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Real Estate in Pune

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Submitted By pranaykodgir
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MarketScope
A review of market activity by Trammell Crow Meghraj

Pune Residential Market
Midyear 2006

A boom in the IT/ITES industry has brought with it people who are moving and settling in Pune. The flourishing IT / ITES sector has been instrumental in driving Pune’s realestate to an all time high. Western Pune had been the most prominent real estate development corridor due to proximity to Mumbai, excellent road connectivity due to Expressway & Mumbai – Bangalore Bypass and presence of Hinjewadi IT Park. However the focus of development is shifting towards the north eastern corridor on Nagar Road. Proximity to the airport, prime residential areas like Koregaon Park & Kalyani Nagar and proximity to the central area / core city are the key reasons for the emergence of areas like Kharadi as a IT / ITES destination. Residential activities across all the submarkets have been generally sluggish. Key reasons for a slowdown in this quarter could be attributed to gradual increase in prices of properties and hike in the intrest rates of home loans.

Market Makers
§ Mirchandani Developers launched their integrated residential project, PALMS in Pimple Nilekh at USD 54 per sq. ft. launch price. § Vasant Developers launched a scheme of 224 flats of 2 and 3 BHK project Vasant Avenue in Pimple Nilekh at USD 44 per sq. ft. launch price

SUPPLY
Stagnant Pune has witnessed trickling supply of residential space in this quarter, which is estimated approx. 0.25 million sq. ft. The city has not witnessed any major announcements / project launches in this quarter. Several integrated townships are in the pipeline and are anticipated to be launched in the next few months.

VACANCY
Low absorption This quarter has witnessed low absorption rates as compared to the earlier quarter. Key reasons for poor absorption rates are the increase in the interest rates of housing loans and speculation of a correction in the property prices in the residential segment.

DEMAND
The demand for residential properties is high in certain prime pockets of the city like Koregaon Park, Boat Club Road, Magarpatta City and Sopan Baug.

CAPITAL AND RENTAL VALUES Rise in the North East
Residential property prices have moved northwards in this quarter in comparison to the earlier quarter. The capital values are lowest in the southern parts of the city in a range of USD of 33-51 per sq. ft. and highest in the north eastern parts in a range of USD 49-79 per sq. ft. The property prices in vicinity of the IT corridor of Hinjewadi have also improved over the earlier quarter.

Market Scope
Capital Values
$90.00 $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 Q105 Q205 Q305 Q405 Q106
USD per sft.

Pune Residential Market
Prime Suburbs

Midyear 2006
Prime Suburbs

Rental Rates
$7,000.00 $6,000.00 $5,000.00 $4,000.00 $3,000.00 $2,000.00 $1,000.00

USD per unit per annum

Q206

$0.00 Q105 Q205 Q205 Q405 Q106 Q206

Pune Statistical Summary
Total Inventory (sq. ft.) 39,744,000 181,963,000 198,907,000 108,147,000 168,701,000 16,920,000 114,113,000 23,532,000 852,027,000 Under Construction (sq. ft.) 2,110,000 1,291,000 2,876,000 3,360,000 93,000 98,000 6,175,000 18,069,000 34,072,000 New Deliveries (sq. ft.) 500,000 220,000 200,000 195,000 580,000 250,000 1,945,000 Net Absorption 1st Q 2006 (units) 105 23 75 30 20 185 55 493 Capital Value (USD per sq. ft.) 38-49 33-51 62-89 38-53 38-58 49-84 49-78 47-69 Average Asking Rent (2BHK / 3BHK / 4BHK) USD Per annum 1067-1333 1253-1867 2453-5653 1600-2267 1653-2133 2267-6667 1867-4000 2187-2933 1120-1600 1333-2000 3200-6667 1653-2400 1920-2400 266706400 2133-5333 2667-6267 1120-1733 1733-2133 4400-8533 1813-3200 2267-3333 4000-8533 3200-5067 4000-8533 -

Sub market North South Central South-East Old City Cantonment North-East (Eastern Corridor) North-West (Western Corridor) Total

Total Vacancy -

About Trammell Crow Meghraj Trammell Crow Meghraj is an equity partnership between TRAMMELL CROW COMPANY, one of the largest diversified commercial real estate services companies in the world with MEGHRAJ GROUP, a private financial services company (UK), with diverse business interests and Sundown Develop ments Limited, a real estate investment company from the UK. Established in 1995 as Chesterton Meghraj, the company provides full service property consultancy specializing in research, consultancy, agency, project management and property/facilities managem ent and employs over 7 20 people across eight offices throughout India namely Mumbai, New Delhi, Chennai, Bangalore, Hyderabad, Kolkata, Pune and Chandigarh.

Trammel Crow Meghraj Property Consultants Pvt. Ltd 506, ‘Nucleus’, CTS No 1, Church Road, Opp. Police Commissioner Office, Pune- 411001 Ph: 91 20 30925566 e-mail: pune@tcmindia.net

Copyright © 2006 Trammell Crow Meghraj. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Trammell Crow Meghraj from property representatives and other sources believed to be reliable. Trammell Crow Meghraj, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.

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