Real estate Investment – A Comparison of & Hyderabad

A Publication of Table of Contents

Introduction

Chapter 1 – Real Estate in Pune

Chapter 2 – Real Estate in Hyderabad

Conclusion Introduction

“This city is firmly in the limelight today, and will continue to be there for several years to come. Investors are reaping generous rewards for intelligent plays in the city’s growth pockets, and the city’s boundaries are constantly expanding to bring in more of such pockets. It is an unmatched opportunity across the mid- term and long term,” - Sanjay Bajaj, managing director – Pune, JLL .

Pune is the city to be in. Cosmopolitan and bussing with activity. As far as real estate is concerned, many areas in the city have exceeded the average capital value (CV) appreciation following infrastructure development, supply and absorption. Its inclusion among the 100 Smart Cities programme means that interest from multinational companies to set up and expand operations here will increase, which in turn will increase influx of workers and fuel greater demand from investors, even as local end- user demand stays unchanged. "The present property market is stable and showing signs of improvement. TheIntroduction twin cities of Hyderabad and Secunderabad offer world class infrastructure and amenities. The Hyderabad property show is poised to further accelerate the market and will provide the best real estate options to buyers. We strongly believe that this is the right time to purchase property as prices are going to increase in the near future. “ - N Jaiveer Reddy , President, Credai Hyderabad

With the political turmoil post Andhra Pradesh’s bifurcation stabilizing, property prices having bottomed out in Hyderabad. The future looks bright. Low home prices and buoyant commercial activity makes the city a hotspot for home buyers and investors. 1

CHAPTER ONE Real Estate in Pune The Pune Story… …Pune…

• Proximity to Mumbai (less than 3 hours by expressway) • Hub for educational institutions, IT & auto manufacturing with consistent economic growth

Tata Motors, Kirloskar, Mercedes-Benz, Bajaj, TCS, Infosys, Wipro, Cognizant, Mahindra, Capgemini, L&T …

• Pune is ranked No. 2 in India in ‘Mercer Quality of Living Rankings 2016’

• Second home for Mumbai investors …Pune…

Continuing Socio – Economic Growth Story…

• Average GDP growth rate: 8.23%

• Growing population : Expected growth by 2020 Vs 2016 : 11%

• Upcoming infrastructure – Pune Metro, Intl Airport

• Cosmopolitan city with low crime rate

• Included in the 100 Smart Cities programme

• Real estate in areas like Hinjewadi, Marunji Road and , where most of the IT & ITes companies are based, have a seen a positive trend in property prices over the last year. A number of new projects have been launched …Pune…

• The industrial township of -, just north of Pune city, houses over 4000 manufacturing units that contributes to the city’s economy

• Pune is also the headquarters (south command) of the Indian Air Force and a large military training base

• Other recent large scale investments in Pune include a Food Cluster Development project, aided by the World Bank, and an International Exhibition and Convention centre, set to open in 2017

• Improved physical and social infrastructure: due to the growth of large peripheral areas around Pune there has been a marked improvement in infrastructure. Earlier, only certain central areas like Bund Garden, M.G Road, and Deccan had decent infrastructure, now outer areas like Aundh, , , & also enjoy good infrastructure Pune Real Estate: Steady growth story over the last 5 years

Super Premium end shows more fluctuation similar to other cities but the mass to upper mid ( 50006000 psf range ) is steady Growing Localities in Pune

IT driven localities which are popular with end users and investors alike:

• : Located in the Eastern corridor, its strategic location between Koregaon Park and Viman Nagar together with its proximity to the airport, railway station, Kharadi and makes it an ideal destination for IT/ITeS companies. The Pune-Mumbai Expressway is also close by

• Aundh: Located in the Western corridor, it has benefitted from the development of Hinjewadi IT Park.

• Wakad: Located in the highly-developed PCMC area, Wakad is close to the Mumbai-Pune Expressway, IT hub of Hinjewadi and well connected to the PCMC industrial area • Baner: This area has seen a historical property value appreciation of 20-25 per cent. It benefits from multiple demand drivers such as serenity of location, presence of good social infrastructure, proximity to the Pune-Mumbai Expressway and the thriving IT hub at Hinjewadi and accessibility to Central Pune

• Charoli: Located strategically near Pune’s Lohegaon Airport, it is ideal for homebuyers and investors looking for affordable housing. Other pluses include fast access to the railway station (11-km) and the IT hub at Kalyani Nagar, 9-km away.

• Pimple Nilakh: Located in the Western suburb of Pimpri Chinchwad Municipal Corporation, Pimple Nilakh is a growing residential hub. Market drivers include proximity to the Mumbai-Pune Expressway and established areas of Baner and Aundh and Hinjewadi IT hub …Pune…

Source: housing.com 2

CHAPTER TWO Real Estate in Hyderabad The Hyderbad Story…

Source: indiamarks.com …Hyderabad…

• 5 th largest contributor city to India’s overall GDP • 1 of only 2 cities in India where unsold inventory has not increased in 2016 • Hyderabad is ranked No. 1 in India in ‘Mercer Quality of Living Rankings 2016’ • Known as global center of IT. Contributed 15% of India’s and 98% of AP’s exports in IT and ITES sector • HITEC city – Extensive technological infrastructure – Home to more than 1300 IT & ITES firms • Voted as “second best Indian city for doing business” by World Bank Group • With 8% Q-o-Q growth, Hyderabad recorded the highest price increase among nine cities from an average price of Rs 3,589 per sq ft in the fourth quarter of 2015-16 to Rs 3,890 per sq ft in Q1 2016-17. (Source: Prop Tiger Data Labs) …Hyderabad…

• Hyderabad is emerging as a new hub for luxury housing, with a 69 per cent share of total demand in this segment. This trend could be attributed to the affordability factor that comes along with luxury. (Source: Prop Tiger Data Labs) • Hyderabad recorded the highest annual price appreciation at 6% in Q1-Q3 2016 …Hyderabad…

• The rental yields in Hyderabad are comparable to the top locations in countries such as Singapore, Hong Kong, Philippines

• The ideal locations to invest in are towards the western corridor such as Gachibowli, Narsingi, Kokapet, Tellapur and Manikonda as high quality office spaces in Madhapur and Gachibowli will be occupied by the end of the year Conclusion

The slowdown that has darkened the Indian real estate sector in the last 2 years presents a great opportunity for both end users and investors. Due to the slow housing growth, not only have the prices of homes become more affordable, but home loan rates are also low today.

A lot of NRIs would like to invest in property back home but they are sitting on the fence as they do not trust developers. Now is the right time for these buyers to take the plunge as the has recently passed the Real Estate Regulatory Authority (RERA) Bill, which proposes several measures to address developer issues and fix more accountability.

Both Pune and Hyderabad are good places to invest in. Both have growing economies especially the IT & ITeS sector and potential is limitless. 5 reasons to buy a home in Pune: 1. Property Value Appreciation 2. High Construction Activity 3. Developing Infrastructure 4. Small & Clean City 5. A Smart City

Reasons to buy a home in Hyderabad: 1. Home prices bottomed out with stable government in Telengana 2. MNCs are starting to invest 3. Prices in most localities rising. HiTech City saw the highest increase in July 2016 of 8% (Prop Tiger) 4. IT sector vibrant & expanding

Pune or Hyderabad, the point to remember is that prices of homes in both these cities are lower than any metro and yet they have all the conveniences of one. Whatever your choice, due diligence before investing is a must.