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Operation Township
Financial Express [ 05-01-2014 ]

Till recently, buying a property called for some painful compromises. Budget restrictions meant you could only buy in specific residential areas, regardless of whether there were educational institutions, playgrounds, hospitals, shopping centres, connectivity to your place of work, or entertainment hubs in the vicinity, apart from availability and reliability of utilities like power and water. Real estate players were quick to recognise this and come up with a creative solution—townships.

Almost every day, newspapers feature advertisements for one township project or another, signalling a new trend, which has been hastened by the fact that the only available land for large-scale residential complexes these days is outside city limits. And, the only way to attract buyers to such comparatively remote locations is to provide integrated services in the township itself.

Indeed, integrated townships are the way of the future, offering more open areas and an emphasis on creating a sustainable living ecosystem with residential and commercial spaces, supported by an infrastructure backbone of power, roads, water, drainage and sewage. Essentially, they are extra-large gated communities, which have everything a family would need—from schools, hospitals, playgrounds and parks to offices, shopping complexes and entertainment centres—all within a protected area with private security to monitor access. Because they are outside city limits, they offer affordability, comfort, convenience, social integration, infrastructure and a contemporary lifestyle in an appealing package deal.

Several such townships are currently under development in the NCR, Ahmedabad, Mohali, Chandigarh, Mumbai, Bangalore, Chennai, Kolkata, Jhansi, Kanpur, Jalandhar, Ludhiana, Panipat, Sonipat, Jaipur, Saharanpur, Pune and Nagpur.

It’s clearly an idea whose time has come. Spiralling real estate prices are dampening demand, while existing residential projects are mostly in the suburbs or on the outskirts of cities, where facilities are sorely lacking. The trend to move away from the city limits is gaining pace and offering developers the chance to take a huge leap in building new integrated spaces. It also coincides with the average middle-class citizen’s search for affordable housing and better facilities. With the entire infrastructure in the hands of the developer—be it electricity, water supply, transport, or even green spaces for children—it seems a win-win situation for both the developer and house hunters.

Experts are unanimous in their view that this is a natural progression and a signpost to the future. Says Samir Chopra, chairman, RE/MAX India, an international property brokerage and analytic firm: “The concept of townships has emerged as a result of saturation of the main cities, where there is a scarcity of housing. In addition to this, the prices in the main cities are out of reach for the middle class. As a result, real estate developers have started creating integrated townships in the periphery/outskirts of the main city with all basic amenities, infrastructure and public utilities that a family needs. This is definitely a good substitute till the government takes a mass initiative to urbanise undeveloped areas.”

Shravan Kumar Govil, CEO-RFA (real estate specialist and financial advisor) at REPL, a project management consultancy firm, which specialises in urban planning and architecture, feels such a shift offers developers the scope of providing a wide product range to potential clients along with a complete range of facilities and infrastructure. “Townships offer a complete package to clients, including recreational facilities and large green areas, which adds to the value of homes and creates better living spaces,” he says.

Most prominent developers with a long-term view of the market are currently building townships, some are 50 km from the nearest city, but close to an industrial park or adjoining a highway. Townships by their nature are self-sufficient in all respects and those located near a highway provide access for those who work in the city. In most cases, like OneHub Chennai, they offer a walk-to-work option, thanks to industrial park zones that are next to the townships. The other advantage, especially for buyers, is that there are a range of residential offerings to suit every pocket, from apartments to townhouses and villas. The size also allows the inclusion of recreational facilities like golf courses, which require large, open spaces. In most cases, the homes are designed by a well-known architect who ties up with the developer for a series of projects.

Building townships is also a huge step up for developers in terms of scale, size and ambition, be it a commercial area or a range of residential offerings, from flats to exclusive luxury spaces, as well as building schools, hospitals and retail outlets. Says Ashish Jerath, vice-president, sales (Delhi and NCR), Emaar MGF: “Given the scale and size of such developments, townships add value to every development for a company.”

Large corporates are also shifting their focus to consider townships in such cities, which are rated high on maintenance, planning and features. Corporates can also buy or rent residential areas for use by their executives. In fact, one of the earliest townships to be showcased, OneHub Chennai, appeals to industrial concentrations, like Chennai’s auto industry, and is coming up in a location some 55 km from Chennai. This 1,600-acre park, built by Ascendas and a consortium from Japan, will house more than 60 Japanese companies and their employees once completed.

Developers are clearly sold on the idea. Says Pradeep Jain, chairman of Parsvnath Developers: “Township development as a concept was started to make life comfortable for the residents. Considering factors like lack of public transport, longer travelling time to the workplace and poor urban planning across most states; people are hardly left with time for other things in life. That’s where integrated townships come into play and provide all facilities like schools, medicare, sports complex, community centres, road network, electricity, water supply and management, shopping and entertainment facilities, garbage disposal and security. It simply makes one’s life very comfortable, which is encouraging people to invest in such projects. It also provides more scope for developers.” After OneHub Chennai, another joint venture between Japanese giant Sojitz Corporation and Motherson Group, India’s largest maker of automobile parts, is a 200-acre industrial park in Sriperumbudur near Chennai, which will house both Indian and Japanese companies across sectors like automotive, electronics and food processing. The JV is awaiting clearance from the government for the project since the official stand on such projects still remains something of a grey area.

 
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