Anil Pharande In Interview With The Realty Paper

Pharande Vaarivana Pune

Pharande Vaarivana Pune

Anil Pharande, Chairman – Pharande Spaces in interview with The Realty Paper

  • How is the current scenario in the Pune real estate market?

Pune is a powerhouse of potential when it comes to real estate. It is a city of learning and entrepreneurship, and there is a distinctly progressive flavour to everything that happens there. Thanks to the fact that it has become a magnet for IT/ITES and manufacturing companies, the real estate market in Pune is not likely to lose its forward momentum. That said, I always had misgivings about the opportunistic manner in which property development was taking place within the PMC limits, and was far more interested in the holistic approach being adopted in Pimpri-Chinchwad.

  • What are your focal points of a real estate development firm?

In terms of locations, we have so far concentrated on the PCMC area and West Pune. My passion for real estate in PCMC has its reasons – the idea of being involved in the raising of a planned city on the lines of Chandigarh, so close to Pune, excited me. My primary objective has been to help steer the path of this planned development, which is why I got involved with CREDAI. Getting into the creation of township properties that would take the best advantage of the benefits that the PCMC offered in terms of superior infrastructure and phased real estate growth was the next logical step.

  • When was Pharande Spaces established?

Pharande Spaces was started in 1994 with negative capital. We launched purely on bank borrowings and goodwill.

  • Where are you most involved in the development of projects?

Since I come from a technical background, I have always placed great emphasis on employing the latest construction techniques in our projects. Our primary focus is on high-quality, visually aesthetic and lifestyle-oriented township projects that are environmentally sustainable and add to the grandeur of Pune’s real estate landscape.

  • Is Pharande Spaces involved in any other business verticals?

Apart from residential real estate, we are already into the manufacture of non-conventional energy equipment as well as distribution and power transformers. We have also forayed into the construction of malls and multiplexes. As already mentioned, we have so far concentrated on PCMC and West Pune, but are now firming up plans to expand into Goa as well.

  • Were you impacted by the slowdown in the real estate market?

Along with all other real estate development firms, Pharande Spaces faced all the ups and downs of the real estate market. We did not incur losses during the downturn, but we certainly did not experience much growth during the phase. Thankfully, the slowdown is now over and demand for quality housing is back with in force.

  • How many residential townships have you built till date?

We have built more than 25 residential projects to date, which include large integrated residential projects and two fully integrated townships.

  • L-Axis was Pharande Spaces’ first ultra-luxury township. Could you tell us more about the latest township you announced?

L-Axis is definitely one of the largest luxury projects we have launched. More recently, Pharande Spaces launched Puneville, a one-of-its-kind ultra-luxury township at Punavale in West Pune. The project is being developed on the 50-acre plot of a de-notified SEZ. The location in the heart of West Pune is literally perfect, being one kilometre from Wakad and with ready access to Aundh and Hinjewadi and further on to Lonavala and Mumbai via the Pune-Mumbai Expressway.

Puneville is a top-of-line luxury residential project designed on the lines of a luxury resort by Aedas, the global award-winning architects who have master-minded Venetian style hotels in Las Vegas and Macau as well as the Financial Centre in Shanghai and Marina Bay Sands at Singapore. Aedas ranks second among the world’s top architectural firms and will bring its full expertise to bear on Puneville. This project is by far the best in the country and incorporates every conceivable luxury feature, and outshines anything so far seen in residential real estate in Pune.

  • How do you view the real estate business at a personal level?

I am passionate about what I do, but have to admit that this business literally leaves no spare time at all. Relaxation is not even a factor.

  • Do you family members complain about your constant non-availability for them? This is a known syndrome among successful developers…

Quite possible, but I haven’t heard the complaints because I’m constantly on the phone.

  • Where do you and your family go for vacations? Do you have any favourite destination?

We have explored the world, mostly in context with my constant search for architectural inspiration for our projects. During these trips, my family members certainly enjoy themselves. We are particularly fond of Turkey, Singapore, Malaysia, Greece and China.

(As featured in: The Realty Paper)

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.

Infrastructure And its Correlation to Home Buying

Pharande Vaarivana Pune

Anil Pharande, Chairman – Pharande Spaces

In India, as in other countries, it is a simple fact that localities which are as close as possible to important workplace areas will be most consistently sought out by people looking to buy homes. Therefore, projects with great connectivity by railway and road, see the highest demand for residential properties.

Property investment is always driven by the infrastructure in and around a locality. From sufficient roads to reliable water supply and drainage, infrastructure includes all the physical characteristics which contribute towards creating sustainable communities. Unsurprisingly, property costs close to infrastructure including airports, railway stations and roads are higher than in other regions.

If a location does not offer reliable electricity and water supply, connectivity, public transportation stops and sanitation by ways of good sewerage and waste disposal, it will not work as a residential destination regardless of what else it offers. All these are services that nobody living in a modern Indian city is prepared to live without.

From a property marketplace outlook, sufficient infrastructure in an area includes everything that leads to an easier, convenient lifestyle which does not have to contend with any kind of shortages, service outages and breakdown of public facilities.

Well-planned roads and public transport

Roads are required to make transport quicker and simpler. They are important right from the time when basic infrastructure and initial real estate development are being put in place, as raw materials and labour has to be able to reach the location. Once the area is established, roads let people travel to and from work, for kids to get to and from school and for access to shopping and entertainment.

Proper planning of road, rail and public transport nodes is very important. The key factor to be kept in mind during this planning is that people do not want to too close to bus depots, railway stations, shopping areas and industries businesses – but neither will they wish to be too far away from them.

Reliable supply of essential utilities

In a developing country like India, there are still many towns and suburbs of cities that do not enjoy reliable water and electricity supply, garbage management and public security features. With the income of typical Indian families constantly growing, today’s urban homeowners are willing to spend more to get access to seamless water and electricity, and adequate security.

Naturally, residential complexes that provide 24×7 water and electricity supply and round-the-clock security are far now highly favored. This is what has led to the growing momentum of township development in Pune and even more so in PCMC. Housing projects in places that don’t have reliable utilities and where security is a concern do find takers – but these are usually exceptionally budget-strung buyers who resign themselves to having to wait for everything to fall in place at some stage.

Sanitation infrastructure

In India, there has been rising awareness of the minimum levels of sanitation that a household should have access to. A new location will only start attracting real demand from homebuyers if it offers appropriate measures of sanitation such as municipal road cleaning, trash removal, sewage and waste water disposal, and other related services. Without these services, life becomes unhealthy and intolerable. A location’s score on the sanitation front is a very important criterion for homebuyers who are shortlisting housing projects in which to buy a property.

Social infrastructure: Schools, hospitals, shopping and recreation

Indian families put great onus on the availability of schools in a residential neighbourhood. This is why areas with good schools in the vicinity fetch higher property rates than most others. This is not only a question of convenience for Indian parents, but also of the safety for their children. Because of life’s uncertainties and the rise in road and domestic accidents, hospitals are another component in an area’s social infrastructure that is of critical concern for homebuyers. They expect quick access to medical facilities –  this is non-negotiable.

Recreational open spaces such as parks are also consistently in favour from city dwellers that wish to experience nature to some extent, and thereby be able to find some refuge from the urban madness that rules most of their days. A locality that offers water bodies, gardens, parks and playgrounds in the vicinity are considered premium.

Developers of large integrated townships are aware of how important the availability of good social infrastructure has become, which is why they include gardens and artificial lakes as well as schools, shopping and entertainment inside the project premises for their residents.

Infrastructure in all its facets is therefore hugely important in today’s residential property scenario, and it directly influences the buying behavior of Indians scouting around for homes. The degree to which social and civic infrastructure is available in a neighbourhood dictates how successful a residential destination is today.

This is why integrated townships have become the most important trend on the Indian property market today. Townships are not dependent on how proactive the municipality and private sector players in deploying social and physical infrastructure. They deploy it themselves in perfectly-contained microcosms that not only include residential projects but also office and retail complexes as well as educational and healthcare facilities.

Integrated townships ensure that their residents have everything they need for a modern comfortable and secure lifestyle accessible within easy reach, for instant use. The high demand for township properties in rapidly urbanizing cities like Pune and PCMC vouchsafes the fact that homebuyers are no longer willing to compromise on the advantages of sufficient infrastructure in their neighbourhoods.

About The Author:

Pharande Vaarivana Pune

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.

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.

Punawale Now: Taking West Pune Real Estate To The Next Level

Pharande Vaarivana PuneTaking West Pune Real Estate To The Next Level

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.
Source

Pune Property Tax Rates May Rise With New System

Based on the directions of the state government, the Pune Municipal Corporation (PMC) has decided to introduce the capital value system (CVS) for computing the Annual Rateable Value of a property, for fixing the property taxes in the city. The civic administration has tabled a proposal before the standing committee regarding the move.
The move has been designed to bring uniformity in the taxation system in all the municipal corporations across the state. As a result, if the proposal is cleared, the property tax charges might go up.
At present, the ARV is fixed on the standard rents fixed by the Rent Control Act. Under the ARV system, the probable gross rent of a property is taken into account. For domestic buildings, 20 percent of the amount is calculated. For commercial buildings 25 percent of the amount is calculated.
Under the new CVS, the calculation of tax is based on the value of the land as well as that of the building. It takes into account the capital value of the building, which is in turn based on the cost of the land as well as the cost of the building, net of depreciation.
The proposal says: “In different municipal corporations in the state, there are different methods of fixing the ARV of a particular property. But, in order to bring uniformity, transparency and introduce simplicity, the new method of CVS is being considered.” The ARV fixed under the capital value system, will be updated every five years.
Source
http://www.indianexpress.com/news/New-system-on-anvil-to-evaluate-property-tax-likely-to-push-up-rates/677588

Property Tax Defaulters To Pay Two Per Cent Penalty To PMC

PUNE: Starting October 2010, the Pune Municipal Corporation (PMC) will execute the state government’s notification to impose a two per cent penalty on property tax defaulters.
The state government on May 31, 2010, issued a notification, according to which the civic body has been authorised to impose a fine of two per cent every month if the property tax is not paid in the given period of time.
For the year 2010-11 property tax for the first six months has to be paid before September 30, 2010, and those who fail to pay it will have to pay a two per cent penalty on the tax amount every month till the tax is paid. The second instalment of the property tax has to be paid before December 31, 2010.
“The standing committee on Friday approved the proposal to impose a penalty. This will help the PMC to collect property tax on time and even citizens will respond positively to paying on time,” said standing committee chairman, Arvind Shinde while speaking to reporters.
In the last two years, the PMC has brought nearly 80,000 properties under its tax net. However, an estimated 45,000 properties still remain out of its reach. The standing committee has repeatedly told the administration to make an effort to widen its tax net. Once the unassessed properties come under the tax net, the civic body is expected to get an additional revenue of Rs 100 to 150 crore.
The PMC’s tax collection and assessment department has already submitted a plan to the standing committee. After octroi, property tax is a major source of revenue for the civic body. The department has proposed that digital pictures of all properties be taken for records and an aluminium plate be fixed on each property, identifying its survey number and other details.
Source

Free Parking Space Norm In Pimpri-Chinchwad Municipal Corporation

Pimpri-Chinchwad Municipal Corporation is the first civic body in the state to come up with a decision under which buyers of residential apartments get free parking space.
On June 11, 2009, the Pimpri-Chinchwad Municipal Corporation (PCMC) declared that no building permission plans will be sanctioned if the builders refuse to provide free parking space to apartment buyers across the twin industrial township.
This was after a series of reports in Pune Newsline, highlighting the Bombay High Court which had ruled that builders cannot sell parking space and that it should be made available to the flat buyers free of cost.