and the areas between Bhosari and Chakan.
Generally, the road network in PCNTDA area is quite suitable. Currently, a 45 meter spine road that would connect Nashik highway to Mumbai Highway (at Nigdi) is being developed. However, the lack of direct road connectivity from this part to Chakan presents a lacuna that reflects on this location’s overall growth potential.

‘Poor Cousin’ Syndrome?

Chakan has already found favour by large-scale industries and Bhosari was already an established industrial area, since it had grown in tandem with other industrial areas in the PCMC. The quick progress of these two areas has attracted the bulk of road construction efforts, and away from the area known as Phase 2.
Paradoxically, Phase 2 offers the advantages of generous land availability and low real estate costs. It also has an enormous future market driver in the form of the International Convention Centre at Moshi, which is being jointly developed by the Maratha Chamber of Commerce and the PCMC.
This project is currently only in the proposal stage, but it will add immense value to this sector. When the ICC becomes operational, it will positively affect real estate value in the northern parts of the PCMC area, right up to Chakan.
Developers already active in this area have put the blueprint for its progress in place. However, the blueprint needs to be transferred from the drawing board to the shop floor.
A suitable road network connecting Phase 2 to Chakan and Bhosari could vastly improve its chances of catching up with these growth sectors – and of fulfilling its intended purpose as a new residential safety-valve for the increasing housing demand from the PCMC area.

Lacking – A ‘Potential Value’ Perspective

The potential of this key area apparently lacks from a recognition of its inherent future value. A closer look at its promise for the PCMC real estate market would very likely cause a more fast-paced development of its road network.
There are earlier precedents in Pune, wherein languishing areas were given fast-paced infrastructure upgrades because of an upcoming market catalyst. When the recent Youth Commonwealth Games loomed closer, the enhancement of Baner Road and Pashan Road were put on the fast track.
In the same manner, it is not unreasonable to anticipate that the PCNDTA will take cognizance of the fact that Pradhikaran’s Phase 2 is extremely important by virtue of the fact that strategically juxtaposed New Rajguru Nagar has now been identified as the location of Pune’s new airport.
This being the case, putting down adequate roads in this area will set the stage for immense future growth of this strategically placed locality.

Author: Mohammed Aslam is Head – Pune, Jones Lang LaSalle India.
This article may be reprinted with due credit to the author and a link back to PunePropertyBlog.com

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