Indian Millennial Homebuyers: The Times Are Changing

Pharande Vaarivana

Anil Pharande, Chairman – Pharande Spaces

Everything that your parents may have communicated to you about owning a home may be incorrect if you are a millennial under the age of 35. However, don’t blame yourself for this – your parents operated by a rigid set of values that they have simply passed on to you. It was a simple enough formula – get a good education, get married, have kids and buy a big flat in the city. This is – or was – the quintessential Indian middle-class dream.

This dream – and the formula – may continue to have relevance to quite a few younger people in India, but the way life works for today’s millennials in India is no longer so cut and dried as it was for their parents. In the first place, we have a rapidly evolving and increasingly competitive job market in India.

The career charts of Indian millennials are no longer as predictable as those of their parents were – nor does a sound college education mean that one can actually get the best jobs anymore. Also, millennials are the ‘job hopping’ generation which wants to sample different lines of work and also different companies with varied work cultures before they ‘settle down.’ This is one reason why many Indian millennials initially prefer to rent rather than buy their homes.

Secondly, because their careers are no longer cast in the concrete of limited options like engineer, doctor, lawyer, banker or ‘Government job, young Indians today are marrying later and are not necessarily in a hurry to have children once they do, either. When they do decide on having children, having one child is, more often than not, enough. The typical millennial family of today is essentially nuclear and does not subscribe to the values that drove the much larger and much more complex joint family package.

Pharande Vaarivana

They are more flexible and value their freedom, so they are not overly invested in making heavy financial commitments as soon as they are able to (making such commitments was a defining factor of the previous generations of Indians).

What does this mean in terms of their home purchase decisions? For one thing, it means that a smaller flat – even for a dual-income household – is perfectly adequate to begin with. What increasingly matters for the young, smart socially conscious Indian nuclear family of today is not necessarily size, but:

  • Value for money (banks and developers should understand by now that dual income does not equal dual gullibility)
  • Being able to get to and from work conveniently (not because getting to work fast matters most, but because getting home faster leads to better work-life balance)
  • Good public transport connectivity (because using public transport is good for the family budget as well as the environment)
  • Two car parking spaces (because two earning members may need to be as mobile as possible)
  • Fast broadband + Wi-Fi connectivity and other smart home features (because many Indian millennials can and do work from home, or from home as well as an office)
  • Environmental sustainability of the project (because most Indian millennials do believe that the world can become a better place)

Upgrading to larger homes should be an option, but it is by no means the only acceptable path for the Indian millennial to follow. For the previous generations, the ‘upgradation’ route was more or less socially enforced – but that trend is now history.

Strangely, many residential developers in cities like Pune have not caught on to the reasons why their projects are not selling as fast as they used to. They choose to believe that it is because ‘market conditions’ are currently ‘slow’. That may be true, but the larger fact is that housing projects that appealed to their parents may not have the same attractiveness for today’s millennials.

Projects that do not meet the requirements of today’s younger generation of working professionals are not going to work for this buyer segment, regardless of the market conditions.

One truth about the real estate market has not changed, even for millennials – while it is not all about ‘location, location, location’ for them, location is still certainly very important. It’s just that ‘central location’ is no longer the Golden Rule – Indian millennials are far more inclined to purchase their first homes in the suburbs, not in the city centre.

They are also far more likely to buy homes in organized townships with stand-alone infrastructure and their own schools, healthcare and shopping / entertainment facilities. Townships with their own office complexes offering potential walk-to-work or cycle-to-work possibilities and those close to major employment hubs such as IT parks and manufacturing belts are the most preferred.

About The Author:

Pharande Vaarivana

Anil Pharande is Chairman of Pharande Spaces, a leading construction and development firm that develops township properties in West 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.

GST Implications On Real Estate

– Anil Pharande, Chairman – Pharande Spaces

The Goods and Services Tax (GST), is a kind of a comprehensive indirect tax on sale, manufacture and consumption of different kinds of goods and services throughout India, with all other Central and State taxes intended to be subsumed under it. If this happens, it has far-reaching implications, including on real estate.

Taxation and real estate industry

If we take a look at the real estate industry in India today, we find that there have been major tax changes in the last few years. However, these taxes are not uniform all over the country – different practices and regulations are followed in different states in India. It was the 46th Amendment to the Constitution that brought massive changes towards taxation in the real estate sector. Later in the following years, special powers were given to the State Government for implementing Value-Added Tax (VAT) on some specific kinds of transactions.

Pharande Vaarivana Pune

For land, property and other kinds of work contracts, different kinds of taxes are levied by the State Government and the Central Government. The transactions are mainly categorized in three parts – value of services, value of goods and materials and value of land. VAT is applied by the State Government on the goods portion, while value of services is taxed by the Central Government. However, other than stamp duty, there is no clear tax on the transactions regarding value of land. This situation leads to confusion and can result in dual taxation. Compliance and implementation of such taxes also get difficult.

The real estate industry has justifiably been feeling jittery with such confusing tax implantations and calculations. For one real estate transaction, multiple taxes need to be paid and this has a negative effect on the industry. The industry’s demand to bring GST on board is primarily to get a clear and transparent taxation rule for the real estate sector in India.

Expected GST effects on the real estate industry in India

The implementation of GST can prove to be a significant step in reforming indirect taxation in India. Chances of double taxation would be diminished, as some of the Central and State Government taxes will be amalgamated into one tax. This will ease the process of taxation considerably, making its enforcement and administration easier and simpler.

Talking about the real estate industry in this context, there are many things which have to be known and understood. In the current situation, a builder or a real estate developer incurs various kinds of expenses during the construction phase of a project. Different kinds of taxes are involved with these expenses, such as VAT/CST, customs duties, service tax, excise duty and so on. Majority of these taxes are expenses that are included in the system. This is because they are not creditable to the developer or to the end-customer. These non-creditable expenses lead to tax inefficiency, which is not desirable.

One positive impact that might result from GST is doing away of restrictions on credit utilization. This will definitely help in strengthening the credit chain in the entire system. If property developers and builders can properly manage this aspect, they will see some profit.

It is expected that the proposed GST structure will have a progressive and streamlined approach. The tax compliance rules should not have any serious impact on real estate builders and developers. In present conditions, builders running projects in different states have to comply with State-specific VAT laws, as well as other kinds of service taxes. Bringing in GST will therefore not bring any additional compliance burden on real estate builders in the country.

Issues regarding GST which affect real estate builders

There are a few clarifications that might be sought for GST taxation by real estate developers. For instance, the definition of a real estate developer varies from one state to another in India. The composition scheme varies according to State, in which the VAT rates come between 1-5%. In some States, there are differences between the terms real estate contractors and real estate developers. It has to be understood what will the GST implications are if the terms have different meanings.

There might be some confusion regarding GST implementations on residential property, as well. In the present scenario, there is no service tax applicable on renting immovable property, particularly for residential purposes. But service tax and VAT is implemented on the construction work. The question that arises is if the proposed GST will offer differential tax for residential properties.

As of now, it does not look like completed residential projects will be affected by GST, as buyers into completed projects have already paid statutory charges such as stamp duty and registration charges on the transaction. The segments to watch on the GST front are under-construction flats and rental flats, which are expected to come under the ambit of GST. GST will apply to the materials that a developer procures for building a residential project, so there is a direct correlation to the overall cost of construction.

Much depends on what rate of GST will finally be confirmed. If it is more than the existing cumulative taxes currently in force, it means that the overall cost to consumers of buying an under-construction flat will increase along with the added cost of stamp duty and registration. At the same time, developers have to keep an eye on costing, as price competitiveness is very important in the current real estate market scenario.

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.

How Infrastructure Drives Real Estate Demand

– Anil Pharande, Chairman – Pharande Spaces

All property investors are familiar with the phrase ‘market drivers’, which has become one of the most utilized terms in real estate investment. What exactly are market drivers? They can be explained as advancements within a region which boost the overall worth of the location, and the desirability associated with residing there. It is a well-established fact that the infrastructure of an area is a key criterion for home buyers, and therefore property investors.

Infrastructure has numerous types. For instance, roads are considered key infrastructure, as they enhance the connectivity of the area. There is also civic infrastructure, which involves the availability of public services in the region. In India, the primary aspects covered under civic infrastructure are reliable water and electricity supply, without which an area falls flat as a residential location and therefore as a real estate investment destination.

Pharande Vaarivana Pune

Then there is the factor of social infrastructure, which accounts for the liveability of the area. At the most basic level, civic infrastructure will include public transport and shopping outlets, but educational institutions and hospitals are also important. People expect to have colleges, schools and healthcare facilities close to where they live. Therefore, the level of saturation of social infrastructure will play a big role in the overall value of the location as a residential and investment destination.

The global standard for urbanization which is evident in most developed countries is that all or most of infrastructure required to make an area livable and desirable as a real estate destination are set up prior to or opening it up for large-scale real estate development. This is because efforts to put the necessary infrastructure in place retrospectively results in inconvenience to the existing population because of decreased public mobility during construction of such projects.

Retrospective construction of infrastructure projects also pollutes the environment during the actual construction process, and this is nothing but bad news in an area which is already inhabited.

Creating the infrastructure which is required to make a location liveable and also supportive to various economic functions can be compared to creating vast green cover in an area . In both instances, there is a primary requirement of adequate space. Another vital factor for successful infrastructure creation is time. In the case of trees, the root systems must be given adequate time to penetrate deep enough to provide anchorage as well as access to deep-lying groundwater. Similarly, infrastructure must be given enough time to be deployed, become functional and start servicing the area properly. Without space and time, both forestation and infrastructure creation become futile exercises.

Pharande Vaarivana Pune

If we take the cases of Pune and the adjoining Pimpri-Chinchwad Municipal Corporation (PCMC), we see a vast difference in successful infrastructure deployment. In Pune, the PMC has been unsuccessfully trying to provide retrospective infrastructure support to its massively congested and largely dysfunctional city areas.

Almost every new infrastructure project in Pune is hotly contested by local political parties and becomes road blocked by bureaucratic red tape. One of the reasons is that these projects affect already populated areas, which represent vote banks. The result is that most of these projects take ages to be built, and many are eventually shelved altogether.

The advantage that the PCMC has enjoyed is that it follows a proactive rather than reactive approach to infrastructure creation. In other words, massive Greenfield areas are taken up by the town planning authorities for infrastructure creation, and only then  opened up for further development by private builders. This has resulted in extremely viable, plug-and-play residential neighbourhoods and commercial districts which start delivering the goods from day one.

This proactive approach to infrastructure has earned PCMC the distinction of being one of India’s most sought-after destinations to live and work in. PCMC’s superior infrastructure has attracted the highest number of multinational companies and industries to the region, and this has also led to the highest rate of employment creation in PCMC. As a result, the Pimpri-Chinchwad Municipal Corporation has emerged as the most preferred city for home buyers who are looking to live close to where they work – and simultaneously enjoy a superior quality of life.

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.

Festive Season: Tips On Freebies And Offers On Property

– Anil Pharande, Chairman – Pharande Spaces

In Maharashtra, Diwali is definitely the time of choice for property buyers to invest in their dream home. In fact, property buyers look forward to this festival to sign the papers on their homes because this city cherishes this traditional time of investing in the future.

Pharande Vaarivana PuneObviously, builders also respond to the vastly improved market sentiments and do all they can to sustain them. During the Diwali period, property buyers will be presented with a slew of offers which developers introduce to induce sales. The Diwali period this year will see a lot of such activity, because property developers are eager to create sufficient interest in their projects. The residential property market has seen slackness over the preceding months, and Diwali is the time that developers have been looking forward to as much as property buyers.

The question here is – do such ‘freebies’ constitute real value for property buyers? The answer to this does not depend solely on what is being offered. It is a normal market phenomenon for incentives to be offered during the festive season, but property buyers should consider the actual value of the property.

They should be cautious about extravagant freebies and take a close look at the factors that add or reduce value in the case of real estate. If the project is by a developer known for sub-standard construction, or if it is located in a ‘blind spot’ of the local real estate market, no amount of freebies can compensate. The property itself will not represent a good investment, and the buyer will not benefit in the long run.

Another aspect to watch out for is freebies being offered for properties in over-priced projects. At a time when property buyers seek the best options for their money, getting a free car along with an overpriced flat does not make sense. If the flats in this project do not represent good value for money, freebies will not improve the situation. If a buyer wants to buy a flat in Pune such a project, it is best to negotiate for a better price than to accept freebies – or ask for them in addition to a discount.

Home buyers should especially beware of freebies being offered by investors who have put their money into properties in locations that are known to be ‘overheated’ (in other words, where rates have been artificially inflated by excessive investor activity). In such cases, freebies are meant to act as psychological encouragements to make an unwise property purchase.

There are certain incentives that buyers can definitely take seriously. These are not in the form of cars or vacations, but represent actual savings to them. Such incentives include:

  • Reduced down-payments to book flats, with balance payable on possession, resulting in an extension of the period between booking and full payment. Normally, buyers would have to pay the balance as the building progresses
  • Waiver on stamp duty, VAT and registration charges
  • Free or significantly reduced clubhouse memberships
  • Free parking, furnishing, interior decoration and smart home features (which would otherwise be charged for)
  • Waiver on premium for floor-rise

About The Author:

Anil 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.

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.

What Is The Ideal Time To Hold And Sell Investment Property?

Pharande Vaarivana Pune

– Anil Pharande, CMD – Pharande Spaces
The Indian real estate market is among the most lucrative for making investments. Barring grave global crises such as the most recent one, this market will not go downhill and provide very decent returns to investors.
Before the global financial crisis (GFC) or recession that hit the world in 2008, real estate investors made great profits on properties which they had held for just few months. During the recession itself, property markets plummeted and there were no takers for real estate.
However, this was an unnatural situation – as the situation improved and things came back to normal, real estate market across the world became calmer.  In a normal market scenario, property rates rise at a steady pace and uneven or abrupt rises or declines do not happen.
Types of investors
There are two types of investors into properties – those who look at making a regular rental income and have no plans of exiting the same, and those who look for capital gains. For the latter type, earning good returns requires them to time the sale of the property well. Only when the property has seen decent price appreciation does it make sense to put it on the resale market. The question is – what is the right time to sell?
Pharande Vaarivana Pune
Ideal time span to remain invested
This subject is incessantly debated, and there are various opinions on it. However, it is generally agreed that in normal market conditions, the real estate market should be looked at as a long-term investment bet. What this means in real terms is that a good ‘holding period’ for properties purchased for capital appreciation is around three years, with the ideal period being 3-5 years. However, it has actually been seen that the best returns on investment on properties are actually obtained in a period between 5-7 years.
Ideal time for exiting
The perfect time to exit from a real estate investment will actually depend more on one’s expectations than on market conditions. While exiting after three years should ensure decent returns on investment, one would have to extend the horizon if the expectation is for the highest possible profit.
Investors looking for the highest capital gains from their property investments should target residential projects that are under construction, rather than completed projects. The best time to invest in such properties is during the time of launch. Thereafter, while some experts feel that the best time to exit such properties is when the project is nearing completion (or latest when the developer starts handing over possession to buyers); others advise investors to target one year after possession as the perfect exit time.
Which of these horizons make the most sense will really depend on local market conditions such as demand, supply and infrastructure development of the region. Before taking a decision to either buy or sell an investment property, a thorough understanding of the current local property market is in any case de rigueur.

About The Author:

Pharande Vaarivana Pune

Anil 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.

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

The Real Estate Magic of Integrated Residential Projects

When you are setting out to purchase the home you always dreamed of and saved for, you obviously wanted something more than just an orphaned, anonymous set of walls in some congested city center. The problem is, that’s all that most residential projects in India offer these days. There is a lot more to the perfect home than good construction, layout and fittings – a residential property needs supporting social and physical infrastructure to become a suitable home. Moreover, the beleaguered city dweller’s heart yearns for the sight of greenery, open spaces and fresh air.
After all, we want our children to grow up in better conditions than we possibly experienced at their age…
woodsville_big
In Pune, integrated townships have been seen as the answer to these requirements. However, land constraints, zoning laws and the budgetary considerations that govern property buyers in many areas often do not make the integrated township model feasible.
A more practical and feasible alternative is Integrated Residential Projects. Like integrated townships, this more compact and serviceable model offers home buyers everything they need for a comfortable and healthy lifestyle. Children have enough room to play in, and both they and their parents are free from the stress, noise and pollution of central urban life. Such projects have schools, shopping and entertainment facilities, healthcare and easy access to public transport.
Also (very importantly) they are a boon to people who wish to live in a non-urban environment while attending to their jobs in the workplace catchments of the city. They get a dream location, excellent infrastructure and a lot more.
Residential real estate investors, on their part, can capitalize on the higher demand – and therefore the higher ROI (returns on investment) that such properties offer. The higher investment potential of homes in integrated residential projects stems from the fact that they are self-sufficient and self-sustaining. A direct outcome of this is that the resale value of such properties is as good as immune to market volatility. Because of the diversified nature of such projects, they represent a very low risk to property investors, even while they benefit from the larger upside potential despite low entry costs.
Builders who cater to the demand for integrated residential projects face quite few challenges. After all, they have to provide the advantages of integrated townships while having to forgo the considerable incentives that the Indian Government offers for the development of larger townships. Therefore, the initial capital required is extremely steep – right from land acquisition to the providing of physical and social infrastructure.
The integrated residential project concept is just beginning to emerge on the Indian real estate landscape. One of the areas where it has been successfully implemented is Pune’s sister city – the Pimpri Chinchwad Municipal Corporation. One of the primary reasons for the success of the integrated residential projects in the PCMC areas of Pradhikaran and Ravet is the fact that these are located very close to vital workplace hubs such as the MIDC and Hinjewadi, Pune’s software hub. This, coupled with the advantages of having ‘everything inside’, has contributed to the demand for homes in such projects.
Anil Pharande is President of CREDAI PCMC and Chairman of Pharande Spaces, a leading construction and development firm that develops ultra-modern integrated residential projects in the PCMC area of Pune, India.

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Finolex Industries Selling Pune Land To Raise 4 Billion Rupees

Finolex Industries Ltd., India’s biggest maker of pipes made of polyvinyl chloride, surged to its highest in almost three years after the company said it expects to raise about 4 billion rupees ($86 million) selling land.
The company revived its plan to sell 78 acres (31 hectares) of industrial land after an increase in real estate prices, said P. Subramaniam, chief financial officer, said in an interview. Finolex had in 2008 proposed selling the property, he said.
The land sale will help Finolex improve its cash flow, said Tejas Doshi, vice president of equity research at Sushil Financial Services Pvt. The company, which reported a 67 percent drop in profit in the three months through June, also plans to spend 800 million rupees to build a new factory, Subramaniam said by phone today.
The land sale will help “improve the balance sheet,” Mumbai-based Doshi said. “It will also help their expansion plans.”
Finolex will raise 500 million rupees by selling non- convertible bonds to build the plant and will fund the balance from its profit, Subramaniam said. The company hasn’t “finalized” the land sale yet, he said.
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PCMC Pipeline Contractors To Level Dug Up Roads At Own Cost

PUNE: The water supply department of the Pimpri Chinchwad Municipal Corporation (PCMC) has put a clause in tender bid documents making it mandatory for contractors to level the road after the pipelines are laid.
Earlier, the contractors would lay the pipes on roads and refill the trenches with uneven murum, resulting in inconvenience for motorists. Later, the asphalting work of these rough patches was given to new contractors for an extra price. Now, the one who lays the pipes will have to level the road with tar.
Ambadas Chavan, additional city engineer and chief of water supply department, PCMC, confirmed that such a clause has been included in the tender document.
Joint city engineer Pravin Tupe said, “Earlier too the PCMC used to get the trenches filled from the contractor. But now it is being explicitly mentioned as a mandatory condition while inviting bids for future projects. “The tender process will be completed in two months while actual work is expected to begin before the end of this year.”
The condition has been put up in the bid document for 18 projects of the water supply department, estimated to cost Rs 6.71 crore. Of these, 12 projects are to be completed in six months and five in a year. One other project has a two-year deadline.
Sulabha Ubale, group leader of Shiv Sena corporators, said, “The contractors dig up roads and other open areas but fail to fill the trenches. Accidents occur due to uneven roads. There is no co-ordination between the water supply department and the engineering department, due to which there is delay in reasphalting work of roads. The PCMC should ensure that the contractor who has dug up the roads for pipelines fills the trenches and asphalt the roads. ”
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