05.17.06
Pune’s real estate phenomenon
Business is looking up in Pune, and for the realty market, that is great news.
Pune is witnessing an IT boom. Also there have been as many as 128 manufacturing proposals from new medium and large-scale players wanting to set up their operations in Pune. Players like Cognizant, Infosys, Wipro, Kanbay, Persistent Systems(PSPL), KPIT are all major players located in Pune. These are again, just a few names.
With the influx of companies and people, infrastructure is hugely strained. Add to this the growing number of educational institutes. And then you have still more people. Many new businesses and malls have come up to meet the needs of this ever growing population. The buying power of the people coming in is substantial and this has resulted in rents, leases and real estate prices popping up and up, with no real sign of abating. Thankfully prices are rising steadily and the real estate trend does not look like a bubble. Getting bank loans is now very easy for salaried professionals. Unfortunately so is getting vehicle loans and the roads are clogged with two and four wheelers that are a huge burden on the infrastructure, which is at breaking point. Pune has the largest two wheeler population in India. Lack of a good public transport system is the main cause here for the problem.
Coming to rents. Rents in areas such as Camp, Kalyaninagar, Shivajinagar, Wakdewadi, Deccan, F.C. Road, J.M. Road, and Nagar Road are among the highest in the city and lease rates for retail spaces have increased by nearly 25-50 per cent over the past two years. Lease rates for commercial spaces, however, have been more or less steady over the same period. Around 4.5 to 5 million sq.ft commercial office space will be developed in Pune over the next two years and should be enough to keep the prices steady in the near future.
The average lease rates for constructed office premises are the highest in the Camp Area (including East Street and M. G. Road), Deccan and Laxmi Road and are in the range of Rs. 38 to Rs. 40 per sq.ft. This is followed closely by the F.C Road and J.M. Road areas, at between Rs. 35 to Rs. 38. Currently, lease rates at Nagar Road are on the lower side; between Rs. 25 to Rs. 28, and this location looks to be extremely attractive as the in place for commercial development in Pune.
Lease rates for retail spaces could be upto 100-150 % higher than the similar figures for office spaces. This very well indicates the strong growth the retail segment is currently enjoying in the city.
The trends in the outright sale rates are very similar to that in the lease rates. The rate in Camp, Lakshmi Road and Deccan areas is between Rs. 3700 and Rs. 3900 per sq.ft for an outright sale. If the sale happens during or before construction level, the buyer can avail of discounts ranging from 10-20%.
Areas like Wanowrie, Kothrud, Bavdhan, Hadapsar, Kondhwa, Kharadi, Katraj/ Baner Road and Aundh are also growing. Industrial activity has been happening in Hadapsar, Kondhwa and Katraj. A lot of commercial development is happening in Kharadi and Kothrud. Areas like Baner and Aundh are primarily residential zones; one does find evidence of some IT activities in these areas.
The outskirts of Pune are the ones where industrial/manufacturing activity has been very rapid, though one finds places like Hinjewadi and Talawade that lie in the outskirts and are today hubs of service-oriented businesses like IT. Pimpri-Chinchwad , Hinjewadi, Chakan, Pirangut upto PaudandMulshi, Mohammedwadi and Talawade have been classified to be the outskirt areas of Pune. Most of these areas are best suitable for factory spaces. (Contributed by Chittaranjan Godse )
