RAVI AHUJA

Even as the economy witnessed a growth rate of 4.7 per cent during the third quarter of FY14, the Pune residential market saw a marginal decline over the previous quarter.

In the first quarter of calendar 2014, there were nearly 3,950 units launched in the city, a 4 per cent increase over the last quarter of calendar 2013. Approximately 80 per cent of these launches were in the mid-end segment.

This period also witnessed the launch of a few high-end projects spread across diverse locations such as Pimpale Nilakh, Viman Nagar, Salisbury Park and Law College Road. The NH4 Bypass (North) sub-market recorded a 33 per cent contribution in launch activity during the quarter.

High-end rental values remained stable across micro-markets from the last quarter. However, mid-end rental values, though mostly stable, registered a positive uptick of 2-3 per cent in Eastern, NH4 Bypass (North) and Kothrud sub-markets from the last quarter. Demand for projects along the NH4 Bypass (North) stretch and Eastern submarkets could mostly be attributed to interest from the IT and ITeS sector workforce. In Kothrud, this upswing was primarily due to the lack of new supply.

Launch of new projects at higher capital values led to an upward movement of 2-3 per cent in the high-end capital values across majority of the markets during the quarter. Similarly, in the mid-end segment, NH4 Bypass (North) and Baner saw a 6 per cent quarter-on-quarter appreciation, whilst Nagar Road, East and Pimpri submarkets also witnessed a 2 per cent quarter-on-quarter uptick.

In the near future it is observed that the capital values are likely to remain stable, primarily due to the pile-up of unsold inventory in the city. Although the enquiry levels have been consistent, conversion timeline is notably long. However, the numbers of new unit launches are likely to increase in the next two quarters due to launch of subsequent phases in many ongoing projects.

— The author is executive director, Cushman & Wakefield