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Emerging property destinations of Pune: JLL

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The following is the report by Sanjay Bajaj, Managing Director – Pune, JLL India

Although Pune has seen consistent appreciation in the last decade, there have at all times been areas that have exceeded the average capital value (CV) appreciation rate due to reasons like infrastructure development, supply and absorption, the arrival of new IT offices/parks, or their proximity to Pune’s central business district (CBD), etc.

Four such emerging pockets are:

Wagholi Pocket (Wagholi, Bakori)

Demand drivers

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·    IT/ ITeS development in Kharadi, Nagar Road / off Nagar Road and Viman Nagar.

Demand for housing in this north-eastern sub-market is driven mainly by IT/ ITeS developments in Viman Nagar, Kharadi and Nagar Road/ Off Nagar Road. Various IT parks such as Eon, Tech Park One, Giga Space, Weikfield IT Park, Raheja Commerzone and Kumar Cerebrum in Kalyani Nagar are home to major global IT and business process outsourcing (BPO) companies.

The development of these office hubs has given a strong boost to employment opportunities in the northeast sub-market, resulting in rapid residential growth. In addition, the Wagholi sub-market benefits from the presence of important physical and social infrastructure, including proximity to the airport and Hadapsar railway station, prominent hospitality and retail developments and reputed educational institutes.

Wagholi has emerged as a preferred residential destination over the past two years or so, mainly due to the fact that property prices are more competitive here compared to other residential sub-markets along Nagar Road, such as Kharadi, Viman Nagar and Kalyani Nagar. The availability of land at relatively lower prices makes the Wagholi sub-market affordable. Wagholi also offers easy accessibility to central Pune via the completed six-lane Nagar Road.

The sub-market is well-connected to the industrial hubs of Ranjangaon and Sanaswadi via Nagar Road Highway. Proximity to quality educational institutes adds to the overall attraction of residential projects in Wagholi. Apart from its affordability, Wagholi is the most convenient area for people working in the Ranjangaon and Sanaswadi industrial sub-markets, as well as in the Kharadi-Magarpatta belt.

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Pune-Mumbai Expressway (Punavale, Marunje Road, Mamurdi, Gahunje)

Demand drivers

·         IT/ ITes development in Hinjewadi

·         High investor demand.

Initially, the better connectivity of certain sub-markets like Aundh, Baner and Balewadi to the Mumbai-Pune Expressway and the presence of industrial units in northern Pune led to residential development here in the early 90s. Over the past decade, particularly in the latter half of 2000s, sub-markets such as Wakad, Pimple Saudagar, Pimple Nilakh and Pimple Gaurav emerged as some of the most prominent residential destinations due to the their proximity to Hinjewadi IT Park.

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Growth in this corridor has been driven by the MIDC-promoted Rajiv Gandhi IT Park. However, established nodes such as Wakad, Aundh and Baner are being developed to near-peak capacity, and the focus of development is now slowly moving towards Punavale, Hinjewadi and neighbouring areas in the direction of Mumbai.

Bhugaon Pocket (Bhugaon and Pirangut)

Demand drivers

·         Investors

·         Affordable prices

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·         Good connectivity

·         Activity magnets like Hinjewadi and Kothrud.

The south-west corridor of Pune enjoys considerable scenic beauty, with lakes and dams such as Kadakwasala, Panshet and Mulshi in its surroundings. Many high-end villa projects are coming up here. This corridor has the potential to grow from leisure and weekend-destination oriented into an end-user driven market, thanks to its connectivity with central Pune and the close proximity to established nodes such as Chandini Chowk, Bhavdhan and Kothrud.

In the last two years, investment activity has increased significantly in areas such as Bhugaon and the nearby sub-market of Manas Lake on Pirangut Road. Lately, this area has also witnessed a lot of investor demand.

Undri-Pisoli Pocket (Yeolewadi, Pisoli, Undri, Mohammedwadi)

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Demand drivers

·         Working population in Magarpatta and the CBD area

·         Spill-over demand from Hadapsar

·         Affordable prices

·         Connectivity to central Pune

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·         Proximity to CBD when compared to other outskirts.

The IT development within Magarpatta township along with industrial units in Hadapsar are the primary drivers for residential demand in this corridor. With Wanowrie, Kondhwa and NIBM Road already being densely developed, the focus has shifted to Undri, Pisoli and the neighbouring areas.

In the last two to three years, this area has become one of the most preferred residential markets for people working in the Camp areas. This sub-market is now also in demand from people staying at Wanowrie, Kondhwa and Fatimanagar. The major reasons for buying properties in this pocket are the possibility to upgrade to bigger flats at affordable prices, acquiring a second home close to the existing one and also second-generation buying in this area.

The region has also witnessed spill-over demand from Hadapsar and Kharadi, as the prices in those locations have increased significantly and are no longer affordable for entry-level home buyers. This belt has also gained significance due to the presence of quality schools. Retail development is also becoming a factor driving the potential of the region.

With the alignment of the new Ring Road already finalised and traversing this corridor once completed, this pocket will see massive development on the heels of highly improved connectivity in the coming years. Some prominent developers have also acquired big land parcels in this region, and are likely to launch large residential projects in the medium-to-long term.

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Investor Tips

Property buyers can expect 5-12% annual appreciation on capital values, depending upon the location, product, delivery time frame, etc. – in these emerging pockets of Pune. Unlike end-users, investors are also focused on the best time to exit; a horizon of three years or more needs to be maintained for investments done today. That said, returns are subjective and will depend on factors like a project, area, location, etc. There is no thumb rule for how long one should stay invested, with the optimal horizon always being a function of a specific project, entry cost and annual appreciation achieved. However, a horizon of 5-7 years from project launch is very advisable.

In all cases, buyers must do thorough due diligence before buying properties in any emerging location. The following points need to be included:

·         Due diligence of the certified copies of registered title deed of the land parcel on which the property is to be built, to establish a clear title of the land

·         Ensure that all approvals received for the development

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·         Based on the survey numbers mentioned in the title deed, buyers must check the land use of the land parcel approved by the development authorities’ master plan

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