Pune’s changing industrial landscape and its impact on real estateJune 13, 2012 / By
Would anybody have ever imagined that a place known for its soothing weather, tranquility and as being the cultural capital of India would also become known for its large contribution to India’s growth story? Perhaps not. Although industrial development dates back to the 1960s when mechanical engineering units set up their bases in and around Pune, the economy didn’t really begin to open up until the early ‘90s with the advent of LPG policies (Liberalisation, Privatisation, and Globalisation). When this was coupled with the availability of a humongous pool of energetic and talented employees supplied by the various local educational institutes the city grew at a rapid pace. What makes Pune so attractive and popular is its blend of cosmopolitan culture, good weather, proximity to the business capital, and its slower and quieter pace. The city has also gained popularity as a second-home or weekend-home for industrial tycoons and celebrities as it is not too far away from Mumbai to be inconvenient. As one of the three vertices of the GOLDEN TRIANGLE PROJECT Pune has witnessed an enormous influx of investment and new industries and the creation of huge numbers of jobs across all sectors. This has helped the city establish itself on the map as one of the most preferred locations in India for many giant international companies.
Industrial development has been the major economic driver for Pune for a long time, and over the recent years several companies from other sectors have established themselves in the city so that it is now also known for IT / ITeS, pharmaceutical and biotechnology businesses.
The year of global turmoil, 2009, saw a steep spike in operational costs in many countries and it made sense for companies to invest in places where labour costs were lower. This led to the emergence in Pune of new industries with the city attracting automobile giants such as Volkswagen and General Motors which both established manufacturing units in the Chakan area.
Once the LPG policy came into effect, a number of local as well as MNCs set out to attract the best talent they could find by offering handsome salaries and remuneration and this sudden spurt in income and improved lifestyle caused the recipients to look around for investment vehicles. One of the most lucrative of these for the last decade has been real estate, both commercial and residential. The emergence of the industrial sector in the city has increased real estate activity in the city, particularly in the fringe areas, but the majority of the developments there target middle-income earners.
As we all know, there is a direct correlation between industrial development and real estate growth and hence areas such as Pimpri-Chinchwad, Talegaon and the Chakan belt, Sanaswadi, Pirangut, Shirwal and Ranjangaon, where a variety of goods such as commercial vehicles, locomotives, electronic consumer durables, pharmaceuticals and a number of intermediate goods, are manufactured and assembled have seen unprecedented real estate development. Other factors have been a stable real estate market and realistic prices.
What we have seen in terms of growth and development is just a tip of the iceberg, promising more than what it has offered until now. Also, real estate growth needs to be supported by local, state-level and central government policies along with a huge investment in infrastructure. Hence, it is pertinent to mention the last stanza of a poem by Robert Frost titled “Stopping by Woods on a Snowy Evening” which I like very much.
The woods are lovely, dark and deep
But I have promises to keep
And miles to go before I sleep,
And miles to go before I sleep.
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