MUMBAI REAL ESTATE - MAKE WAY FOR THE SUBURBS

Abhishek Kiran Gupta, Head – Real Estate Intelligence Services, Jones Lang LaSalle Meghraj

Internationally, suburban locations are formed and defined on the basis of road-travel time from the inner city. The concept of a parent city that spawns satellite cities is very distinct, with such satellite cities located anywhere between 25-50 kilometres from the parent city. Typically, such satellite cities are self–sufficient in almost all respects pertaining to lifestyle and social amenities.

This cannot be said for Indian suburbs, which must be seen in close context with their parent cities. Rather, Indian suburbs tend to be the results of peripheral and are extensions of the parent city that grow homogenously. The growth story being told by Indian suburbs is more about the absorption of demand that spills over from saturated and therefore often infrastructurally challenged central locations that are paradoxically overpriced.

In Mumbai’s real estate scenario, the suburban landscape has its stars as well as bit players that are gearing up for centre stage.

BANDRA (W)

Among the stars, Bandra (W) has always been considered an excellent location thanks to its high-end properties, sea link connectivity, good shopping and lifestyle embellishments such as restaurants and recreation facilities. It also boasts of a rather select array of schools and colleges.

Rates: Rs. 15000-45000/sq.ft.


KANDIVALI AND BORIVALI

Kandivali and Borivali are increasingly favored because of their budget properties and the fact that they have conveniences like shopping malls, educational and healthcare facilities and good train connectivity.

Rates:

Kandivali (W) – Rs. 4000-6000/sq.ft.

Kandivali (E) – Rs. 5500-7000/sq.ft.

Borivali (W) – Rs. 4000–6500/sq.ft.

Borivali (E) – Rs. 4000-6000/sq.ft.



MULUND AND VIKHROLI

Mulund and Vikhroli are also budget locations that are relatively less congested than areas of Mumbai. They have the advantages of good road and rail connectivity to the hinterlands and also town-side, as well as a suitable bouquet of shopping malls and hospitals.

Rates:

Mulund – Rs. 4500-7500/sq.ft.

Vikhroli – Rs. 5500-7500/sq.ft.


THANE

Thane ranks high on general infrastructure, affordability in terms of properties by reputed developers, and the fact that it is its own workplace catchment on many levels.

Rates: Rs. 3000-6000/sq.ft.

NAVI MUMBAI

Navi Mumbai is a planned city with good infrastructure and its own distinct culture and lifestyle. Property rates are favourable, and there is a good range to choose from.

Rates:

Vashi – Rs. 3500-5500/sq.ft.

Kopar Khairne – Rs. 3000-3500/sq.ft.

Airoli – Rs. 2500-3500/sq.ft.

Sanpada – Rs. 3000-4000/sq.ft.

Nerul – Rs. 3000-4000/sq.ft.

Kharghar – Rs. 2500-4000/sq.ft.

Kalamboli – Rs. 2000-2400/sq.ft.

Panvel - 2000-3000/sq.ft.



Mumbai’s suburban growth potential does not end with the currently established locations. The area beyond Panvel is developing rapidly, with a hallmark being Reliance’s Maha Mumbai mini city project. There are also many other developers in the fray, and this area is eventually bound to emerge as a suburb in its own right. Kalyan and Dombivili are increasingly becoming connected to the rest of Mumbai and will figure high on the radar before too long. Bhayander, Nalasopara and the Vasai-Virar region are also ramping up to become extended suburbs of Mumbai.

Rates:

Dombivali – Rs. 2500-3200/sq.ft.

Kalyan – Rs. 2500–3200/sq.ft.

Bhayandar – Rs. 2200–2800/sq.ft.

Vasai – Rs. 1500 – 2500/sq.ft.

Virar – Rs. 1800-2400/sq.ft.

MUMBAI REAL ESTATE - MAKE WAY FOR THE SUBURBS

Abhishek Kiran Gupta, Head – Real Estate Intelligence Services, Jones Lang LaSalle Meghraj

Internationally, suburban locations are formed and defined on the basis of road-travel time from the inner city. The concept of a parent city that spawns satellite cities is very distinct, with such satellite cities located anywhere between 25-50 kilometres from the parent city. Typically, such satellite cities are self–sufficient in almost all respects pertaining to lifestyle and social amenities.

This cannot be said for Indian suburbs, which must be seen in close context with their parent cities. Rather, Indian suburbs tend to be the results of peripheral and are extensions of the parent city that grow homogenously. The growth story being told by Indian suburbs is more about the absorption of demand that spills over from saturated and therefore often infrastructurally challenged central locations that are paradoxically overpriced.

In Mumbai’s real estate scenario, the suburban landscape has its stars as well as bit players that are gearing up for centre stage.

BANDRA (W)

Among the stars, Bandra (W) has always been considered an excellent location thanks to its high-end properties, sea link connectivity, good shopping and lifestyle embellishments such as restaurants and recreation facilities. It also boasts of a rather select array of schools and colleges.

Rates: Rs. 15000-45000/sq.ft.

KANDIVALI AND BORIVALI

Kandivali and Borivali are increasingly favored because of their budget properties and the fact that they have conveniences like shopping malls, educational and healthcare facilities and good train connectivity.

Rates:

Kandivali (W) – Rs. 4000-6000/sq.ft.

Kandivali (E) – Rs. 5500-7000/sq.ft.

Borivali (W) – Rs. 4000–6500/sq.ft.

Borivali (E) – Rs. 4000-6000/sq.ft.

MULUND AND VIKHROLI

Mulund and Vikhroli are also budget locations that are relatively less congested than areas of Mumbai. They have the advantages of good road and rail connectivity to the hinterlands and also town-side, as well as a suitable bouquet of shopping malls and hospitals.

Rates:

Mulund – Rs. 4500-7500/sq.ft.

Vikhroli – Rs. 5500-7500/sq.ft.

THANE

Thane ranks high on general infrastructure, affordability in terms of properties by reputed developers, and the fact that it is its own workplace catchment on many levels.

Rates: Rs. 3000-6000/sq.ft.

NAVI MUMBAI

Navi Mumbai is a planned city with good infrastructure and its own distinct culture and lifestyle. Property rates are favourable, and there is a good range to choose from.

Rates:

Vashi – Rs. 3500-5500/sq.ft.

Kopar Khairne – Rs. 3000-3500/sq.ft.

Airoli – Rs. 2500-3500/sq.ft.

Sanpada – Rs. 3000-4000/sq.ft.

Nerul – Rs. 3000-4000/sq.ft.

Kharghar – Rs. 2500-4000/sq.ft.

Kalamboli – Rs. 2000-2400/sq.ft.

Panvel - 2000-3000/sq.ft.

Mumbai’s suburban growth potential does not end with the currently established locations. The area beyond Panvel is developing rapidly, with a hallmark being Reliance’s Maha Mumbai mini city project. There are also many other developers in the fray, and this area is eventually bound to emerge as a suburb in its own right. Kalyan and Dombivili are increasingly becoming connected to the rest of Mumbai and will figure high on the radar before too long. Bhayander, Nalasopara and the Vasai-Virar region are also ramping up to become extended suburbs of Mumbai.

Rates:

Dombivali – Rs. 2500-3200/sq.ft.

Kalyan – Rs. 2500–3200/sq.ft.

Bhayandar – Rs. 2200–2800/sq.ft.

Vasai – Rs. 1500 – 2500/sq.ft.

Virar – Rs. 1800-2400/sq.ft.

PUNE RETAIL – STATE OF FLUX

Anand Dutta, Head (Retail) Pune, Jones Lang LaSalle Meghraj

Over the last three to four years, Pune had seen considerable growth in the IT sector, placing it close behind Bangalore and on par with Hyderabad. In the same period, the retail sector has ramped up to introduce a number of malls in response to the increased spending power and demographic changes.

The 2004 phase gave a defining new face to Pune's retail sector. Today, there are many malls being planned - however, thanks to the economic slowdown, we expect many of these to see only partial occupancy until matters improve.

Currently, Pune's retail-scape accounts for approximately 5 million square feet in terms of both organized and unorganized retail. As the city expands towards the Eastern and Western belts, there are about six 500,000+ square foot malls under construction or in the development stage. The main focal areas of retail development are now clearly Kharadi, Hinjewadi, the Pimpri-Chinchwad region and other peripheral areas towards Kothrud and Bhugaon.

Pune's retail catchments have been enlarging in tandem with the growth in its demographic profile. The city is now spreading across the Eastern and Western corridors. There are about 4-5 townships of over 100 acres each planned in the city, and retail would be an inherent component of each of these. The scheduled townships will open up new frontiers, as will the proposed international airport.

RETAIL DEMOGRAPHICS


If we include the Pimpri-Chinchwad region, Pune houses about 50 lakh people in the average age group of 25-45. The average per capital income in Pune is about 40,000 rupees per head per annum, which comes to around $800 dollars per annum. However, the average figure does not give an accurate picture - we must keep in mind the fact that income-earning capacities are very disparate, with certain classes earning much higher incomes.

Traditionally, the primary shopping orientation in Pune is towards the meeting of daily needs, with a decidedly bargain-focused viewpoint beyond that. In this category, there is an high level of loyalty towards certain brands and smaller outlets. The newly aspirant class of shoppers is, however, growing in numbers and share of voice, and the city's retail profile is changing accordingly.

Today, Puneites see themselves on par with other metros in terms of aspiration and spending capabilities. However, in the recent past, the aspiration levels have dropped more or less in proportion to the caution introduced by the economic slowdown prevailing in the rest of the country. In terms of shoppers' profile, the city has seen fast evolution in taste levels, and there is now a distinct segment of buyers who prefer high-end brand products.

ADVANTAGES OF PUNE’S RETAIL SECTOR:

• The IT sector and the fact that Pune is a traditional automobile manufacturing hub will continue to provide impetus to the city's retail sector.

• New town planning regulations in Pune will now result in the highest per-square-foot parking in shopping centres anywhere in the country.


ISSUES FACED BY PUNE’S RETAIL SECTOR

• Lack of funding and slow economic growth are definitely impacting the retail sector in Pune. Retailers are not able to expand their presence, which in turn affects mall development. The mall rental debacle also needs to be sorted out - a wider acceptance of the revenue-sharing and minimum guarantee models would be a significant step forward all around.

• Infrastructure availability in Pune can currently be pegged only as moderate.. Like most other cities that grow organically, Pune is catching up with its infrastructure requirements retrospectively to the fast rate of development, and there are certainly lacunae. There are distinct gaps in the overall approachability to new developing areas. This puts retail developments coming up in these areas at a disadvantage.
• The way forward is clearly in the form of extensive road widening, more flyovers and also the proposed Ring Road that will connect Kharadi, Hadapsar, the Expressway and the PCMC area. These developments would improve internal travelling ease and also open up the fortunes of the new retail catchments.

• Road widening needs to be put on a faster track. Doing so would help sort out the various connectivity issues the city currently faces, and this would be a major boost for both existing and emerging retail catchments.

CAN CORPORATE INDIA ACCOMMODATE WHISTLE-BLOWERS?

Anuj Puri, Chairman & Country Head, Jones Lang LaSalle Meghraj

With globalisation comes the global way of doing business. Whistle-blowing is a side effect of this, and one that has gained prominence in the recent times. In India, whistle-blowing was traditionally not seen as a very conducive activity to be engaged in, even in cases of fraud, health/safety violations and threats to public interest. The reasons - a fear among potential whistle blowers of losing their jobs, being demoted or souring workplace relationships. There is also India’s chronically challenged status with regards to timely justice.

HOW MATURE ARE WE?

There now exists the Whistle Blowers (Protection In Public Interest Disclosures) Bill, which was introduced in 2006. This was formulated to give protection to informing parties against criminal or civil liability, departmental inquiry, demotion, harassment and discrimination. The bill does provide a degree of security to whistle-blowers. However, considering the general lag in legal action and the many inconsistencies in the appeal system, its enactment is not always guaranteed.

Much therefore depends on the code of ethics, if any, being implemented by the company. Ethics are, in fact, the key differentiator today in this and many other respects pertaining to market credibility.

By and large, many Indian businesses, even some of the large ones, are run by families, and loyalty in all circumstances is expected. Where a company is run on a charter based on global best practices - Jones Lang LaSalle and some others number among these - the employee is protected by an inflexible and fair code of corporate ethics. Companies like Jones Lang LaSalle have historically taken impeccable ethics as the only possible standard, considering the fact that India is considered low on the Real Estate Transparency Index to begin with. Thanks to a decade-old global ethics policy that is documented and constantly updated, this company adopts fair practices not only in context with employees but also with vendors, clients and competitors.

THE EFFICACY OF THE LAW

As things stand now, the law would offer a certain degree of protection in cases that have garnered a lot of media coverage and are now in the public eye. The recent Satyam scam would be a case in point.

Overall, the Indian law system still lacks consistency in verdicts on cases of such nature. In my opinion, the legal process in such cases should be expedited by a specially appointed tribune and not by generic judges. As of now, India is not equipped on these fronts, and the employee’s protection in cases of whistle-blowing rests almost entirely on the ethics of the company.

THE ROLE OF CORPORATES

We are not alone in this, of course. The Indian scenario is not very different from that seen in other developing nations, or in Asian economies in general. In these countries, large corporates are often seen as entities whose activities and objectives are at odds with those of the common man. Unless the fraud is extremely large and apparent, the informer is invariably seen as a traitor and is treated accordingly, even if the facts of the case reveal that he or she acted for the greater good.

However, in recent times, whistle-blowing is emerging as an indication of maturing transparency and fairness that many of the leading corporates are embracing. Corporate India has been waking up to the fact of financial irregularities for a while now, and the Satyam affair was just the most prominent in recent times. On the corporate level, individual systems to encourage a positive flow of information on negative trends are now being put in place in many companies that deal with global clients. For instance, Jones Lang LaSalle has a permanently designated Chief Ethics Officer and a team of ethics officers constituted to manage and evolve our Ethics Program. This assures employees as well as all other stakeholders of complete fairness in all dealings. In fact, we run case study-based workshops in our corporate offices worldwide to educate employees regarding ethical behaviour.

This country is still emerging into higher transparency levels, and it may take a while before the ethical parameters being pioneered by such companies are adopted across the board. The required levels of transparency and fair play would require companies to put certain proactive and protective systems into place. The 24x7 online reporting facility - website managed by a professional, independent firm and available for any possible ethics violation – has helped this company to establish and maintain such levels. We believe that the current pressures for accountability and transparency now increasingly being felt by all major corporates in India will eventually necessitate the universal adoption and implementation of similar measures.