The PCMC Chapter In Pune’s Real Estate Growth Story

Arvind JainArvind Jain, Managing Director – Pride Group

When we look at Pune’s real estate market, we see ample justification for it having emerged as one of India’s most aspired-for residential property investment destinations today. Its advantageous connectivity to Mumbai is only the tip of the iceberg, though this fact did play a big role initially.

Pune also has an unmatched economic profile, with a huge number of multinational companies and industries active in and around the city. Pune’s economy is significantly driven by foreign business, and this fact has resulted in the city becoming an independent economic microcosm that no longer depends on Mumbai – or, for that matter, any other city.

The jobs being created by the multitude of large domestic and global industries have made Pune one of the most important employment markets in India – and employment drives demand for real estate. This dynamic has resulted in a quantum boom in real estate development.

Without a doubt, Pune’s urban growth has been phenomenal, and each year sees more and more people migrating into the city from all over India. The fact that Pune’s population is growing so rapidly has made it necessary for new infrastructure to be put in constantly.

However, even though we are seeing constant infrastructure upgrades in the city, the fact is that the Pune Municipal Corporation has been largely unable to meet the pressing requirements for better roads, parking, public transport or electricity and water supply. This is indeed worrisome, as Pune will expand dramatically over the coming years, both geographically and in scope.

One of the most important aspects that will need to be looked at is inter and intra-city road connectivity. Pune’s many residential and commercial nodes need to be much better connected, and its connectivity to other key cities must also be upgraded.

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The work at hand includes the construction of new roads and widening of existing roads, building more flyovers and subways to reduce traffic congestion, and more reliable public transport.

In this scenario, the upcoming 90-meter wide Ring Road that will provide connectivity between the Pune Municipal Corporation and the neighbouring Pimpri-Chinchwad Municipal Corporation (PCMC) is an infrastructure initiative which will make a huge difference.

But more than connectivity, the manner in which the Ring Road has been planned once again highlights how important PCMC has become in the overall Pune growth story.

The PCMC presents a picture of urbanization which is very different from that of Pune. PCMC has been globally acclaimed for its accent on planning and infrastructure. As a municipal corporation, it has won multiple important awards on various counts. In terms of its real estate sector, it is by far the hottest chapter in Pune real estate’s growth story, thanks to its thriving industrial and automobile manufacturing belt.

In fact, the MIDC area in PCMC is a veritable Who’s Who of massive multinational and domestic companies that are generating a tremendous number of jobs each year, and thereby driving the demand for homes in areas which provide ready access to these workplace hubs.

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Among the most promising locations under PCMC’s purview, areas such as Charholi enjoy the best of both worlds. Located on the border of the Pune Municipal Corporation and PCMC, this area benefits equally from the Bhosari-Chakan industrial belt and the Hinjewadi IT hub. It also provides superlative access to important locations in the Pune Municipal Corporation such as the Pune Airport, the entire Nagar Road belt, Kalyaninagar and Koregaon Park.

It is interesting to note how the distance between the PMC and PCMC has shrunk over the years, even as Pune is growing exponentially. The Pimpri-Chinchwad Municipal Corporation is no longer an outlying sister city but is now, for all practical purposes, considered as part and parcel of Pune’s larger landscape. As such, there is a high level of combined, symbiotic growth which will put Pune in an even stronger position in terms of attracting investments into its real estate sector in the future.

About The Author

Arvind Jain is Managing Director of The Pride Group, a world-class property development conglomerate that is changing the cityscapes of Pune, Mumbai and Bangalore. Established in 1996, Pride Group has built and delivered over 10 million square feet of constructed area. Pride Group has recently launched Pride World City, the 400-acre luxury mega-township at Charholi, Pune. 

Finding A Home That Supports Working From Home

Arvind Jain1Arvind Jain, Managing Director – Pride Group

The work from home culture has been steadily gaining popularity across the globe, and several corporates have already adopted as core offerings. According to Forbes, 75% of professionals will be working in their pajamas by the end of 2017 instead of putting on a suit and driving off to office every day.

Companies like Ernst & Young and Accenture already have more than two-thirds of their employees working from their homes. This trend is steadily infiltrating the corporate world, and offers several advantages to both employees and their employer.

With technology becoming a big part of modern day work processes, all one needs is a laptop and a good internet connection to communicate, team up and drive productivity. Employers are allowing remote working not only to make employees more comfortable with how they work – it is also saving them a lot in infrastructure investment. At the same time:

  • Many professionals are ditching their corporate jobs to start their own businesses
  • More and more companies are looking for consultants instead of permanent employees
  • Freelancing has spread across all industries, be it technology or art. Gen X professionals enjoy the benefit of working in their own terms, and getting engaged in projects that they hold expertise in and have a passion for.
  • This change in work culture has also affected the priorities of young professionals looking for homes.

How this new trends impact the home buying process

Obviously, the first thing that work-at-home professionals are looking for is projects in areas where dependable power supply and internet connections are available. Also, one of the more important reasons that have brought about a growth in work-from-home, consulting and freelancing is the implied flexibility and convenience.

Consequently, it becomes important that the homes such people buy are in close proximity to lifestyle requirements like shopping, healthcare, education and entertainment.

The other basic features of the properties such professionals seek include 24×7 water supply, emergency power backup and a peaceful environment that facilitates a productive working day, every day. At the same time, such professionals are looking for homes that aren’t too far off from the city center, yet spare them from having to suffer traffic, pollution and the many other ill effects of urbanization.

A tall order? Not really.

Where can you find such properties?

City centers of most economically vibrant Indian cities have already become saturated a long time ago. Other than for the extremely rich, there are no housing options in the main city areas of Mumbai, Delhi, Bangalore or Pune that meet both the budgets and requirements of the new ‘work-from-home’ breed of Indian professionals.

Apart from the growing population and pollution in these areas, the existing infrastructure is always breaking down and traffic jams invariably lead to wasted time and resources. This scenario also reduces the potential of productivity.

The best options in this situation are integrated townships which, due their size and scope, are developed on the peripheries of large cities while simultaneously offering good connectivity to the city itself.

A rather newer addition to the Indian property market, integrated townships provide their residents the perfect combination of a productive environment, reliable utilities and easy access to city resources.

Importantly, these townships also bring with them the convenience of their own shopping complexes, schools, hospitals and avenues of entertainment.

Developed in serene environments, they ensure that young work-from-home professionals can maintain optimum productivity as well as a well-rounded and healthy family life.

The day-to-day running of the household is unchallenging and stress-free; and when they come along, children can grow up in healthy, active and safe.

Housewife working from home

Integrated townships are the ideal option for people who want to bring up their kids in a positive environment, and simultaneously enjoy a bracing and wholesome lifestyle themselves

Integrated townships also provide higher amount of security, a supportive neighborhood and all amenities for a vibrant lifestyle – from green open spaces to gyms to playgrounds

Even if one is employed in a regular day job which requires office attendance, integrated townships are the ideal solution because they are situated close to the city centers, with excellent connectivity and easy means of transportation.

This means that one can reach one’s workplaces faster and return faster, as well. In fact, many integrated townships have also fostered the ‘walk to work’ culture with their own high-class office complexes which attract the best of employers.

And when the work-from-home option or choice finally materializes, a home in integrated townships is already everything one will need to make a go of it.

Working from home, or planning to?

The work-from-home trend is catching up fast in India, and is likely to become a norm rather than an exception in the next ten years. Young professionals who are planning to take this route or set up their own businesses from home in the future should start identifying the ideal home options sooner rather than later.

Homes in integrated townships that are currently under construction carry attractively lower price tags than ready-to-move apartments. If one chooses a high-quality township by a reputed developer, the perfect choice for a home is made. This is why integrated townships are in such high in demand today.

 About The Author:

 Arvind Jain is Managing Director of The Pride Group, a world-class property development conglomerate that is changing the cityscapes of Pune, Mumbai and Bangalore. Established in 1996, Pride Group has built and delivered over 10 million sq.ft. of constructed area. Pride Group has recently launched Pride World City, the 400-acre luxury mega-township at Charoli, Pune.

Startups Driving Real Estate Investments In Pune

Arvind Jain1Arvind Jain, Managing Director – Pride Group

The massive spurt of launches in startups that India has been seeing has significantly boosted overall investments as well as job creation in the country. While the startup phenomenon has received prominence only in the last 2-3 years, it has in fact been active for almost a decade now.

Pune has seen a large share of successful startups especially in the IT/ITeS space, thanks to its well-entrenched Information Technology culture. E-commerce has been a particularly vibrant start-up market segment. Pune currently has over 330 startups in various stages of growth, and ecommerce has been a primary driver in many cases.

Startups are freshly-launched firms which are in their early stages of development, are usually small in size to begin with and get their launching financial boost from their founders.

If a startup has a service or business concept which is perceived to have good future market potential, it will invariably attract investments from other parties. In fact, the startup business model itself is based on a line of products or services which are either unique or are currently being under-serviced.

Pune has had the good fortune of seeing a good saturation of successful startups which have been attracting increasing investments. As these companies grow, they create increasing employment, concurrently leading to greater demand for office and retail spaces and, as a result, residential properties, as well.

On a national basis, ecommerce now accounts for between 2-3% of the total annual demand and absorption of office real estate, and this take-up is expected to grow significantly over the mid-to-long term.

Because of the countless success stories evinced by such firms in the country, the startup phenomenon has correctly been identified as a rich and potential-laden one by the Modi government.

Various schemes and incentives have been deployed to assist such firms, which is very necessary since the expenses incurred by startups are invariably much higher than the revenues they generate.

They require adequate financial assistance to see them through their ‘incubation’ period and are not always successful in attracting sufficient help from venture capital investors in the initial stages.

Apart from retail including ecommerce, the government is already providing assistance to start-ups in Information Technology, manufacturing, biotechnology and life sciences.

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Pune is an established destination for most of these market segments, which has resulted in the city becoming a preferred startup destination in the country. In fact, we have seen that a large number of Pune’s startups – a large number of them focused on ecommerce – which were launched a few years ago have now become medium-sized or large organizations.

Pune had already established itself as one of the country’s leading destinations for IT/ITeS and manufacturing companies over the years. With the startup revolution now also in full swing in the city, this erstwhile sleepy, laid-back neighbour to the financial capital of Mumbai has become an important focus point for investors from all over the country and beyond.

Demand for properties of all types is steady and growing, accounting for the fact that Pune’s property market has maintained its viability throughout the national slowdown in this sector.

The city’s startup culture is evident in the emerging commercial clusters, which still have good availability of cost-effective office properties from which such companies can launch operations.

Areas around Nagar Road have been among the leading recipients of demand from startups, leading to increased residential demand in areas like Dhanori and Charoli.

The Nagar Road area is already an established hotbed for IT companies and retail, with sub-markets like Dhanori and Charoli seeing additional demand from budget home seekers from Kharadi, Hinjewadi and the manufacturing belt in PCMC’s MIDC.

About The Author:

Arvind Jain is Managing Director of The Pride Group, a world-class property development conglomerate that is changing the cityscapes of Pune, Mumbai and Bangalore. Established in 1996, Pride Group has built and delivered over 10 million sq.ft. of constructed area. Pride Group has launched Pride World City, the 400-acre luxury mega-township at Charoli, Pune.

The Spill-over Effect: How New Real Estate Destinations Are Born

Arvind Jain1Arvind Jain, Managing Director – Pride Group

‘Spill-over demand’ and ‘spill-over effect’ are well-known terms among real estate investment professionals and market analysts. It is important to understand this fundamental, as it lies at the base of every real estate developer’s strategy and is also a key to successful property investment.

Essentially, the spill-over effect refers to the effect of specific events or series of events in one market segment, product line or locality on other segments, products or areas.

To give a readily comprehensible example, the fact that iPhones and iPads are exorbitantly priced had a direct correlation to the demand – and therefore supply – of lesser-priced smartphones and tablets which nevertheless deliver a very satisfactory consumer experience. These products benefit from the spill-over effect.

In real estate, the spill-over effect can be seen in the process of the demand for properties spreading into territories that adjoin locations which are approaching saturation both in terms of development potential and price growth.

Old Gives Way To New

Fundamentally, a location which previously worked well because of sufficient supply and therefore affordable property rates eventually loses its sheen.

Developers begin to find it unattractive because land for development has become scarce and expensive, and property buyers are put off by the higher real estate rates which builders have to quote to recover their increased capital investment. However, no area exists in solitary splendour and cannot hold on to a demand monopoly for long.

When certain locations reach their saturation point, there are always other locations close by which still present developers and buyers with the advantages that the ‘parent’ locality has lost.

Developers are able to obtain land at reasonable cost, allowing them to offer affordable properties to their buyers. Because the new location invariably offers comparable advantages to the saturated one in terms of proximity to important parts of the city, it attracts the new wave of demand from buyers who are drawn by the lower property rates. This is spill-over demand.

New Real Estate Precincts In Pune

Today, there are many ready examples of the spill-over phenomenon at work. In Pune, Wagholi absorbed the spill-over demand from Kharadi, while Dhanori was born of the spill-over demand from Viman Nagar.

Charoli, the most outstanding success story, emerged from the combined spill-over demand from Dhanori, Kharadi and Viman Nagar. IT-centric Baner came into the limelight because of the spill-over demand from Hinjewadi, while Wakad became a new real estate hotbed on the back the spill-over of demand from Baner. In all these cases, proactive infrastructure deployment supported the growth of the new precincts.

The Spill-over Effect In  Mumbai

In neighbouring Mumbai, areas like Mira-Bhayander, Vasai-Virar and Kalyan-Dombivali absorbed the spill-over demand from the MMR, which had become unaffordable to the largest part of the Island City’s residents. However, it was only with the creation of Navi Mumbai that the largest part of the spill-over demand from the parent city could be successfully absorbed.

Because CIDCO also provided a level of infrastructure which was unheard of in MMR, Navi Mumbai – particularly areas such as Vashi, Airoli, Ghansoli, Ulwe, Koparkhairne and CBD Belapur became an outstanding success.

As evidenced by the Navi Mumbai story, it takes more than just good juxtaposition to an established location to make a new real estate precinct work.

It needs to be enabled with support infrastructure such as roads, water and electricity supply and also facilities such as shopping, schools, hospitals and public transport that make living there possible. It is at this stage that the holistic development of the new location can and often does face delays.

In most emerging locations, the responsibility of providing these falls on the local development authorities and independent players such as shopkeepers, hospital operators and educational institutions.

The developers of residential projects themselves will usually absolve themselves of any burden of responsibility on this front, calling their job complete by having supplied the housing.

The city’s development authorities will eventually provide their share of infrastructure support because it is in the interest of the city’s growth. However, the other agencies required to make the newly emerging location viable will make an entry only when they see enough demand for their services.

This can lead to considerable delays in creating a good residential environment, which is why spill-over demand rarely suffices to make a new location work from the word go. In fact, it can take several years for an emerging area to match the desirability of the ‘parent’ location.

Pride World City in Charoli
Pride World City in Charoli

Integrated Townships As New Spill-over Catchments

This was a huge challenge in previous years, but many large developers with the right kind of capacity have now found a solution in the form of integrated townships. These massive projects encompass all the necessities of daily living within their unified development plan.

In other words, shopping malls, hospitals, schools and colleges are provided ‘in house’ by the developer. Residents of integrated townships are provided with a readymade lifestyle equation.

Because of their massive scale and scope, these townships also contribute significantly to the holistic growth of the city. Developers of such projects are therefore able to garner faster cooperation from the development authorities in terms of providing access roads, utilities supply, sanitation and law enforcement support.

The city of Pune has sterling examples of how integrated township developers have been able to harness the flow of spill-over demand into new ‘plug-and-play’ residential neighbourhoods which offer their occupants everything under a single ‘roof’.

While Magarpatta City and Amanora were the forerunners, Charoli has become the latest chapter of Pune’s integrated townships saga with a massive 400+ acre Mega City which has surpassed all its predecessors in ambition and scope.

As a rapidly growing city, Pune still stands at the cusp of real estate evolution – and with a tremendous wealth of outlying areas which can still be developed, its growth potential is virtually limitless.

Thanks to a multi-faceted economy being driven by Information Technology, industrial and automobile manufacturing, and the services sector, Pune will see the spill-over effect eventually transforming most of these areas into vibrant growth hubs. However, it is the locations which host integrated townships which will become the strongest contenders for real estate success in the years to come.

About The Author:

Arvind Jain is Managing Director of The Pride Group, a world-class property development conglomerate that is changing the cityscapes of Pune, Mumbai and Bangalore. Established in 1996, Pride Group has built and delivered over 10 million sq.ft. of constructed area. Pride Group has launched Pride World City, the 400-acre luxury mega-township at Charoli, Pune.

Home Buying Tips: What You Can And Cannot Compromise On

Arvind Jain1Arvind Jain, Managing Director – Pride Group

Compromising is something that we all hate to do, but the reality is that we have to compromise on something or the other every day, whether it is at home or at work or anywhere else.

This, unfortunately, holds true even when one is looking at buying a home – unless one is a shipping magnate, it is simply not possible to have everything when it comes to purchasing a residence.

Given that compromise on some of one’s expectations of a future home is inevitable for the common man, it is important to know where compromises can and shouldn’t be made.

The following compromises can be made while buying a home

  • Size of the property

A majority of home buyers give a lot of weightage to the size of the home they wish to buy. Specifically, the square footage and numbers of bedrooms and bathrooms are under focus in this respect.

When one maintains an uncompromising emphasis on size with no flexibility of budget, three aspects usually get adversely affected – the quality of the location, the quality of available amenities and the quality of construction.

None of these are factors on which one should ideally compromise. If there is no leeway in one’s budget, it is always advisable to invest in a smaller, well-located property which offers all the lifestyle accoutrements one requires.

  • Interior décor

There are two good reasons why most budget-bound property buyers prefer ‘bare shell’ flats to those which the developer offers with complete interior décor.

The first is obviously the price – fully outfitted apartments come at a significantly higher cost. The second is preference – home décor is a very individual concept for which there is no one-size-fits-all approach.

Home buyers look forward to appointing their property in a manner of their own choosing, not somebody else’s. Therefore, it is perfectly okay to compromise on interior décor except in the unlikely instance that such a flat meets both one’s budget and personal taste.

  • Size of kitchen and bathroom

To increase space in the living room and the bedroom, many developers today cut down on space in the kitchen and bathrooms.

Often, the kitchen may be open and merged with the living and dining area. One should ask oneself how much this matters if one is gaining on living space in the bargain.

This is, of course, strictly a matter of personal preference and needs. However, the size of the kitchen and bathroom can definitely be compromised upon if the need arises.

  • Size of the balconies

Again, balconies are not functional living spaces which do not play a very big role in the overall comfort experience of a home, or indeed places where one spends a lot of one’s time.

This is why balcony spaces are not counted as ‘livable’ area and are charged at a lower rate than the rest of the flat. The size of the balconies is something that can safely be compromised on if one is getting a property at an attractive rate.

  • Budget

Buying a property is an investment for a lifetime, and a home is the ultimate ‘performing’ asset which meets the most important needs of shelter, safety and comfort even as it appreciates in value.

As far as possible, one should be able and willing to be flexible in one’s budget, as many of the best options may be available for slightly higher prices.

If one finds a highly suitable and desirable property which is priced slightly beyond one’s budget, it makes sense to extend it via a marginally higher home loan or contribution from personal resources.

PWC Long Island 2

Compromises that should not be made while buying a home 

  • Location

Never ever compromise on the location of the property in any manner. Ensure that the area that you have chosen for buying a property is a safe and wholesome neighborhood and offers a good possibility for appreciation in the future.

Talk to local real estate agents and know about the chances of property appreciation in the location, and ensure that it has a low crime rate.

Also, make sure the location works for you on all relevant fronts – it should be near to or give good access to your place of work schools, healthcare facilities and banking and shopping facilities, and have good connectivity to the rest of the city.

  • Reputation and market standing of the builder

Usually, the property rates quoted by reputed, established developers are somewhat higher when compared with those of unknown builders. Remember that well-known builders have worked hard over many years to build their brand equity, so as to be known as strong players who deliver on their promises and offer superior homes with enhanced specifications.

It is always prudent to invest into this brand equity to safeguard one’s investment and benefit from a better living experience. Do not compromise on the reputation of the developer you patronize. You will have the corresponding assurance regarding the quality of construction, after sales support, the legal sanctity of the property and overall lifestyle experience.

  • Parking space

Maybe they were optional for many families in previous decades, but the availability of adequate parking space can no longer be compromised upon in a residential project.

Even if one does not currently own a car, the likelihood of buying one in the future is quite high. Even if one is not buying a home for personal use but to rent it out, a property without adequate parking ranks lowest on the rental desirability scale in any Indian city today. Never compromise on this aspect.

  • Healthy environment

Properties that are located right next to or close to highways or busy roads will face lots of noise as well as air pollution. Look for a property which as far away as possible from such pollution sources without being simultaneously cut off from the basic conveniences.

One should under no circumstances compromise on this, particularly if one has children and elderly people at home, as noise and air pollution will directly affect their as well as everyone else’s health.

It is for this reason that integrated townships have become so popular these days, as they – among many other advantages – offer the ultimate freedom from pollution.

As long as one pays heed to these important dos and don’ts, investment in a home will pay off in all respects. While compromise is certainly a fact of life in today’s world, it is equally true that everyone has the freedom of choice on what to compromise or not.

A home is a treasure for a lifetime, and buying one should be approached in such a manner that most of one’s expectations are fulfilled.

About The Author:
 
Arvind Jain is Managing Director of The Pride Group, a world-class property development conglomerate that is changing the cityscapes of Pune, Mumbai and Bangalore. Established in 1996, Pride Group has built and delivered over 10 million sq.ft. of constructed area. Pride Group has launched Pride World City, the 400-acre luxury mega-township at Charoli, Pune.

The Difference Between Real Estate Investment and Speculation

Arvind JainArvind Jain, Managing Director – Pride Group

In financial circles, the terms real estate investors and real estate speculators are used to refer to people who are buying property to make a profit, rather than for personal use. Though the two terms are often used interchangeably, they are not exactly the same. Nevertheless, even veteran financial specialists tend to get mixed up between the two.

In order to understand the difference between the real estate investor and the speculator, it is necessary to have a look at their methods of operation. A speculator predicts (or attempts to predict) the future return on any investment, and tends to be focused on short-term profits.

He or she is often not very well informed on how the asset class of real estate works in a particular locality. Since speculators are usually also active in other investment segments such as stocks, bonds and bullion, they tend to use the same approach for all asset classes. The general approach is to buy low and sell high in a very short period of time.

A real estate investor, on the other hand, makes a careful analysis of the current market position, market trends and related affecting factors so as to make an informed and forward-looking investment decision. Investors are not looking at short-term profitability, which is in any case not a viable objective to operate from in Indian real estate. While investors also tend to invest into other asset classes, they do not do so without fully understanding them.

real estate investorThe next question about the difference between speculators and investors would pertain to the returns they get. While a speculator may make a lot of money if he makes an accurate guess, all such returns are short lived. If the real estate market is facing a short-term decline, the speculator stands to lose all his money because he is also investing only for the short term. A related facet of real estate speculation is that it is, for the above reasons, not suitable for rental income generation.

An investors, however, is looking at healthy, steady returns on capital appreciation and rental income. For this reason, he maintains a reasonable investment horizon which is tailored to the market dynamics of this particular asset class. This is important because Indian real estate is subject to cyclical ups and downs.

A property cycle is dictated by various factors related to population growth, GDP, policy framework and sentiment, and boom and slump periods are more or less a given. Indian property investors aim to ride through the predictable ups and downs of this cycle. To do so they must remain invested for a period of at least 5-7 years.

Another reason why a longer investment horizon is important is that most investors look at buying properties at a lower rate at new locations in anticipation of the demand to come. For this to bear fruit, they must give these locations sufficient time to receive basic infrastructure and spillover demand from adjoining areas.

Long-term investments made by property investors provide stable and reliable returns. Investors are not prone to losing their money due to a receding market, because they have made a more careful analysis of the market condition and are willing to wait till their expected results are delivered as per the market data before they make their move.

As Robert Kiyosaki puts it ‘Real estate investing, even on a very small scale, remains a tried and true means of building an individual’s cash flow and wealth.’ Also, real estate is by far the ultimate asset since it not only grows in value but also performs as a rental income generator. But it must always be approached from an investor’s perspective rather than from speculative objectives.

The Benefits Of Green Open Spaces In Integrated Townships

Arvind Jain1Arvind Jain, Managing Director – Pride Group

India is witnessing an upsurge in the demand for homes in well-developed townships due to the challenges that ever-increasing urbanization is placing on the quality of life in the cramped city centers and suburbs. Many of India’s metros and other large cities have seen an unprecedented level of saturation, and integrated townships lend themselves as the logical solution to home seekers.

Township developments, which tend to happen on the outskirt of our cities, provide not only affordability but the kind of convenient, healthy and secure lifestyle which have long since become history in our larger cities.

In the midst or rather on the fringes of the unfolding urban chaos, integrated townships provide the kind of enabled and secure lifestyle that urban dwellers yearn for, yet are unable to access in normal residential developments.

While eliminating the filth and chaos of city life, townships simultaneously provide every quintessential need of modern living, including schools, departmental stores and shopping malls, hospitals and places for leisure and entertainment within a convenient distance.

Apart from the affordability factor, there is another important reason why integrated townships are developed on the outskirts of cities. One of the USPs of such developments is the generous availability of open spaces, which one cannot hope for living in an overpopulated city where hardly any spaces are left undeveloped.

The crass commercialization of real estate development demands that every available square inch in a city be consumed by concrete – be it in the form of residential and commercial buildings or roads.

Integrated townships, on the other hand, offer their residents open spaces in the form of parks and gardens, jogging tracks, children’s playgrounds and a lot more. Fresh air flows freely, greenery abounds and people are no longer locked into concrete jungles. This characteristic of open spaces is about a lot more than just aesthetics and brings a number of social and economic benefits, as well.

The Benefits Of Green Open Spaces

There are many benefits of having abundant open spaces in a residential area apart from the bracing, healthy lifestyle they provide – it is about a lot more than recreation. Green, open spaces also provide the ideal means for ground water recharging, rainwater harvesting and setting up solar panels to generate uninterrupted sustainable energy.

The proven medical benefits of green open spaces also mean lower healthcare bills for residents, apart from the fact that both and elders and children live more vigorous and therefore happier lives. All these factors result in the exclusive and highly desirable characteristics of integrated townships, which directly boost the valuation of properties on the real estate market.

Many upcoming regions around cities like Pune are now seeing township developments that keep the importance of open spaces in mind. While residential buildings within these townships are developed vertically so as to maximize space and keep the apartments affordable, green open spaces are always a central concept.

Open Spaces Charoli Township
Pride World City

How Open Spaces Affect Property Values

There are abundant market studies which underscore the fact that urban dwellers are attracted to residential areas and projects that have large areas dedicated to open spaces – spaces where no development will occur at any point in the future. Given the health hazards and inconveniences of our increasingly polluted cities, people want alternatives that allow them to get closer to nature.

The option to move away from the inner city and suburban crowds, live in a greener environment and provide their children, elders and themselves a happier lifestyle involves a premium that people are more than willing to pay.

In an integrated township, flats that have access to open ventilation and possibly face any recreational open space are in highest demand. The property values also tend to differ from floor to floor, with lower floors carrying a premium over the ones above them. For those who prefer duplexes or bungalows, the distance from open recreational spaces will determine, more or less, how much people are willing to pay.

Generally, a community with a larger number of open spaces or recreational amenities is seen to have higher property values than its neighboring societies.

Perfect Planning Is The Key To Success In An Integrated Township

This is why not all integrated townships are created equally. Expert planning at the design stage itself can ensure that all residential buildings have equal access to green open spaces.

Lack of such planning will create gross variations in the demand for and therefore pricing of residential spaces in different buildings and even within the same building. If a township is planned thoroughly, keeping in mind that every resident expects to have reasonable access to green open spaces, then the entire project is guaranteed to succeed.

Unfortunately, some of the earliest integrated townships in cities like Pune were not planned with this all-important factor in mind. Contemporary township developers have the advantage of informed hindsight on the mistakes which earlier players committed, and the opportunity to avoid them.

What this means for families who are determined to make the township lifestyle their own is that careful evaluation is of utmost importance. Even in the early construction stages, intending buyers can identify whether or not an integrated township provides an acceptable and desirable level of access to open spaces by studying the project layout.

As in all areas of the real estate market, knowledge is the key to making the right choices and ensuring that one’s property investment brings with it the hoped-for returns – both in terms of investment value and in lifestyle benefits.

About The Author:

Arvind Jain is Managing Director of The Pride Group, a world-class property development conglomerate that is changing the cityscapes of Pune, Mumbai and Bangalore. Established in 1996, Pride Group has built and delivered over 10 million sq.ft. of constructed area. Pride Group has launched Pride World City, the 400-acre luxury mega-township at Charoli, Pune.

Closing The Budget Housing Gap In India

Arvind Jain1Arvind Jain, Managing Director – Pride Group

As per rough estimates, the Indian housing market is short of as many as 19 million homes. That’s a lot better than the figure of 24 million that held true just five years ago.

After the obvious deficit of affordable housing for the LIG and EWS groups, what is most striking is the low availability of budget housing projects that fall in the price range of Rs. 40-55 lakh in urban areas. This is the budget range that pertains to the largest part of the rapidly growing Indian middle class.

It is high time that the Indian residential real estate sector focuses more on the supply of budget homes.  Indian developers tend to focus only on housing for the higher income groups whenever there is an uptick in the economy.

The demand has supply trends for the last decade have thus been anything but supportive to the cause of affordable housing for the Indian middle class. It is no accident that the mid-income housing segment is the most important customer base of housing finance companies.

A vital step in fast-pacing the budget housing pipeline is more encouraging institutional funding. With the potential rate of return being as high as 25%, investment into budget housing projects offers excellent incentives for institutional funders.

However, given India’s abysmal track record for transparency in the past, such funds will always seek the security and sustainability of developers having a good reputation.

Pune township

The challenges for budget housing

While there is huge demand and opportunity attached to budget housing projects, they also come with a unique set of challenges. For one, there is the ongoing lack of speed in project approval process.

Though much has been promised by the Government on this front, the fact is that there is still a huge bottleneck of pending approval for housing projects. Also, most of our larger cities suffer from a lack of good support infrastructure in emerging locations.

In fact, building infrastructure to connect adjacent geographies to the prime city centres is by far the most viable solution to accommodating a proliferating population.

The reason for the snail’s pace at which support infrastructure is being deployed in emerging locations is the fact that it is a time-consuming process. City planners must undertake detailed feasibility studies before launching large infrastructure projects.

We have seen that major infrastructure projects in India take anywhere between 5-15 years to complete. Nevertheless, building infrastructure in peripheral locations is the primary tool in the hands of our city planning authorities to ensure that more citizens have access to budget housing.

Developing roads to connect adjacent geographies to the prime city centres is by far the most logical and sustainable way to ensure the holistic growth of a city, and to keep real estate costs within the reach of the middle class.

In some cases, city planning authorities have indeed been proactive in fast-tracking such vital road infrastructure. In Pune, the upcoming Ring Road will inter-connect key thoroughfares like the Pune-Nashik, Mumbai-Pune-Solapur, Pune-Ahmednagar and Pune-Satara highways and decongest traffic loads on the roads connecting Pune and the Pimpri Chinchwad Municipal Corporation (PCMC).

As a result, areas such as Charoli (which already benefits from its proximity to Pune Airport, Nagar Road and the manufacturing and IT hubs of the city) have become the new havens for budget housing seekers.

Another hurdle on the road to better budget housing availability is the presence of too many fly-by-night players in this segment – it tends to discourage large-scale FDI funding.

This has been the top reason why institutional funding requires so much time to identify its preferred plays in the Indian budget housing market. Also, the profit margins have been and will remain thin in projects where developers limit themselves to a small number of units.

Significant returns on investment in budget housing are only available in projects with a sufficiently large number of units. Such projects require the financial and technical abilities of large national players.

This is the primary reason why massive integrated townships with an adequate supply of budget housing see the maximum investment from foreign investors and funds.

Large integrated townships bring another key to deciphering the budget housing problem to the table – they help reduce the impact of high land prices on end-users.

While developers of smaller projects must spread this cost over a much smaller number of buyers, developers of large integrated townships are able to pass on the economies of scale to their buyers and simultaneously provide superior amenities and more green open spaces.

About The Author:

Arvind Jain is Managing Director of The Pride Group, a world-class property development conglomerate that is changing the cityscapes of Pune, Mumbai and Bangalore. Established in 1996, Pride Group has built and delivered over 10 million sq.ft. of constructed area. Pride Group has recently launched Pride World City, the 400-acre luxury mega-township at Charoli, Pune.

Property Investment Basics: How To Get Them Right

Arvind Jain1Arvind Jain, Managing Director – Pride Group

Real estate investment is reputed to be something only experts at the game should play at. Nothing could be further from the truth.

Unlike stocks, residential real estate is an investment asset class that is quite predictable and very familiar. In fact, anyone who has ever bought or even rented a home will know instinctively what kind of home will work as an investment.

Location Value

The term ‘location, location, location’ is a very familiar one, and it is the time-tested maxim behind every successful property investment.

When making an investment in a residential property purely for capital appreciation, it is imperative to consider the location and surroundings of the project.

It is the location and its immediate surroundings that determine how the area will develop in the time it takes for under-construction projects to become ready for possession.

To understand how the location factor drives consumer demand for properties, the investor should assume the role of an end-user of the property in question.

For a home to work, it is essential to consider distance and accessibility to workplaces and social infrastructure such as shopping malls, neighbourhood shopping arcades, parks, etc.

Road connectivity and infrastructure such as power, water and safety and security parameters must also to be considered alongside.

Developer’s Reputation

Another familiar maxim of residential real estate investment in India is that the developer’s track record should be considered. In fact, this aspect cannot be repeated often enough, and its importance must not be under-estimated.

When contemplating investment into an under-construction project, the developer’s performance with regards to past projects, quality of finished projects, attendance to consumer complaints and timely delivery must be verified.

Also, on-going projects, sales in the project under consideration and status of statutory approvals should be considered.

While it is not unusual for projects to be granted some pending permissions and approvals only further down the line, not all developers are able – or even willing – to complete the approvals process.

Many developers with little or no past experience in the real estate business simply abandoned this process once their projects began selling. Thankfully, with the Real Estate Regulatory Bill now an enforceable Act, we will see this breed of unscrupulous builders being weeded out.

Nevertheless, it must be kept in mind that with reputed developers, obtaining all necessary approvals is firmly wired into their business culture. They have better relationships with the approval authorities and are able to see this vital process through with a minimum of fuss and delay.

india real estate sales

Taxation

No property investor – especially not one who is investing for capital appreciation rather than rental income – should be ignorant about how capital gains taxation works in residential property sales.

Long-term capital gains are calculated for the sale of a property held for more than three years. When long-term capital gains made by the sale of housing property are invested in another house property, the amount invested in the new asset is exempt from capital gains tax.

The new property must be purchased one year before the transfer of the first house, or within two years after the sale. Deduction is also available in case one wants to construct the house or invest in an under-construction property, if in both cases construction is completed within three years of sale of the original property.

The sale of any property within three years of its purchase will mean that that the seller has to pay short-term capital gains tax, which is taxed after being added to the taxable income for that year.

In case of a short-term loss, the same can be set off against short-term or long-term gain in the same year. Else, the loss can be carried forward for a duration of eight successive financial years.

Quick Reference Guidelines

  • A cheap property is not necessarily good investment. This may hold true in low-cost emerging locations which will grow in the future, but larger homes with better specifications tend to perform better in already developed areas
  • Freebies do not necessarily mean a good bargain. Check the developer’s track record and delivery timelines.
  • Give preference to properties in integrated townships, as these will attract the bulk of demand from home buyers in the future
  • Due diligence as to project approvals and land acquisition must be done to the best of one’s capability.
  • Read the agreement’s fine print related to sale of the property.
  • Take a long-term perspective on property investment to get the most capital appreciation. Look to sell just before possession.
  • Invest in projects/property markets where an active secondary market exists or is possible.

About The Author:

Arvind Jain is Managing Director of The Pride Group, a world-class property development conglomerate that is changing the cityscapes of Pune, Mumbai and Bangalore. Established in 1996, Pride Group has built and delivered over 10 million sq.ft. of constructed area. Pride Group has launched Pride World City, the 400-acre luxury mega-township at Charoli, Pune.

Smart Homes Market In India And The Factors Driving Its Growth

Arvind Jain1Arvind Jain, Managing Director – Pride Group

Smart homes are a major step on the evolutionary ladder for residential spaces, and their primary aim is to make living more comfortable, convenient, secure, entertaining and sustainable. Powered by gadgets and computing technologies, smart homes were the prerogative of the very rich in the past – but no more.

Today, smart home technologies have become affordable and every other average household uses some form of smart home automation or the other.

Smart home as an end product from developers are also drawing more and more buyers in urban India. In integrated townships, smart home features are an expected advantage and considered a desirable part of the overall product offering.

Thanks to constant technological advancements, smart homes are also becoming ‘smarter’ with every passing year. Just a few years ago, smart Indian homes were primarily marketed as homes with advanced security features like cameras, smart door locking systems and similar surveillance.

Today, the implications have expanded to include electronically enabled lighting systems, fire detection systems, gas leakage detection, energy efficiency monitoring, entertainment systems, etc.

Increasing Acceptance

In India, the market for smart homes has been growing steadily. Every year, the uptake of smart homes in India is increasing by between 15-18% in tier 1 cities and by between 5-10% in tier 2 and tier 3 cities.

This dynamic has especially been driven by the increase in the number of working couples with dual incomes in metro cities. With both spouses working, a family is financially capable of opting for a smart home, which do cost a bit more than homes without smart features.

In particular, home automation is regarded as a desirable solution to keep homes safe while they are not occupied – either during the day when the inhabitants are at work, or for extended periods when they are vacationing.

Smart surveillance features also allow the safety of children and elderly people to be monitored remotely via smartphone apps. In integrated townships, the smart security features must be integrated with the larger security measures at the project level.

Thanks to deeper internet penetration and the rising concerns about home security amid the ever-escalating crime rates in our cities, most potential home buyers today are aware of the smart home concept.

While this awareness is slightly lower in non-metro cities, the overall predisposition to this product is quite positive. In upper segment homes, smart home features are the norm rather than an exception – and, as already mentioned, homes in integrated townships are considered de rigueur.

Smart Homes in India

The Most Popular Features in Indian Smart Homes

  • Security – Video door monitoring, motion sensors, gas leakage detection, Intrusion sensors, curtain sensors, fire detection and control
  • Lighting control – remote on/off, presence detection
  • Electrical – Smart air conditioning, smart refrigerators
  • Entertainment – AV controls, gaming consoles
  • Communication – GPS navigation connected to entry and exit, proximity door unlocking

For the average Indian buyer of a smart home, the unit home must above all include electronic security features. Energy efficiency is another aspect that is becoming increasingly popular among home buyers.

People are willing to spend more for a smart AC, Smart TV or a smart refrigerator. However, advanced security has been the main driver. In India, the barriers to large-scale acceptance of smart homes are crumbling. However, there are still some factors that hinder mass acceptance:

  • Cost – Smart technology-enabled homes cost more
  • Lower awareness – the older generation of home buyers are still not completely confident of the advantages of smart home features

Most Indian customers expect that smart technologies will add to the security of living in some way of the other; if it does not, the offering is close to unacceptable. Things like AC control or smart gadgets are considered desirable, but not an absolute necessity.

The demand for technologies like video conferencing, communication across floors or even curtain control are largely limited to commercial spaces and are not yet a big factor in smart residential units in India.

While average Indian home buyers are positive to the idea of a smart home, they are willing to spend no more than 1-3% extra for a home featuring smart solutions. The upper-income groups extend the premium acceptance to 5-8%; which, it must be stated, is still low when seen in the light of the overall benefits available in smart homes.

Yet, things are definitely looking up in this space – awareness and acceptance levels are increasing, and in the near future, we will be getting closer to smart homes becoming the default choice for home buyers.

About The Author:

Arvind Jain is Managing Director of The Pride Group, a world-class property development conglomerate that is changing the cityscapes of Pune, Mumbai and Bangalore. Established in 1996, Pride Group has built and delivered over 10 million sq.ft. of constructed area. Pride Group has launched Pride World City, the 400-acre luxury mega-township at Charoli, Pune.