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Pune Property - Real Estate Market Review


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Pune Property Market Review - Residential Property market with analysis of segments.

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Pune Property - Real Estate Market Review

  1. 1. Pune Residential Market Review
  3. 3. 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.
  5. 5. Zone Major Areas Central Pune Bund 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
  6. 6. Average Price Per Sqft for Residential Properties in Pune
  7. 7. 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 38,809 40,452 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
  8. 8. 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.
  9. 9. Drivers of Pune Residential MarketDrivers of Pune Residential Market
  10. 10. 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
  11. 11. Infrastructure development in the city is also supporting growth
  12. 12. Infrastructure development in the city is also supporting growth
  13. 13. 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.
  14. 14. Regional AnalysisRegional Analysis
  15. 15. 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.
  16. 16. 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.
  17. 17. 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 veryKarve 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.
  18. 18. 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 itto 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.
  19. 19. 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 preferredThese 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
  20. 20. 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.
  21. 21. 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.
  22. 22. 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.
  23. 23. 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
  24. 24. 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.
  25. 25. Market InsightsMarket Insights
  26. 26. 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.
  27. 27. 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.
  28. 28. 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.
  29. 29. 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.
  30. 30. 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.
  31. 31. 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.
  32. 32. 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.
  33. 33. Flatons Advisors 3, Alpha Building Lane no 12 Kalyani Nagar, PunePune Tel: 020 41 2040 60 E : W: