Chakan, the affordable housing hub in Pune

There are good reasons why Chakan in Pune’s PCMC region has evolved into the thriving hub it is today. To begin with, this area enjoys superlative locational advantages, being in the middle of Maharashtra’s Golden Triangle and well-connected to Pune, Nasik and Mumbai. The growth of the IT, manufacturing, automobile and services industries in this region have all made Chakan one of the most vibrant locations on Pune’s real estate map over the last decade, says Sachin Agarwal, CMD – Maple Shelters.

Chakan is situated about 32 kilometers from Pune along the Pune-Nasik Highway. It is also in close proximity to the Pune-Ahmednagar-Aurangabad Highway and Pune-Mumbai Highway. The rapid industrialization here has led to vastly increased commercial activity, which has in turn resulted in massive demand for residential properties – particularly affordable homes – to house the proliferating workforce from its several existing and new industries across the length and breadth of Chakan.

With the highest demand is for affordable homes priced between Rs. 10-20 lakh, 1 BHK units are the fastest movers in this market. Despite their low budgets, home buyers in this market require and expect the benefits of modern amenities, provisions for recreation as well as medical facilities. Projects like Aapla Ghar are now addressing this specific demand for modern, well-appointed affordable homes in Chakan, just half a kilometer away from Chakan Chowk and with banks, markets, schools, colleges and hospitals within a 1-kilometer radius.

In the future, Chakan is going to assume increasing importance both as a real estate destination and an economic powerhouse. This area has been promoted to the status of Special Economic Zone by the Maharashtra Industrial Development Corporation (MIDC) and is one of India’s major automobile hubs. In fact, Chakan has production plants and manufacturing units for several national and international automobile brands, including Bajaj Auto, Mahindra & Mahindra, Daimler-Benz, Volkswagen Group and Mercedes-Benz.

Royal Philips Industry, one of the premier facilities for the manufacture of diagnostic X-Ray systems and other interventional imaging solutions, has been operational in Chakan since 2012 and creates several thousands of jobs each year. This area also houses a big production plant for Leoni, a German manufacturer of cables and cable system.

Forbes Marshall, a global boiler manufacturing company too had started out in India with its facility in Chakan. The total investment in this project so far has been Rs. 250 crore, and it generates a huge number of jobs each year. Similar investments have been made by Atlas Copco, Tetra Pak, IndoSpace, Mahindra Intertrade ARaymond Network, LMT Indi, L'Oreal, Bosch, MINDA, Pasco Ltd., Marriot International, Steelcase Furniture, Hyundai Construction Equipment India, Sany Group, Everstone Capital, Matheson K-Air India and many other leading industrial groups.

Because of the key role it plays in Pune’s economic growth, the city’s new airport is also being established near Chakan. This is going to intensify the investment and growth of the city, and the demand for homes there will eventually spread across all budget segments. However, affordable housing is and will remain the key requirement in this region, which depends heavily on lower-income workforces. Chakan will continue to generate jobs for such employees for several decades to come, and this will translate into sustained demand for affordable homes in this region.

Affordable Housing In India - Not Just A Distant Dream

Thanks to developers who are dedicated to boosting the supply affordable housing, there are precincts in the peripheries of larger cities such as Pune, Mumbai and Delhi where affordable housing projects are coming up, feels Sachin Agarwal, Chairman & Managing Director - Maple Shelters.

Is a home for everyone really an unreachable dream for India? This is a misconception born out of the massive hype about developers of more expensive homes generated in the media. In recent years, there has been a constant flow of debates about how builders specializing in flats to the well-heeled middle class should start addressing the requirements of the lower financial strata. In the bargain, the work being turned out by developers who are already doing this seems to get overlooked.

Despite various challenges that this segment of real estate development faces, affordable housing ventures have in fact been on the increase in the country. Of course, there continues to be a shortage of such homes in the larger metropolitan regions of Tier 1 and Tier 2 cities. The reasons are not hard to arrive at - land prices around these cities are high and therefore such projects often become unattractive for developers. 

However, thanks to developers who are dedicated to boosting the supply in this segment, there are precincts in the peripheries of larger cities such as Pune, Mumbai and Delhi where genuinely affordable housing projects are coming up. These developers are carrying on the work of providing truly affordable homes to the 'bottom of the pyramid' even as larger players complain about the rising costs of land and construction. 

Where there is a will, there is always a way. Contrary to common belief, there are indeed ways to build truly affordable housing projects without compromising on construction quality, good amenities and even unit sizes. The problem is that most large developers either do not know how to achieve this, or are unwilling to enter this segment because of the lower profit they would make.

Here is a startling yet true market fundamental – it is possible to build projects that provide perfectly good homes in locations where they are needed, with price tags that would astonish most people. People are buying these homes with modest budgets of Rs. 10-20 lakh.

Nor do these projects have to lack amenities such as swimming pools, community halls, club houses, lawns, children’s play areas, gymnasiums, badminton courts and senior citizen facilities. These are completely equipped and decent-sized homes that offer their residents all the comforts and conveniences of much costlier projects.

Unlike the larger names in the industry, the developers of these affordable housing projects leverage their connections and market knowledge to build housing for those who need it the most. They make up for the smaller profit margins by building their projects with more units. Land is either acquired under various available government schemes or under agreements with locals who are eager to see their areas developed along modern lines.

Another method that these developers employ to manage their project costs is to consistently buy construction materials in bulk from the same suppliers. This ensures consistency in quality of these materials, and also the leverage of goodwill with these suppliers to ensure steady procurement. Thanks to the steady delivery of their projects and the huge demand for such budget homes, they are able to maintain healthy financial churn to support further projects.

In other words, even today, there are indeed developers who are making the seemingly impossible dream of the less privileged to live in their own homes come true. These developers are genuinely serving the needs of the people by believing in and upholding the motto that every Indian should be able to own a decent home. 

So far, the encouragement that these developers receive to carry on their work has been mostly from the very people who need and buy these homes. However we are now looking at a time when the government itself has committed itself to take up this cause and spread the attainment of this dream throughout the country.

In the latest Union Budget, the Finance Ministry has made significant provisions for this sector. In the first place, it has reduced the FDI standards for minimum built-up area for affordable housing. Also, Rs. 4000 crore have been allocated towards the creation of low-cost homes. This is exceptionally promising for the affordable housing sector. Thanks to these incentives given by the budget, and we should see increased project announcements within this segment before too long.