Information technology has proved to be the most important lodestone for boosting and also re-defining real estate demand in India’s cities. The IT/ITeS sector provides massive, well-paid employment opportunities in cities with appropriately educated and trained workforces such as Bangalore, Mumbai, Pune, Hyderabad and Chennai.
Because of the higher purchasing power and more evolved tastes of home buyers from this segment – and the kind of supply that crops up to cater to these factors – locations that cater to their demand eventually feature property valuations that are higher than the average benchmark for a city. However, most IT-centric hotspots in a city tend to have a modest start and catch up in the pricing steeple-chase only as the area develops.
In Pune, we now have firmly established as well as quickly growing IT-driven property locations that command the limelight among end users and investors alike.
Ø Kalyani Nagar
Kalyani Nagar has emerged one of the most prominent and established commercial and residential real estate destinations on the Eastern Corridor of Pune. Its strategic location between Koregaon Park and Viman Nagar and its proximity to the airport, railway station and close connection to Kharadi and Hadapsar makes it an ideal destination for IT/ITES companies. The Pune-Mumbai Expressway has been another major contributing factor.
It was was given a head-start by Dr. Neelkanth Kalyani – owner of various notable companies like Bharat Forge and Optronica – after whom it is named. Today, it is a hotbed of Information Technology activity and has come a long way as one of the most upmarket residential property destinations in Pune. It is home to up-market hotels and boasts of a golf course as well as prestigious social establishments.
The unstoppable tide of the IT and ITES-BPO segments has completely reinvented the property landscape at Kalyani Nagar. High grade residential property options have sprung up all over. Amongst all the above-mentioned localities, Kalyani Nagar’s rate of development is by far the fastest. Judging solely on the basis of property market potential, the Estate Agents Association of Pune voted Kalyani Nagar to be one of the most promising localities in 2005.
The Government responded to this potential by beginning construction of the Kalyani Nagar-Koregaon Park connecting bridge, thereby linking two of the most progressive and vibrant localities. The ease of transport and commuting that this has resulted in is has resulted in even higher industrial and retail activity, and has given a major boost to the residential property sector, as well. With Kalyani Nagar firmly on the high-priority list, development is going on at an accelerated rate.
For today’s home seeker, this area is a regular treasure-trove of attractions. Most reputed builders in Pune have at least one luxury residential project here, and the general infrastructure is supremely conducive to modern family life. Priced at an average of Rs. 9000-19000/sq.ft, residential properties at Kalyani Nagar definitely command a premium over most of the other localities in Pune City.
Aundh’s real estate market in both the residential or commercial segments has retained the ace position among Pune’s suburb for quite some time. Demand for properties in both categories witnessed an upsurge when Pune’s IT boom began taking off in all earnestness and residential prices in central Pune began increasing rapidly, leaving no scope for mid-income housing projects. The demand from IT and ITeS-related office and residential spaces in the Western corridor was being fuelled constantly by the Hinjewadi IT Park, and Aundh was the first area to benefit seriously from it.
Aundh enjoys a propitious location which catches the demand from central Pune as well as the IT-driven demand for homes close to Hinjewadi. Due to its advantageous placement in the Western corridor, its accessibility to various other hot pockets of the city and the presence of good civic and social infrastructure, Aundh continues to be one of the most sought-after locations for a majority of Puneites.
Aundh is by now a very well-established market. The supply of new projects is very low, with just few developers active with premium segment offerings, among them Pride Group, Pristine and Nandan. This market has seen a high level of residential real estate development and consumption across categories, and the options that remain in terms of new projects are scarce and largely focused on the high-end segment. Whatever is available tends to be snapped up quickly by end users and investors focused on the considerable rental income that a residential property in Aundh can fetch.
With an annual appreciation of approximately 20%, the property prices in Aundh are largely unachievable for the baseline consumer, being currently in the range of Rs. 10000-12000/sq.ft. The area has a good secondary sales market, but the available options are in old buildings that offer no extra frills or modern amenities. Prices on Aundh’s resale market range between Rs. 7500-8000/sq.ft. This underscores the fact that Aundh has considerable ‘address’ and continuing location value.
While it has many contenders in the form of nearby areas such as Wakad, Aundh has established itself a priority port of call for many of Pune’s well-heeled IT professionals who value its generous availability of shopping outlets, high-grade restaurants, proximity of Pune University and excellent connectivity to central Pune as well as Mumbai via the Expressway. With many private bus operators having operation bases in Aundh, connecting to the financial capital is a matter of advantageous ease for those who need to travel there often for business.
While Aundh was the first area to gain significantly from the IT boom in Pune, its development potential diminished rapidly under the onslaught of a relentless spate of projects. With reduced development, price appreciation also reached a certain level of stagnation in this market. Soon, the limelight shifted and Wakad, which became the next investment location for mid-income housing on the city’s Western periphery.
Located in the highly-developed PCMC area, Wakad has a host of positive market drivers to keep its real estate market vibrant. With its proximity to Mumbai-Pune Expressway and the thriving IT hub of Hinjewadi, as well its accessibility from the PCMC industrial area, Wakad now attracts a lot of young end users in the age group of 30-40. For this reason, it has become a new focus for property investors, as well.
Residential property prices in Wakad currently range between Rs.5500-6000/sq.ft., and host of developers such as Kalpataru, Rohan, Kolte-Patil, Pristine, Kasturi and Javdekar are catering to the demand for homes from the mid-income segment. Wakad has seen annualized appreciation of 15-18% and continues to benefit from demand drivers such good civic infrastructure and vast improvements in connectivity to the city’s key pockets.
While the absence of social infrastructure and an ongoing shortfall in public transport still provide a negative contrast, demand for housing in Wakad has been overtaking supply and prices there have soared. Benefiting from the spill over demand from Wakad, adjoining areas like Tathawade, Punawale, Ravet and Rahatani are gaining momentum with prices ranging between Rs.4000-5500/sq.ft. Compared to the staggering rate at which the property prices are rising, with such low welcoming prices, the western peripheral region definitely has the potential for high appreciation in the near future.
Baner emerged at a time when residential prices in central Pune were on a new high and potential buyers and investors were on the hunt for affordable options that did not mean a compromising on overall connectivity to the city. After Pune’s IT boom began taking off in earnest, the city was expanding with the new focal point called Hinjewadi.
Aundh was the first area to gain significantly from this, but could cater to the demand for housing only to a certain extent. Baner was propitiously located to catch both the spillover demand from central Pune as well as the new IT-driven demand for homes close to Hinjewadi.
Initially, Baner was able to cater to the mid-income housing segment. However, a new profiling for this area began taking shape as it became an established address. A host of major developers such as ABIL, Pride Group, Kumar Properties, Javdekar Developers, Amit Enterprises, Kalpataru, Rohan, Paranjape and Supreme began venturing into the premium segment and began luxury homes with superior designs and amenities at Baner to address the demand from the high-income IT clientele. This also began affecting Baner’s average residential pricing dynamics.
Baner has seen historical appreciation of 20-25% and continues to benefit from multiple demand drivers such as serenity of location, presence of good social infrastructure, proximity to the Pune-Mumbai Expressway and Pune’s original and still most thriving IT hub Hinjewadi, and great accessibility to central Pune. It is still one of the most aspired-for residential locations in Pune; however, with residential property prices there currently ranging between Rs. 7000–10000/sq.ft., Baner is no longer an option that everyone can afford.
Of late, residential pricing in Baner has begun showing early signs of saturation in the face of considerable supply and the fact that the area has priced itself out of the larger consumer segment. Benefiting from the spillover demand from Baner, adjoining areas such as Baner Extension and Balewadi are gaining momentum because of more attractive pricing ranging between Rs.6000-6500/sq.ft. and are all set to become part of the next investment hub in Pune’s burgeoning Western corridor.
Located on the eastern periphery of Pune, Wagholi has evolved into one of the city’s important suburb. About half a decade ago, the area was mostly dominated by local industries along Nagar Road. Like Hadapsar, it has now successfully shed the usually resilient image of ‘industrial area’ and is gaining prominence as a residential destination of note.
Thanks to its strategic location on Nagar Road, Wagholi provides very good access to the existing and upcoming commercial establishments in Kharadi, Hadapsar and Bund Garden. It further benefits from market drivers such as its proximity to Pune Airport, accessibility to the thriving eastern IT hubs of Magarpatta and Kharadi as well as the Shikrapur-Chakan industrial belt. Demand for homes in Wagholi is primarily driven by professionals from the city’s IT and industrial professionals.
Influencing factors like affordability, improving social infrastructure and the presence of good educational institutions such as schools and engineering colleges are generating considerable interest from end users and investors in this location. Moreover, Wagholi is now scheduled for inclusion within Pune’s municipal limits, which means that water and electricity supply will be regularized.
Infrastructure initiatives that will benefit Wagholi in the foreseeable future include the proposed Ring Road to which this location is advantageously juxtaposed to, a four-lane flyover linking Wagholi to Shikrapur and several additional roads and bridges that will improve connectivity to Kharadi and other key locations in Pune.
Wagholi has seen steady appreciation in property rates to the tune of approximately 15-20%, depending on the exact placement and typology of individual projects. A number of large and local players such as Karia, Kolte-Patil, Goel Ganga, Belevekar Housing, Konark Builders, Mantra Properties, Marvel Group and Eiffel Developers are active with mid-income housing projects in the area. Currently, residential prices in Wagholi range from Rs.3800-4200/sq.ft., clearly marking it as a location that still offers relative affordability when compared to neighbouring Kharadi.
With the rapid development taking place along Pune’s eastern belt, Wagholi has considerable growth potential over the next 5-10 years, a fact that long-term property investors are taking very seriously.
Charoli is an emerging location in the Northern part of Pune which has several advantages working for it. The increasing number of professionals from the IT and manufacturing / industrial sectors in Pune has triggered escalated demand for mid-income housing in the city. To cater this demand, developers are exploring new peripheral regions in the city. The quest to meet the demand for affordable, yet strategically located homes in the northern region of Pune is resulting in fresh locations like Charoli on Pune’s real estate map.
As the latest entrant in this part of the city, Charoli is strategically located near Pune’s Lohegaon Airport and is all set to capture a significant share of the demand for affordable housing in this region. Charoli is advantageously placed to catch the spillover demand emanating from Vishrantwadi as well the new IT and corporate-driven demand for budget homes close to Yerwada, Viman Nagar and Kalyani Nagar.
The real estate boom continues to unfold on Nagar Road, a region for which proximity to the Pune Airport has always been a major growth catalyst. Charoli enjoys various other location pluses such as fast access to the railway station (which is just 11 km away) and the fact that the IT hub at Kalyani Nagar is only 9 km away.
With prices reaching saturation point in areas such as Viman Nagar, Kalyani Nagar and Vishrantwadi, buyers with more modest budgets are looking for affordable options in the surrounding region. Neighbouring Dhanori has already seen a significant amount of development over the past couple of years. Now, with the proposed Ring Road running alongside Charoli, this fast-paced development trend is going to extent into this upcoming suburb of Pune. Charoli will be one of the first regions to receive the benefits of the Ring Road as well as other proposed infrastructure projects.
So far, the rapidly growing demand for homes in Charoli has been catered to by local developers. However, major player Pride Group’s entry into the region with a 400 acre township project marks the beginning of a major trend shift in terms of location characteristics as well as real estate value growth for Charoli. Townships have historically proven to be game-changers for the locations that they come up in, as has been evidenced by Magarpatta and Amanora. The story has just started for Charoli. With property prices currently ranging between Rs.3200-3500/sq.ft, Charoli definitely holds notable growth potential and promises good returns on investment over the mid-to-long term.
Ø Pimple Nilakh
Pimple Nilakh, located in the western part of Pune, is a suburb of the Pimpri Chinchwad Municipa Corporation and is a growing residential hub. Among the fastest-growing of the areas neighbouring the Hinjewadi IT hub, Pimple Nilakh has experienced a steep increase in property rates on account of the dominant IT culture in the Western region. It is seeing high demand from both end users and investors.
The market drivers at Pimple Nilakh include proximity to Mumbai-Pune Expressway and its proximity to established areas of Baner and Aundh, where property rates have more or less peaked beyond the affordability of the mid-income segment. Names such as Goel Ganga, Kolte-Patil, Sagar Properties, Nico, NSG Group and Vasupujya Corporation number among the developers with projects in this region.
Pimple Nilakh receives the spillover demand from Aundh and Baner as well as from Pimpri-Chinchwad and some of the industrial-driven demand from Talegaon. A significant number of commercial establishments around this region have proven beneficial by triggering the overall development at Pimple Nilakh. With current residential prices ranging between Rs.5750-7000/sq.ft. and steady appreciation of approximately 15-20% per annum, prices have effectively doubled there in half a decade – a fact that has not been lost on investors.
Having overcome issues of connectivity and infrastructure development in the past, Pimple Nilakh still lacks organised formats of social infrastructure. However, due to its proximity to major commercial hubs, Pimple Nilakh enjoys good peripheral availability of the social Infrastructure in its neighbouring areas.
With the growing popularity of this location, the Government has accepted the need to address the development of more civic infrastructure in this location, which is growing rapidly in the shadow of Aundh and Baner.
Ø Pimple Saudagar and Rahatani
Located on the western periphery of Pune, Pimple Saudagar has seen increasing demand from IT/ITeS-centric home buyers. As soon as the residential market of Aundh began to saturate, end users started looking up for spaces that would fit in their budgets and Pimple Saudagar soon saw rapid development. Players such as GK Associates, Sukhwani Constructions and Wadhwani Constructions are heavily in the fray with mid-income housing projects.
Pimple Saudagar enjoys all the primary market drivers that lend vibrancy to the entire western region of Pune. It currently patronized mainly by end users and is only beginning to attract serious attention from investors. At property rates ranging from Rs.5200-5700/sq.ft. and annual appreciation of 13-15%, this region presents very good options for home buyers who are also focused on healthy investment growth.
Rahatani, yet another emerging suburb of the PCMCP, is a residential hub catering mainly to the affordable housing segment. Due to its proximity to the Mumbai-Pune Expressway and the manufacturing belt of the west, Rahatani receives a lot of demand from the IT and industrial sectors. Current prices range between Rs.4800-5300/sq.ft. and appreciation has been to the tune of 12-14%.
Both the areas seen considerable development and absorptions, and are by now established markets within their own segments. They enjoy good civic infrastructure and benefit from educational institutions are available in close vicinity. The region currently lacks in terms of social infrastructure, but there are upcoming malls scheduled within the region that provide a convenience upgrade. All in all, Pimple Saudagar and Rahatani show promising potential over the mid-to-long term.
Sanjay Bajaj, Managing Director – Pune, JLL India