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Pune Residential Market Review
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Pune Property - Real Estate Market Review

Aug 23, 2014

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Pune Property Market Review - Residential Property market with analysis of segments.
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Page 1: Pune Property - Real Estate Market Review

Pune Residential Market Review

Page 2: Pune Property - Real Estate Market Review

PUNE CITY OVERVIEWPUNE CITY OVERVIEW

Page 3: Pune Property - Real Estate Market Review

Pune City

Surrounded by the Sahyadri Mountains of the Western Ghats, Pune sits at the confluence

of the Mula and Mutha Rivers. Dubbed once as the Oxford of the East, on account of its

reputed academic institutions, it is perhaps today more than that – a repository of

Maharashtrian culture, a preferred destination for automobile manufacturers, a haven

for Information Technology professionals and Maharashtra’s answer to Bangalore!

A mere 150 km east of its glamourous sister city Mumbai, Pune is the perfect foil to it –

lush surroundings, imposing hills, green valleys, clear rivers, a relaxed pace of life and yet

the seductive appeal and glitter of a large metropolis.

Page 4: Pune Property - Real Estate Market Review

MAPPING PUNE RESIDENTIAL MARKETMAPPING PUNE RESIDENTIAL MARKET

Page 5: Pune Property - Real Estate Market Review

Zone Major Areas

Central PuneBund garden Road,Koregaon Park,Model Colony,Deccan, Shivaji

Nagar, Kothrud, Swargate

Northern Pune Pimpri, Chinchward,Moshi,Nigdi,Dighi

Southern Pune Katraj,Warje, NIBM, Kondhwa, Undri

Eastern Pune Yerwada,Kalyani Nagar,Viman Nagar,Wagholi,HadapsarEastern Pune Yerwada,Kalyani Nagar,Viman Nagar,Wagholi,Hadapsar

Western Pune Aundh,Baner,Pashan,Bavdhan,Wakad,Balewadi,Hinjewadi,Ravet

Page 6: Pune Property - Real Estate Market Review

Average Price Per Sqft for Residential Properties in Pune

Page 7: Pune Property - Real Estate Market Review

There is ample supply of residential properties in Pune, however because

of strong investor demand prices are expected to rise gradually

42,637

33,104

20,443

38,80940,452

33,155

15000

20000

25000

30000

35000

40000

45000

Residential Launches in 2012 has been lower than 2010- 2011 as market remain busy absorbing

inventory created from 2010 launches. Residential real estate prices in Pune are expected to continue

their upward momentum owing to increasing input costs to the builders, coupled with increased investor

demand from the peripheral areas of Pune and from the NRIs.

0

5000

10000

2007 2008 2009 2010 2011 2012

Residential Property Launches

Page 8: Pune Property - Real Estate Market Review

Supply – Demand Situation of Pune Residential Market

Pune residential market has historically been an end-user driven market which has ensured minimal price

volatility. However, 2007 onwards investor participation has witnessed an increasing trend with local investors

as well as those from Mumbai buying properties in the peripheral areas. This is despite the fact that most of the

developers discourage investor participation by restricting re-sale before possession.

Page 9: Pune Property - Real Estate Market Review

Drivers of Pune Residential MarketDrivers of Pune Residential Market

Page 10: Pune Property - Real Estate Market Review

IT Industry as growth driver for Pune residential market

Increasing growth of IT /ITeS industry has provided strong growth in job opportunities in

past few years, leading to higher per capita income in Pune compared with average for

Maharastra

Page 11: Pune Property - Real Estate Market Review

Infrastructure development in the city is also supporting growth

Page 12: Pune Property - Real Estate Market Review

Infrastructure development in the city is also supporting growth

Page 13: Pune Property - Real Estate Market Review

Pune has estimated - 500 builders of which 296

builders are registered with CREDAI

Builders are bound by code of ethics to

promote highest standard of promotion,

Builders in Pune

promote highest standard of promotion,

development and construction activities

Applicable FSI in the PMC and PCMC limits is

1.0. In addition a TDR of 0.6 is given for PMC

and 0.4 for PCMC area.

Page 14: Pune Property - Real Estate Market Review

Regional AnalysisRegional Analysis

Page 15: Pune Property - Real Estate Market Review

Central Pune Summary

• Prabhat Road is named after the Prabhat Studio which is located at the beginning of

the road viz. is one of the primary arteries of the Deccan Gymkhana area. This road

connects the Law College Road to the Karve Road. The area is primarily residential,

however the Deccan Gymkhana area is fast developing into a business district and

hence the presence of a number of offices too on this road.

• Land availability in the central city is limited and traditional residential areas like • Land availability in the central city is limited and traditional residential areas like

Prabhat Road and Bhandarkar Road have very few locations suitable for the

development of residential real estate.

• As compared to other regions in Pune, there are no major residential developments

other than standalone buildings in this part of Pune. Though there are maximum

hospitals, Government Offices and Courts in the vicinity.

• Pinnacle Group, Alliance Group, Rachana developers, Javadekar developers,Oxford

Properties and Marvel Realtors are some of the prominent developers in Central Pune.

Page 16: Pune Property - Real Estate Market Review

CENTRAL PUNE – Growth Drivers

• Shivaji Nagar is close to Pune Railway Station and houses corporates such as L & T

Infotech and institutes such as Indian Institute of Planning and Management.

• Deccan is a cultural district and houses many art galleries, theaters and cinema halls.

Deccan also is an educational hub of Pune, comprises of the areas of J. M. Road, F. C.

Road, University Road, Law College Road and Senapati Bapat Road.

• J. M. Road and F. C. Road are the most prominent high streets of Pune with prominent

retail players vying for this micromarket.

Page 17: Pune Property - Real Estate Market Review

Western Pune Summary

• Prominent areas in Western Pune included Aundh, Sindh Society, National Society, Parihar Chowk,

Anand Park, Ashiyana Park,Gaikwad Nagar amongst many.

• Aundh is a bustling location and has emerged as one of Pune's up-market areas. An improved road

network has enhanced its connectivity with the central parts of Pune. Paud Road and Kothrud are

traditional Maharashtrian localities and draw a similar clientèle. Kothrud has expanded till Warje on

Karve Road and till Chandani Chowk in Paud Road. Baner is an extension of Aundh and has very Karve Road and till Chandani Chowk in Paud Road. Baner is an extension of Aundh and has very

good proximity to Pune-Bangalore Highway. Baner has become a popular destination amongst

those who desire to be near the Aundh area but prefer a more affordable option and also emerged

as an IT hub of Pune.

• Hijewadi, started in 1998, has ushered the IT growth in Pune. Prominent IT players like Infosys,

TCS, Wipro, IBM have set up their centres at Hinjewadi. It is one of the growth corridors of the west

region of Pune.

• Gera, Kumar Properties, Kolte Patil, Aditya Builders, GK Developers, Nyati, Paranjpe, Pride Purple,

Vascon, and Wadhwani Constructions are some of the prominent developers in West Pune.

Page 18: Pune Property - Real Estate Market Review

WESTERN PUNE – Growth Drivers

• Proximity to Rajiv Gandhi Infotech Park, Hinjewadi and the Mumbai-Bangalore by-pass

has boosted real estate activity in this area, seen by many as one of the future key

growth areas.

• Aundh has witnessed a lot of development in the past one year, with a large number of

shopping centers and supermarkets like Ozone Reliance Mart, Croma etc.The

residential rates in this area have been driven up by the huge demand coming from IT

professionals as well as migrants from various parts of the country, its close proximity

to the Mumbai-Pune express way and superb connectivity to Shivaji nagar, make it to the Mumbai-Pune express way and superb connectivity to Shivaji nagar, make it

more preferable to reside than other parts of the city.

• Pashan and Baner are situated in the vicinity of the IT Park at Hinjewadi and the

Mumbai-Bangalore Highway.

• Good transaction of residential houses are witnessed in Kothrud for its good

infrastructure and cultural heritage.

• Residential demand in the region to witness strong growth in areas like Baner, Wakad

and Hinjewadi owing to the proximity to the IT belt and Mumbai-Bangalore Highway.

• Investors from Mumbai are also interested in buying property in Hinjewadi on account

of easy access from the Mumbai-Pune Expressway.

Page 19: Pune Property - Real Estate Market Review

Eastern Pune Market

• Over the last few years Viman Nagar and Kalyani Nagar has become one of the finest

locations in Pune with many exclusive and luxurious residential projects, IT parks,

hotels and educational institutes. It is well connected to the central area of Pune.

• Major retail development is witnessed in East Pune. Phoenix Market city, Amanora,

Inorbit Mall, Koregaon Park Plaza and G Corp Pulse Mall to name a few are located

here.

• Hadapsar and Kharadi have emerged as preferred locations for the IT/ITES sector.

These locations serve not only as hubs for IT activities but are also preferred These locations serve not only as hubs for IT activities but are also preferred

residential destinations promoting the 'walk to work' culture which is fast becoming

popular.

• Wagholi though being outside city limits, is a warehousing and Industrial hub of East

Pune and has witnessed major real estate movement owing to affordability factor and

land availability.

• Due to its proximity to Koregaon Park and Kalyani Nagar, Mundhwa has also

experienced good development in the last few years.

• Prominent developers in this region include Marvel, Kolte Patil, Goel Ganga, Kumar

Builders, Panchshil, Nyati, Vascon and Brahma

Page 20: Pune Property - Real Estate Market Review

EASTERN PUNE – Growth Drivers

• Viman Nagar is preffered location due to its proximity to airport and improved

connectivity to the city.

• Kalyani Nagar, located in the vicinity of upscale neighborhoods like Koregaon Park,

Boat Club Road and Mangaldas Road, is the next prime location though has limited

scope for future residential development.

• Mundhwa offers a good mix of cosmopolitan crowd and is also close to Koregaon park

and M G Road in Camp.

• Widening of Nagar Road improved the connectivity and led to higher office space

demand in the Eastern Corridor.

• Kharadi and Hadapsar, are strategically located towards the east of the city close to

the airport and railway station, also a gateway to Pune via the Nagar Road and

Solapur Road respectively.

Page 21: Pune Property - Real Estate Market Review

North Pune Summary

• The main localities in North Pune are Chinchwad, Pimpri, Nigdi, Akurdi, Kalewadi and

Bhosari. It lies on the Pune-Mumbai highway (NH 4). Pimpri Chinchwad is a major

industrial hub and one of the the biggest industrial zones in Asia.

• Nigdi is a suburb of Pune, which is about 18 km from Pune Station on the old Mumbai-

Pune Highway.

• P.C.N.T.D.A. (Pimpri Chinchwad New Township Development Area), which is also • P.C.N.T.D.A. (Pimpri Chinchwad New Township Development Area), which is also

known as Pradhikaran is a planned township. This total area is divided into several

sectors.

• Akurdi Railway Station of Pune Suburban Railway is in Nigdi Pradhikaran. Nigdi is well

connected to Pune City by buses leaving from Nigdi Bus terminal of Pune Mahanagar

Parivahan Mahamandal Limited.

• Mindspace Realty, Naiknavare, Namrata Dev and Goel Ganga are some of the

prominent developers in North Pune.

Page 22: Pune Property - Real Estate Market Review

NORTH PUNE – Growth Drivers

• Accessibility to the Technology Park (Talawade), IT sector (Hinjewadi) and other

industrial areas (Talegaon, PCMC) will propel the real estate growth in Pimpri-

Chinchwad.

• Excellent infrastructure and connectivity to Central Pune are the key positives of this

area.

• Ravet also witnessed major developments due to its affordability and project launches.

Page 23: Pune Property - Real Estate Market Review

South Pune Summary

• Sinhagad Road houses the Institute of Armament Technology (IAT) and the Sinhagad

Institute.The road further leads to the base of the famous Sinhagad Fort.

• Mohammadwadi, surrounded by hills with scenic beauty, has beautiful bungalows.

• Kondhwa has evolved as an important residential area in the recent past. While the

area towards Katraj is developing as a low cost housing destination, with the budget

factor weighing in more here, the area towards Wanowrie and NIBM is becoming a

preferred location for premium housing.

• Major builder in this area D.S.K, Nyati, Kumar Properties, Marvel, Kolte

Page 24: Pune Property - Real Estate Market Review

SOUTH PUNE – Growth Drivers

• With the Bangalore Bypass and the Expressway running alongside, Ambegaon has acquired

a new facet. Ambegaon is strategically located and has excellent accessibility from Katraj,

Sinhagad Road and Kothrud.

• As Kothrud in West Pune has become a premium location, customers have started moving

towards Sinhagad Road and Ambegaon area.

• Property price of Sinhagad Road has been witnessing an upward trend due to the demand

spilling from Kothrud which has a scarcity of land parcels.

• Katraj has some good educational institutes like the Bharti Vidyapeeth Dental College and

Rajiv Gandhi Institute of IT and Biotechnology.

• Undri, Pisoli has been witnessing major real estate activity owing to availability of land

parcel,best schools and International Institutions (DPS, Vibgyor) and hospitals (Inamdar

Hospital , Ruby Hall).

• Apartment buyers are showing a greater preference for NIBM, Kondhwa and Lullanagar

where development is planned, open land exists, and water supply is better. Moreover, it

offers excellent connectivity to M G Road and Magarpatta.

Page 25: Pune Property - Real Estate Market Review

Market InsightsMarket Insights

Page 26: Pune Property - Real Estate Market Review

North West Pune – Increasing Supply

North-West region accounts for highest share of supply at 45 % - main region being PCMC

and IT hub of Hinjewadi. The region has low vacancy level at 19% due to growth in new

residential areas with upcoming IT locations. Saturation of residential area in the existing

IT belts will lead to development of areas with better connectivity and proximity to offices -

Residential demand in the region to see strong growth in regions like Baner and Wakad.

Page 27: Pune Property - Real Estate Market Review

Western and Eastern Pune will remain hot for property Investment

• Over the years, the IT/ITeS sector has emerged the largest employer in Pune and

reshaped its real estate market. The setting up of Rajiv Gandhi Infotech Park in

Hinjewadi resulted in companies such as Infosys, Wipro, TCS and Tech Mahindra

establishing their global delivery centres here. In the next 5 years Hinjewadi is going to

develop as India's largest office hub. Prefernce of employees staying closer to work

and given high prices in Central Pune region will lead to increase in rates in adjacent

areas such as Baner, Balewadi, Ravet and Bavdhan. Wakad has already emerged as

preferred destination for people working there.

• East Pune is being largely driven by the CBDs in Kharadi, Viman Nagar, Magarpatta

Cyber City and Kalyani Nagar. A mix of BFSI, IT and BPO industries is present in this

section of the city.

Page 28: Pune Property - Real Estate Market Review

There is an increasing tendency among

investors to draw a clear demarcation

between East and West Pune while

investing, with regards to where they can

expect better returns.

However, Western Pune is the

preferred investor destination

expect better returns.

West Pune is preferred over other zones.

Although in terms of social infrastructure

West Pune still lags; we expect this gap to

be filled up rapidly in the coming years. A

large number of educational institutes,

organized retail and entertainment avenues

are expected to become operational here in

next 5 years.

Page 29: Pune Property - Real Estate Market Review

Demand for 2 BHK will be strongest

As Pune is emerging as an IT hub, and most

of the working crowd is predominantly

between the age bracket of 25-35 years. This

is a stage in life when working professionals

start a family. start a family.

The requirement is predominantly of a 2BHK,

as the family comprises of a husband, wife

and one or two kids.

Moreover, double income families can be

expected as a substantial part of the IT-BPO

workforce comprises of women. This dual

income makes this configuration affordable.

Page 30: Pune Property - Real Estate Market Review

Pune residential market has historically

been an end-user driven market which

has ensured minimal price volatility.

However, 2007 onwards investor

Pune Market is changing to

Investors market

However, 2007 onwards investor

participation has witnessed an increasing

trend with local investors as well as those

from Mumbai buying properties in the

peripheral areas. This is despite the fact

that most of the developers discourage

investor participation by restricting re-

sale before possession.

Page 31: Pune Property - Real Estate Market Review

Changing Northern Pune Market

North Pune, where majority of the existing manufacturing plants are located, will benefit

from the growth in the Auto & Auto Ancillary sector. However, the impact of this will be

limited as no new units are being set up here due to the paucity of large vacant land

parcels and high cost of existing land.

The attractiveness of Pimpri Chinchwad as the manufacturing hub is slowly fading out, with

many companies shifting their units to alternate cheaper locations. Most of the new

manufacturing plants are coming up along the periphery of Pune like Chakan and

Ranjangaon which are located 32 km. and 50 km. away from the city centre respectively.

Hence, no significant benefit of incremental employment will be felt on North Pune.

Page 32: Pune Property - Real Estate Market Review

South and Central Pune will see lower appreciation of rates

South Pune is not expected to gain in the residential market, as it is primarily dependent

on East and West Pune where most of the employment hubs are located. Additionally,

prices here are equivalent to most of the emerging destinations of East and West Pune

leaving little room for further appreciation.

Central Pune locations like Apte Road, Bhosle Nagar, Deccan, Model Colony, Prabhat

Nagar and Shivajinagar are witnessing a lot of redevelopment projects. Land is scarce in

these areas. Moreover, builders are constructing stand-alone luxury units (above INR 1

crore) and this location commands an address premium, however in terms of returns it will

be limited.

Page 33: Pune Property - Real Estate Market Review

Flatons Advisors

3, Alpha Building

Lane no 12

Kalyani Nagar,

PunePune

Tel: 020 41 2040 60

E : [email protected]

W: http://www.flatons.com