Growing at a healthy pace

A number of activities are happening on the infrastructure front in Pune, located less than 200 km from Mumbai

While the real estate segment in many cities across India appears to have slowed down, in Pune the sector continues to grow at a healthy pace, says a leading developer.
Satish Magar, Chairman and Managing Director, Magarpatta Township Development & Construction, a leading Pune-based developer, says a lot of activities are happening on the infrastructure front in the city, located less than 200 km from Mumbai.
"The Pune Metro work has started, so too has work on developing the inner and outer ring roads," explains Magar. "The state government has taken a lot of initiatives, which are good for the city. We will see a lot more development happening over the coming years."
Unlike urban hubs such as the National Capital Region or Bengaluru, where motorists get caught up in traffic snarls and it takes them two to three hours to reach office or return back home every day, in Pune it does not take more than an hour to reach from one place to the other, says Magar.
He admits that a perception has developed that the real estate sector across the country has gone through a lot of turmoil in the recent past. "But Pune's real estate market is driven by the middle-class and end-users," he points out.
However, uncertainties cropped up after the government introduced the Real Estate Regulatory Authority (RERA) Act and the Goods and Services Tax (GST) from July.
"Demand for properties is there in Pune, but the velocity has come down because of these two moves," he explains. "The market is still moving in Pune and it has not stagnated. Projects are getting completed." Prices for apartments have also not fallen, he asserts.
According to Magar, most buyers in Pune are from the middle-class who prefer apartments in the sub-Rs10 million category. The city's economy is also doing well, especially fast-growing sectors including information technology and automobiles, he notes.
"Many new IT parks are coming up in both the eastern and western parts of Pune," points out Magar. The city is also emerging as a major financial centre, attracting leading companies both from India and abroad.
"In fact, a shortage of office space, especially for the IT sector is expected over the next two quarters of the current fiscal (October to March), and supplies will only start during fiscal 2018."
But he does not expect rents to go up. They are expected to remain stable at the current rate of less than $1 (Rs63-Rs64) per square feet a month
The top real estate developer also believes that the industry across India will start stabilising once it accepts the new legislations. "RERA is a big game-changer for the industry," he points out. "While it has some minus points, it has a lot of plus points. We are now in consultation with the government to ensure a smooth transition to the RERA regime."
In Maharashtra, 700 projects have been registered under RERA and the only issue is over some ongoing projects. "These teething problems will be solved," he adds.
Magar is now the president-elect of the Confederation of Real Estate Developers' Associations of India (CREDAI). He takes over the two-year term as president from April 1, 2019. The organisation, which represents the Indian real estate sector, has more than 12,000 members across the country.
Asked about the projects taken up by his company, Magar says it is currently focused on Magarpatta - a hugely successful residential-cum-commercial complex in the heart of Pune - and Nanded City, which is coming up in the southern part of the city.
"Magarpatta is doing well," he says. "And in Nanded City, we have given possession to 7,500 apartment owners. By March, we would have delivered another 1,700 apartments."
The sprawling complex will ultimately have 35,000 housing units. Magar expects to give full possession in another 8 to 10 years. Nanded City will also have an IT township with offices for many firms.
When asked about sales to NRIs in the Gulf, Magar says they continue to show interest in both projects. "We still keep getting NRIs from the Gulf visiting Pune and asking about these projects," he adds.
His company is also planning to promote a new 500-acre residential and commercial project on the lines of Magarpatta on the Pune-Solapur highway. "This will be our third major project in Pune, bigger than Magarpatta, but smaller than Nanded City," explains Magar. "We are not looking at other cities as we are busy with Pune."
The new project will be launched this year or early next year, depending on the approvals to be granted by the government. It will be located closer to the new international airport being planned by the state government.

• India