High on plans, low on ac­tion

EX­PAN­SION Sec­toral and hous­ing de­vel­op­ment in the Pin­jore-Kalka Ur­ban Area is yet to take off even af­ter years of in­cep­tion

Hindustan Times (Chandigarh) - Estates - - ESTATES - HT Es­tates Cor­re­spon­dent

dou­ble by 2021, and in­crease to more than four fold to 5 lakh by 2031.

The scope of ex­pan­sion of Panchkula city is lim­ited. The PKUC is planned as an ad­di­tional planned de­vel­op­ment with Panchkula city to meet the in­creas­ing hous­ing needs in the tricity. An­other catch­ment area for the PKUC is the Baddi-Baroti­walaNala­garh In­dus­trial Com­plex in Hi­machal Pradesh’s Solan district, 10 km away. “Peo­ple work­ing in the in­dus­trial belt are de­pen­dent on this area and ad­join­ing towns for res­i­den­tial, ed­u­ca­tional, and health fa­cil­i­ties. The lo­ca­tion of the area on the bor­der of Hi­machal Pradesh and Haryana, and on the Shiva­lik foothills gives it an added at­trac­tion,” says Dhar­min­der Goel, 47, a Pin­jore res­i­dent and busi­ness­man.

Though home prices are rel­a­tively low in these towns and nearby ar­eas than Chandi­garh and Panchkula, it has failed to re­alise a size­able de­mand be­cause of in­ad­e­quate im­ple­men­ta­tion of planned de­vel­op­ment. But if the master plan is im­ple­mented ef­fi­ciently, the area can be a ma­jor hous­ing hub. “Most buy­ers find Chandi­garh, Panchkula and SAS Na­gar too ex­pen­sive. Op­tions such as Zirakpur have also be­come com­par­a­tively ex­pen­sive and these ar­eas are still strug­gling with in­fra­struc­ture. The PKUC should be de­vel­oped at a faster rate to be­come a mean­ing­ful al­ter­na­tive to cities. Rel­a­tively cheaper ar­eas in the tricity such as Zirakpur and Dera Bassi aren’t well planned and are strug­gling with in­ad­e­quate in­fra­struc­ture,” says Ran­deep S Saini, 43, a res­i­dent of Am­ra­vati En­clave.

De­mand con­sis­tently in­creased be­fore the mar­ket slow­down four years ago. Ear­lier, it was the com­par­a­tively low prices in the area but later the at­trac­tion was the planned de­vel­op­ment. De­mand in the area is still dom­i­nated by low and mid­dle in­come g roups, and peo­ple plan­ning to set­tle here af­ter re­tire­ment. The com­ing of pri­vate play­ers boosted sup­ply, par­tic­u­larly in the area be­tween Pin­jore and Panchkula. If plans are ex­e­cuted well, the area can be a bet­ter al­ter­na­tive to Mul­lan­pur com­ing up in SAS Na­gar district ad­join­ing Chandi­garh, say lo­cal realty ex­perts.

One of the prom­i­nent play­ers in the area is the Haryana Ur­ban De­vel­op­ment Author­ity (HUDA). A cou­ple of years ago, it floated an 890 plot The com­mer­cial realty seg­ment in the Chandi­garh tricity in 2016 fol­lowed last year’s pat­tern with the slow­down pre­vail­ing in most ar­eas.

The pe­riph­ery per­formed rel­a­tively bet­ter than the cities where both the rentals and cap­i­tal val­ues con­tin­ued to de­cline. In sev­eral lo­ca­tions, for the first time mar­ket prices fell below col­lec­tor rates. Lo­cal realty ex­perts cite high sup­ply, low de­mand and high col­lec­tor rates for price cor­rec­tions this year.

The pe­riph­ery, how­ever, ex­pe­ri­enced min­i­mum ex­po­sure to the slow­down be­cause of im­proved road con­nec­tiv­ity and rel­a­tively bet­ter f u t u r e p ro s p e c t s. The im­me­di­ate im­pact of de­mon­eti­sa­tion of higher value cur­rency notes was also min­i­mal as trad­ing in the seg­ment was rel­a­tively low, and mar­ket prices less than or in the same range as the col­lec­tor rates.

Re­port card

The sit­u­a­tion of price cor­rec­tions per­sisted this year, with price lev­els ap­prox­i­mat­ing the price lev­els five years ago. Both the end-user and the in­vestor de­mand re­mained low; high va­cancy rates also pulled down the rental growth rates, scheme for Sec­tor 30 in PKUC. Am­ra­vati En­clave (in­te­grated town­ship) has al­ready been de­vel­oped in the area along the Kaushalya river ad­join­ing National High­way 22. It has plots, in­de­pen­dent floors and apart­ments. DLF (DLF Val­ley Panchkula) and Ireo (Ireo Fiveriver), Panchkula, are other two ma­jor pri­vate play­ers ac­tive in the area. Most of the re­cent sup­ply ex­pan­sion has taken place in the in­de­pen­dent floor seg­ment with more than 3,000 in­de­pen­dent floors in dif­fer­ent stages of de­vel­op­ment. Other op­tions avail­able in­clude lux­ury vil­las and apart­ments. Prices are in the cor­rec­tion mode for four years. The last ma­jor price ap­pre­ci­a­tion took place in 2010-11 when prices in­creased by 25% to 30%. Gen­er­ally, the prices range from to

per sq yard. The pos­ses­sion de­lay in the newer projects has led to price cor­rec­tions in ad­di­tion to the slow­down in the mar­ket, say the ex­perts. par­tic­u­larly, for the first and sec­ond floors in big­ger show­rooms. In some lo­ca­tions, col­lec­tor rates are even higher than the mar­ket rates. The only ex­cep­tion to this gen­eral slow­down trend was the Sec­tor 20 mar­ket where the end-user de­mand was healthy and va­cancy rates low.

This year, proved that City Beau­ti­ful is no longer i mmune to sharp price cor­rec­tions, and the com­mer­cial seg­ment ex­em­pli­fied it. There were not only price cor­rec­tions across the city, even in com­mer­cial hubs such as Sec­tors 17 and 35 prices dropped. The city also strug­gled with high va­cancy rates and this caused the rental val­ues to de­cline. There is lim­ited in­dus­trial and com­mer­cial ac­tiv­ity in the city. Fi­nan­cial in­sti­tu­tions and high-end re­tails were ear­lier prime movers for growth in the seg­ment. But, this year de­mand for com­mer­cial and of­fice spa­ces from these seg­ments could no longer fuel growth. Also, the com­ing up of shop­ping malls in the in­dus­trial area drew away de­mand from sec­tor mar­kets, say lo­cal real es­tate ex­perts.

The trend in the city’s com­mer­cial seg­ment was sim­i­lar to the rest of the tricity.

Un­like the rest of the tricity where the com­mer­cial prop­erty sup­ply ex­pan­sion was re­stricted, in Zirakpur com­mer­cial and of­fice spa­ces con­tin­ued to grow and register price ap­pre­ci­a­tion this year. The Am­bala-Chandi­garh national high­way and the Zirakpur-Pa­tiala high­way wit­nessed the com­ing up of new shop­ping com­plexes, new con­cept prod­ucts such as SOHO (small of­fice, home of­fice) and floor-wise com­mer­cial spa­ces. “Though, the de­mand didn’t match with the sup­ply growth yet most builders, mostly lo­cal, cre­ated sup­ply in ex­pec­ta­tion of fu­ture growth around the high­ways. The fail­ure of the res­i­den­tial seg­ment to at­tract buy­ers forced de­vel­op­ers to start ex­plor­ing the com­mer­cial seg­ment this year. Both the end-user and the in­vestor were ac­tive in the mar­ket,” says Vi­neet Goel, 32, a lo­cal real es­tate con­sul­tant.

Though the over­all mar­ket sen­ti­ment in Kharar was sub­dued but on the newly opened air­port road, which con­nects the town with the in­ter­na­tional air­port, Zirakpur and Pa­tiala road, the de­mand for the com­mer­cial prop­er­ties in­creased. “Most of the com­mer­cial prop­erty in the town is ei­ther lo­cated on the high­ways or within res­i­den­tial colonies. De­mand lev­els were not very high but there was enough de­mand to keep prices ei­ther sta­ble or re­strict price cor­rec­tions in most lo­ca­tions,” says Rakesh Saini, 40, a lo­cal real es­tate con­sul­tant.

Loook­ing ahead

The in­vest­ment re­turns from the com­mer­cial seg­ment isn’t ex­pected to turn pos­i­tive in the near fu­ture. The im­por­tance of the seg­ment as an in­vest­ment as­set de­clined con­sid­er­ably this year, and this trend is ex­pected to con­tinue in the short and medium terms.

“The de­mand f rom the fi­nan­cial in­sti­tu­tions such as banks can boost de­mand in the sec­tor if these fo­cus on ex­pan­sion in the wake of de­mon­eti­sa­tion im­pact. Banks are cash rich at present. Still it would im­pact rental in­comes in some lo­ca­tions,” says Goel.

It was tough to exit com­mer­cial prop­er­ties, and this sit­u­a­tion is ex­pected to con­tinue in the new year.

In­vestors keen to in­vest in com­mer­cial prop­er­ties should fo­cus on smaller com­mer­cial spa­ces within and around res­i­den­tial ar­eas that can at­tract end-user de­mand, par­tic­u­larly in the pe­riph­ery, say lo­cal realty ex­perts.

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