We intend to become India's pre-eminent townships developer and set up a strong presence in ME.

Akash Pharande

Managing Director, Pharande Spaces

How do you access the Pune realty market and the opportunities in the residential and commercial real estate space in the backdrop of the initiatives taken by the government to strengthen the city's infrastructure?

Characterized by a strong industrial belt, an education hub, an important base for the armed forces and the second major IT destination of the country, Pune has witnessed rapid transformation in the last few decades. In recent years, the Centre for American Entrepreneurship called it an 'emerging global start-up hub.' This growth in the start-up ecosystem is mostly led by Pune's tech talent pool, Maharashtra's innovation-friendly policies, and numerous other factors.

All these factors have augured well for the residential and commercial growth in the city over the last two decades. With an estimated population of 7.4 million as of 2020, the city has seen sustained migration of professionals over the years. No wonder, it has transitioned from a Pensioner's Paradise into a vibrant economic hub close to the financial capital of India - Mumbai.

Moreover, to ensure sustainable development both economically and ecologically in Pune Metropolitan Region (PMR) including Pune, Pimpri-Chinchwad and its surrounding areas, the Pune Metropolitan Region Development Authority (PMRDA) was formed in 2015. It keeps a check on all infra-related issues and construction activity therein.

Tell us about the impact of the Covid pandemic on the residential sector in terms of demand and supply as well as the property prices.

Despite the onslaught of the pandemic since over a year now, Pune residential market stood fairly resilient. To its dismay, the city was amongst the worst-affected in not just Maharashtra but also the entire country during both the waves, thus impacting economic activity across various sectors. The residential market held on to its ground and did fairly well. Both demand and new supply remained robust and picked momentum ever since the ease of restrictions post the first wave in 2020. We saw q-o-q growth in both sales and new launches until the second wave in April to June quarter.

The biggest catalyst for growth in residential sales was the limited-period stamp duty cuts, low home loan interest rates and developer discounts and offers. The state government's stamp duty reduction was a game-changer and immensely helped keep the market momentum amid the pandemic. It eventually proved a boon for both homebuyers and developers alike.

Besides the strategic steps taken to boost overall demand, the average property prices here stood fairly attractive at Rs 6,573 per sqft in 2020 (according to Housing.com) for both first and second home buyers. After all, affordability helps the market to stay upbeat, especially during such exigencies.

What is your take on the scope of redevelopment projects in Pune, similar to that in Mumbai? Also, tell us about the impact of the Model Tenancy Act.

Redevelopment is the way forward for any metropolitan city and Pune is no different. While Mumbai is far ahead in terms of the number of projects that need to be redeveloped, Pune too has its share. The state government's move to rationalize the charges on premiums by 50% until December 2021 was a significant step taken last year. It would make redevelopment projects financially more viable for developers. Eventually, the redeveloped projects will add more supply into the city and thus help rein in property prices.

Meanwhile, the Tenancy Act when implemented would make things easier for all stakeholders - tenants, landlords and investors. As per the Economic Survey 2018, Pune alone has more than 2 lakh unoccupied homes that can accommodate 8-10 lakh people. And the major factors responsible for rising vacancies include unclear property rights, difficulties in rental contract enforcement, and low rental yields among others.

With at least 40-50% of the population in Pune projected to stay on rent, as per the survey, there is indeed a high demand for rental housing. And, even if part of the available unoccupied homes are released, it will not just solve the housing shortage in the city but also attract private sector participation into rental housing.

How do you foresee the concepts of senior living, student living, coliving, coworking, evolving here?

Even while cases have receded in the city, there are uncertainties of the third wave very soon. Amid this scenario, several start-ups would prefer to work out of co-working spaces rather than rent a space. These offer not just flexibility but also all safety and security measures. This will help the co-working segment to see some momentum in demand in the short to medium term. As for co-living, even while several players are following all safety protocols, demand may remain slow in the short period because many education institutes continue to remain shut. Also, for several professionals, the WFH culture still continues at least till October.

Pune has a significant number of township projects. What is your take on the changing consumer sentiment towards staying in a gated community especially in the wake of Covid where movement was restricted due to the lockdowns imposed?

The pandemic has changed consumer preferences with many now looking to live in bigger, open and greener spaces - all within a gated community. And notably, there are several housing societies that offer just the right mix. For instance, Pune's satellite town Pimpri Chinchwad has several housing societies to boast of. Several branded developers have also launched many large township projects here with state-of-art amenities. As many as 92,000 housing units have been launched in the PCMC region between 2013 till date. Of these, 92% were priced within Rs 80 lakh and come in various sizes and configurations.

Above all, the well-developed infrastructure at PCMC is a major advantage. And the ongoing metro project will further boost the real estate potential of the area once operational.

What is your current portfolio and what are your expansion plans for the next 3 years?

In its 26 years of operation, the firm has developed over 10 million square feet of integrated townships space as has shown a CAGR of 150%. Pharande Spaces intends to become nothing less than India's pre-eminent townships developer, followed by setting up a strong presence in the Middle East.

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