Pune Real Estate Market 2010 And Outlook for 2011

December 27, 2010  //  Posted by: Anil Pharande  //  Category: Affordable Housing, Builders, Buying Property, Commercial Property, Developers, Flats For Sale, Housing, Infrastructure, Projects, Properties, Properties For Sale, Property Blogs, Property Buyers, Property Market, Property Prices, Property Rates, Pune, Pune News, Pune Real Estate, Real Estate Investment, Real Estate News

2010 saw increased buoyancy on Pune’s residential market, which has been in steady recovery since 2H09. The confluence of price correction ( 10%-25% in 2009) along with rational mortgage rates offered by banks has increased affordability. Moreover, with the improving economic conditions as evident from the increased absorption of office space, there is improved employment security, creating fresh demand for housing in the year 2010. There has been spate of residential launches in the city, with a 10-12% increase in capital values witnessed across all the residential pockets of the city.

Buyers in the mid-income segment of housing (INR 3-5 million) have returned in force, as have those for premium category housing. In fact, the year 2010 saw a significant number of luxury home projects in Pune. Some of the notable ones are Marvel Aurum at Koregaon Park, Marvel Bounty and Azure on Magarpatta Road, Marvel Ganga Sangria at Undri, the recently launched Yoo Pune by Panchshil at Hadapsar and Windmere by Vascon developers at Koregaon Park.

Commercial Real Estate

The total absorption of office space in Pune, recorded at approximately 2.5 million sq ft during the first three quarters of 2010, clearly indicates the onset of a demand revival. Occupiers strongly believe that this is the right time to execute their expansion plans, since property prices were at their lowest valuations in 2010.

An important feature of the absorption in 2010 has been the revival of demand for SEZ spaces. The impact was clearly visible with a majority of Pune’s office space transactions (around 60%) recorded in SEZs in 2010. In 2011, demand is expected to strengthen across markets, along with an increase in SEZ absorption. The suburban micro-market, comprising primarily of the Hinjewadi region, is likely to benefit as it houses most of the upcoming SEZ supply. The secondary business district (SBD), on the other hand, currently has a significant share of the city’s ready-to-occupy as well as under-construction stock located in SEZs (EON Cluster D, Cluster B and Cluster A and Magarpatta’s Cybercity Towers VIII and IX) and various STPI units. This will also contribute significantly to the overall absorption levels in the city during the coming quarters.

Pune’s office market is expected to see a significant supply to the tune of aprroximately 14.53 million sq ft in the next two years, with most of the supply located in SBD and the suburbs. Some of the major developments in SBD amongst the IT completions would include Commerzone buildings 5, 7 and 8 at Yerwada and Weikfield IT Park’s Block B at Viman Nagar. Completions amongst SEZs would include EON clusters A and B and Magarpatta’s Cybercity buildings 8 and 9 at Hadapsar. The majority of the future supply in the suburbs would comprise of various IT SEZs by DLF, Paranjape (Blue Ridge), Embassy Group (Embassy Tech Zone) and Shapoorji Pallonji Group (SP Infocity).

Rentals are likely to remain stable across all precincts in the coming quarter, but will gradual increase towards mid-2011 and 2012.

Retail Real Estate

Pune’s organized retail landscape will undergo a significant transformation. Rentals and the commercials in retail has stabilized, and retailers are now occupying space more aggressively.

Some quality retail developments lined up for completion in 2011. The notable ones include Phoenix Market City , K Raheja’s Inorbit on Nagar Road, Amanora Market City at Hadapsar and Elbit’s PlazaCentre at Koregaon Park. Also, G Corp will become operational with approximately 0.4 million sq.ft of retail.

As a result, a number of international brands will set up shop in Pune for the first time. The notable ones will include Zara, Blue O and Spar, which will open their doors to a new line of fashion and entertainment.

Moreover, some well-known national brands will launch for the first time in Pune in 2011. Reliance Trendz, PVR, Reliance Footprint, Jack and Jones, etc. will cater to the young and the vibrant Punekar for the first time.

Future Group has added approximately 0.5 million sq.ft to their Pune portfolio. The group has recently launched their mega Pantaloon store at Senapati Bapat Road. Trent has also jumped onto the Pune retail bandwagon. The Tata Group already has one hypermarket under the name Star India Bazaar operational at Pune, and is going in for three more.

Mohammed Aslam, Head – Pune, Jones Lang LaSalle India

Used with permission from India Real Estate Compass by Jones Lang LaSalle India

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Pune Real Estate: Why Integrated Residential Projects Make Ultimate Sense

November 20, 2010  //  Posted by: Anil Pharande  //  Category: Builders, Buying Property, Developers, Environment, Green Architechture, Housing, Indian Homebuyers, Investment Advice, Investment Tips, News, Pimpri, Pimpri Chinchwad, Pradhikaran, Pradhikaran Properties, Projects, Properties For Sale, Property Blogs, Property Buyers, Property Market, Property News, Pune, Ravet, Real Estate Investment, Real Estate News, Real Estates, Realty, Residential Property, Satellite Town, Sustainable Development, Township, Township Properties
Woodville Pune

For Pune builders, developing a project like Woodville is more than just a business proposition

I have often been asked why developers such as Pharande Spaces concentrate primarily on large, integrated residential property projects. After all, doesn’t it make more business sense for Pune builders to launch smaller projects?

Why don’t developers of large-format residential property schemes cash in for demand for more ordinary flats for sale in Pune? Here are some of the arguments I hear:

•    The developer’s construction costs for smaller residential property developments is much lower
•    They require a lot less land, and can be constructed in central areas where demand is high
•    They can benefit from whatever infrastructure already exists in the locality, so there’s no need to put in much more
•    They can be constructed much faster and also sell much faster to a ready clientele who are looking for flats for sale in Pune
•    There was demand for smaller residential projects even while the recession was on

Tempting arguments, for sure – but they represent the small picture.

•    True, integrated residential projects can only come into existence if the developer has considerable land parcels at his disposal. Even if he does, such land parcels are only available in areas like Pune’s Pimpri Chinchwad Municipal Corporation, which is not near the city center.
•    True, he must supply all the infrastructure and public utilities in such a residential project
•    True, there is a ‘wastage’ of develop-able area because such large residential developments, by necessity, call for huge open spaces
•    True, integrated residential projects take a much longer time to complete than smaller, stand-alone projects

However, this is a limited viewpoint. It does not factor in the most pressing requirements on the Pune residential property market – regulated urban development. The fact is – a multitude of smaller projects disfigure the face of a location, put its infrastructure under tremendous pressure and are usually overpriced because of ‘location value’. One look at the current property rates in Pune will confirm this – what you pay for in location, you lose in comfort and convenience.

In sharp contrast, well-planned integrated residential property schemes beautify, uplift and give value to a new location. Not only do they bring in their own infrastructure – despite being on the outskirts, they also provide residents with all the benefits and comforts of a more centralized location. The vast open areas provided in integrated residential projects are not wasted space – they are what spacious, dignified living is all about.

There is more. Because integrated residential projects have their own retail outlets, office complexes and entertainment facilities, they reduce commuting and transportation time and expense. In fact, they inject life into a new location and raise its value on the real estate market.

For the sake of an argument, let us consider the Woodsville project at Ravet in Pune’s PCMC area:

•    It is located next to a major arterial road that provides direct access to Pune city and the most prominent industrial hubs of the Pimpri Chinchwad MIDC
•    It is a self-contained and completely integrated residential project that has homes of every description and to suit every budget
•    It offers retail, healthcare and entertainment facilities to its residents
•    Like many other projects of its kind, it offers 360-degree, multi-level security to home owners

What smaller residential project in a city like Pune can offer so much to its residents within a single location?

Developers like Pharande Spaces focus on integrated residential developments because they positively transform the landscape and uphold all precepts of sustainable development.

Moreover, the new generation of large, integrated residential projects in Pimpri Chinchwad Municipal Corporation have made modern, fully-equipped and self-sufficient residential projects affordable to the middle class. No longer are such properties available only to moneyed HNIs and NRIs.

Thanks to this, even salaried individuals can buy a home in a project such as Woodsville or Celestial City, both of which offer well-defined living spaces, recreation facilities, office complexes, convenient retail establishments and a superior standard of living. These projects offer ultimate value for money to those who seek to buy property in Pune.

Which leads back to the original point. In a city like Pune, integrated residential schemes make more sense than smaller projects because they are the most modern and sustainable model of urban growth – and to a better way of living.

To own a home in one of them is an assurance of a lifestyle that cannot be replicated elsewhere in a crowded city. Developing such a project is more than a business proposition – it is an opportunity to contribute to the future of the city’s real estate market.

Is that not reason enough?

Anil Pharande is Vice President of CREDAI (Pune Metro) and Chairman of Pharande Spaces, a leading construction and development firm that develops township properties in the PCMC area of Pune, India.

You may reprint or quote this article with full credit to the author and a link back to PunePropertyBlog.com

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PMC To Initiate Steps For Smooth, Speedy TDR Process

October 26, 2010  //  Posted by: Anil Pharande  //  Category: Builders, Developers, Projects, Property News, Pune, Pune Muncipal Corporation, Pune Real Estate

(TOI, Oct 26, 2010)

PUNE: Municipal commissioner Mahesh Zagade on Monday said that every possible step was taken to ensure smooth’ and speedy’ process to issue Transfer of Development Rights (TDR) to citizens whose property is acquired for public purpose. The General Body (GB) meeting of the PMC meanwhile approved the state government’s amendment to the Maharashtra Regional Town Planning (MRTP) Act regarding issuance of TDR.

Following the complaints made by corporators on Monday that common citizens whose land is acquired for public purposes are facing problems to get the compensation in form of TDR, Zagade assured that the administration would put in efforts to avoid any complications resulting in delay in the process.

“We have already initiated steps according to which every head of department is aware of the land they have to acquire and the compensation they have to issue for the same. We are trying to set up a mechanism where any delay in issuing TDR could be avoided,” said Zagade. He added that the primary responsibility to start the TDR process is of the heads of departments and they have to communicate with the land owners.

The GB also approved the state government’s amendments to the MRTP Act. As per the new rules, TDR issuance shall now be permissible in the cases where award has not been declared and the possession of the land has not been taken.

TDR issuance shall not be permissible where possession of land has not been taken and where the full or partial amount of compensation has been paid by the municipal corporation or the government under any provision of any Act. TDR issuance shall not be permissible if the amount is deposited in the treasury or the court or the land owner or interested person accepts a part of the full compensation.

The process to issue TDR became more complex after a multi-crore TDR scam had rocked the PMC in 2005. The first scam hit headlines in October 2005, when it was found that the PMC had been allegedly duped to the tune of Rs 14 crore by two property owners and their agent, who procured TDR for a plot of land in Kothrud which had already been acquired and paid for by the civic body.

The civic administration had then lodged a complaint of cheating and forgery against Prabhakar Bhide, Haridas Parekh and Balaji Hire.

Bhide and Parekh owned a plot of land in Kothrud, which was reserved under the Development Plan of Pune for a municipal garden. The PMC had acquired the plot by paying monetary compensation to them.

However, the case took a turn when corporators claimed that the scam was masterminded by civic officials themselves and not by the property owners. The scam had later been referred to the state Anti-Corruption Bureau in view of its serious nature.

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Pune Real Estate On A High Trajectory

October 13, 2010  //  Posted by: Anil Pharande  //  Category: Commercial Property, Malls, Mid-income housing, Property Market, Property News, Pune, Pune News, Pune Real Estate, Real Estate News, Realty

(TOI, Oct 13, 2010)

PUNE: Prices of the city’s residential property are witnessing a rise, if market observations of leading realty research firms are an indication. Rentals of commercial space are also witnessing an upward movement, though the market cannot yet be called a heated one, the firms have said.

Rates in different parts of the city have recorded anything between 15 to 25 per cent rise in the past one year or so, rising customer interest being one of the factors, the observers added.

“As far residential properties are concerned, the sector is moving again for the last six months or so. Previously, we had thought the returning demand will fizzle out by April, but that has not been the case. The impression one gets is that Pune’s home buyers are once again convinced of the long-term potential of their investments,” Mohammed Aslam, Pune head for real estate advisory Jones Lang LaSalle India told TOI.

“I won’t say that the market is back with all guns blazing, but matters have improved considerably. Residential sales and retail lease figures for the month of July 2010 look astonishingly different than from this time last year, Aslam of JLL said.

For mid-income homes, the hottest-selling locations are now in western Pune, he observes. Buyers have the widest choice there because of the large number of projects popping up all over Hinjewadi, Wakad, Pimple Nilakh, Pimple Saudagar, Aundh and Balewadi. Secondly, this influx of projects is serving to keep prices affordable. In western Pune, average residential property rates start at around Rs. 3,200 per sq.ft. and hover around Rs 4,000 per sq.ft. The most popular price tags for homes in these areas are between Rs. 30 to 40 lakh.

Manish Aggarwal, executive director, investment services, Cushman & Wakefield India (C&W), said, “With India’s economic environment showing signs of stability and buoyant growth, coupled with improvement in affordability and access to finance, housing demand in the country is expected to witness a revival in the near future.”

According to the C&W report, Pune is expected to witness the highest demand in residential sector after National Capital Region (NCR) and Mumbai. Pune is estimated to witness a demand of 2,70,000 housing units by 2014, the report says. “The growth in demand for residential units in Pune can be attributed to rapidly growing city population (both migratory & local), coupled with improvement in economic environment with stimulate growth of both IT and manufacturing sectors in this city,” the report adds.

Real estate advisor Ravi Verma, a former official of the National Association of Realtors, said, “The residential market is moving briskly and both high-end and economy segments within the residential sector are doing well. There is however a warning here, that the prices are rising slowly but definitely.”

Offices segment, on the other hand, has yet to pick up speed, as there is a sizeable overhang of stock created or planned prior to the economic slowdown of 2008-09. Verma said the information technology sector which drove most of the deals in the early part of the decade is still slow in absorption of space and so are the retail and commercial spaces.

Aggarwal said, “The overall demand for commercial office space is subdued in comparison to the supply which is estimated to be approximately 400 million sq.ft during 2010 to 2014, implying caution and the need for quality supply at the right prices.” According to him, the demand for retail space across the country is estimated to be 55 million sq.ft; of which the top seven cities will witness approximately 53 per cent.

The total mall supply expected between the period under review is approximately 93 million sq.ft. NCR, followed by Pune, is likely to witness the highest demand-supply gap over the next five years, with supply overshooting demand.

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Pune Real Estate: Issue of Illegal Constructions Resurfaces

September 16, 2010  //  Posted by: Anil Pharande  //  Category: Construction, Developers, Pimpri, Pimpri Chinchwad, Pune Real Estate, Real Estate News

The issue of illegal constructions has resurfaced on the agenda of civic bodies. Pune Municipal Commissioner Mahesh Zagade, who found out that there was only one building inspector per ward office to keep check on construction activity has decided to set up a new system for tackling the issue of illegal constructions. On the other hand in the neighbouring Pimpri-Chinchwad, 25 corporators who have constructed illegal buildings find themselves in the dock as the state government has asked Dilip Band to probe the matter and suggest necessary action.

“There is no doubt illegal construction has come up in the city in last few years. There is one building inspector for each ward office who has the responsiblity of checking the construction related activities. The person has to check construction that comes up as per the permission and also tacke action against illegal construction. It is a difficult job for one person,” said Zagade.

Zagade said the construction activity is at peak in the suburbs while very minimum in the old city area. “Thus, there is a plan to shift the manpower available to the ward office that has more construction activity from the place where there is not much work,” he added.

The municipal commissioner has directed all the zonal commissioner to prepare list of illegal constructions in their jurisdiction so that action can be initiated against them.

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Pune Builders Want Land Norms On Par With Mumbai

September 11, 2010  //  Posted by: Anil Pharande  //  Category: Builders, Developers, Housing, Property Market, Pune, Pune Land, Pune Muncipal Corporation

The Confederation of Real Estate Developers’ Associations of India (Credai), Pune has made a representation to the Urban Development Department secretary, TC Benjamin, to make more land available by applying the same parameters of redevelopment for wadas and old city areas as the department has done in Mumbai.

Credai Pune launched a property exhibition at the Le Meridien hotel in he city on Friday. The exhibition will be on till Sunday. The projects offer one BHK to 5 BHK, penthouses, row houses, bunglow plots and offices in PMC, PCMC and surrounding areas.

Shantilal Kataria, vice president Credai, hopes the organisation’s proposal will be approved before Diwali as promised by the Mayor.

“Land prices currently are out of control, and are more than the prices at the peak in 2008. Short supply of land will lead to an upward pressure on prices, and therefore the builders are keen that land is made available soon so that affordability is not affected.” he says.

After having to tackle the lull in the market, it is the shortage of supply in land that developers have to address, highlighting the return of normalcy in the sector . Anuj Bhandari, exhibition committee chairman, Credai, declared that the Pune realty industry has returned to normalcy. “People are now keen on buying homes as the IT and manufacturing industries have started hiring and the economy is looking up with the GDP at a robust eight per cent. But stock of good quality homes is fast depleting,” he said.

The members however do not want to raise prices even as there is shortage.

Satish Magar, president, Credai, Pune, feels that past experience shows sales happening within a certain price band. While demand for ultra luxury homes remains, notwithstanding the general outlook, has people willing to buy in the 2,500/sq.ft- to 4,000/sq.ft price band. “If prices jump too high, demand shrinks significantly. The challenge for us is to maintain quality even as input costs keep rising,” says Magar.

Explaining the issue further, Rohit Gera, vice president, Credai added, “homes are built by established or serious players and also by the fly-by-night operators. A well established builder will ensure that the flats he builds meet all norms, legal, environmental and financial. But on account of very poor land availability, new projects are slow to launch even though demand has returned. So we have projects that are good and safe to buy and also those that are built by those who are in it to make a quick buck. As a result good quality homes are not as easy to find.” The Credai Mega Property exhibition has also banks ICICI and HDFC participating.

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Celestial City Inaugurated By Bollywood Actress, Urvashi

August 21, 2010  //  Posted by: Anil Pharande  //  Category: Apartments, Builders, Buying Property, Construction, Developers, Flats For Sale, Housing, Indian Homebuyers, Investment Advice, Investment Tips, News, Pimpri, Pimpri Chinchwad, Projects, Properties, Properties For Sale, Property Blogs, Property Buyers, Property Market, Property News, Pune, Ravet, Real Estate Investment, Real Estate News, Real Estates, Realty, Residential Property, Satellite Town, Township, Township Properties

Celestial City, an integrated township spread over 25 acres at Ravet launched the second phase of the project on August 13. Well-known model and screen actress, Urvashi Sharma inaugurated the new phase.

A joint venture of Rama Group and Pharande Spaces, Celestial City comprises everything one would find at a residential complex and more, including entertainment, leisure, and amusement; from a mall, multiplex, lounge bar to an aqua park, and an all encompassing sports arena.

Among the many notable personalities from the real estate sector present for the occasion, were Anil Pharande, Director, Pharande Spaces, Ram Panjabi, Founder of Rama Group, Moti Panjabi, MD, Rama Group, Govind Panjabi and Jeetu Panjabi and Raju Panjabi of Rama Group. The occasion also marked the unveiling of the new Celestial City ad campaign.

Read more: Urvashi attends a Pune do – Bollywood – Filmi Parties – Entertainment – The Times of India

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Pune Builders Want Extra FSI For Redevelopment Schemes

August 14, 2010  //  Posted by: Anil Pharande  //  Category: Administration, Builders, Developers, Investment Advice, Investment Tips, Mumbai Real Estate, News, Projects, Properties, Property Law, Property Market, Property News, Pune, Pune Muncipal Corporation, Real Estate Investment, Real Estate News, Real Estates, Realty, Selling Property

A rage in Mumbai with the Bombay Municipal Corporation giving additional FSI to builders, Pune is still going slow with such schemes.

The Confederation of Real Estate Developers Association of India (CREDAI), Pune, head, Satish Magar said, with no incentives being offered to the builders as in Mumbai, developers are not too keen on taking up such projects. “In Pune there are several such buildings which needs redevelopment. However, with no incentives, the builders have to settle with very less profit and generally steer clear of such projects,” he said.

A senior town planner said that Bombay Municipal Corporation (BMC) was proactive and made the amendments as land was becoming scarce and got the extra FSI to go higher which made them take up several dilapidated projects. “The BMC made the necessary changes in the development control rules and it is being implemented,” he said.

While a senior member from the Mantralaya said that it is the duty of the civic body to make the necessary amendments. “ If Bombay Municipal Corporation can do it, so can Pune. Once the amendments are made and the necessary proposal is passed by the GB, then Pune too can have a plan ready for redevelopment especially for the old dilapidated structures,”he said. A civic body member said that presently there are no sops for developers.

Read the rest of this article here.

Twin Levies Hit Home Sales, Registrations In Maharashtra

August 09, 2010  //  Posted by: Anil Pharande  //  Category: Builders, Buying Property, Developers, Housing, Indian Homebuyers, Investment Advice, Investment Tips, Mumbai Real Estate, News, Properties, Property Buyers, Property Law, Property Market, Property News, Property Prices, Property Rates, Property Registration, Property Tax, Pune, Real Estate Investment, Real Estate News, Real Estates, Realty, Residential Property

It’s turning into a battle between property developers and home buyers in Maharashtra, as the two argue over who will pay the service tax and the recently-imposed value added tax. The twin blow is holding up a large number of property registrations across the state, say top realty brokers and developers.

In Pune, the auto and information technology hub, property sales have come down by half because of this issue, says Pankaj Kapoor, managing director of Liases Foras, a real estate research and ratings firm. “The Pune market was doing well in the last quarter, now with the imposition (of the levies), it is badly hit. Even the sales have been hit in the peripheral areas of Mumbai [ Images ],” Kapoor says.

According to Kapoor, home sales in Mumbai have been impacted to the extent of 15 to 20 per cent due to the problem. Recently, the state government imposed one per cent VAT on the contract price of the houses mentioned in the sale agreement registered on or after April 1 this year.

With the Centre’s imposition of 2.38 per cent service tax on under-construction properties, which came into effect at the start of July, the additional burden (excluding the five per cent stamp duty and registration charges) comes to 3.38 per cent of the property value.

Suppose, if a person buys a house of Rs 1 crore in Mumbai, he has to now shell out an additional Rs 338,000 as VAT and service tax, which effectively translates into an equated monthly installment of around Rs 4,000.

What has made matters worse for buyers is that the additional burden is coming on top of the sharp rise in home prices. According to a report from brokerage house IIFL, residential prices in Mumbai and the National Capital Region of Delhi have increased 20-30 per cent since March and have reached new highs.

“Any additional cost is going to impact sales,” says Mrunal Duggar, vice-president, Homebay Residential, a unit of Jones Lang LaSalle Meghraj. Already home sales in Mumbai went below 6,000 units in May after 11 months of 6,000-plus a month, the IIFL report says.

Developers say the state government might also impose one per cent of the cost of construction as labour charges, which will increase burden further. Duggar of JLLM say developers should look out for the any additional burden on the potential customer in the reviving market.

Read the rest of the article here.

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Pune Builders Seek Relaxing Of Construction Rules

July 31, 2010  //  Posted by: Anil Pharande  //  Category: Builders, Developers, Housing, Infrastructure, Municipal Corporation, News, PCMC, Pimpri, Pimpri Chinchwad, Plots, Projects, Properties, Property Law, Property Market, Property News, Pune, Real Estate News, Real Estates, Realty, Residential Property, Transport

PUNE: Responding to complaints from builders, Pimpri-Chinchwad mayor Yogesh Behl said that only the civic general body can make any change to the rules for constructions in the bus rapid transit system (BRTS) corridors.

“A delegation of 25 builders met me two days ago and said that the strict rules for constructions in the BRTS corridor have made it difficult for them to undertake construction in the corridors,” Behl told TOI.

Behl said that the Pimpri-Chinchwad Municipal Corporation (PCMC) has framed new rules for construction within 100 metres along the eight BRTS routes and four feeder routes which are called BRTS corridors.

While allowing double floor space index (FSI), the civic body also made it mandatory to double the parking space. If the area of the plot is more than 1,000 sq.m., the owner/developer will have to develop the parking area and give 25 per cent of it to the PCMC free.

Read the rest of this article here.