Theme for a dream home
Rakesh Rai December 27, 2009
Remember the adage about Muhammad and the mountain? Real estate developers in India seem to have been inspired by it. So, if you have never been to Venice or England, don't worry, they'll build it for you here. As buyers become choosy, developers have begun to feel the need to differentiate similar projects, giving rise to a slew of integrated themebased townships. In the past three months, at least 10 such projects have been launched, the themes varying from a golf course or a lake to the more exotic ones that promise an Italian or a medieval English lifestyle.While the concept is not new, what has changed is that some of the newer projects offer affordable options too. The earlier ones like Omaxe NRI City in Greater Noida or Sahara's Amby Valley mostly targeted the affluent buyer. Now, the Jaypee Lake District project in Noida, which is part of a bigger 2,500-acre Sports City (and one of the 12 themes in the project), offers apartments ranging from under Rs 20 lakh to Rs 50 lakh. Similarly, apartment prices at TDI's Tuscan City project at Kundli in Haryana start from Rs 25 lakh. "Across the world, theme housing is based on the size of niche markets and their potential to pay. In India, however, their success lies in their 'pricing', at least in the present market conditions. Therefore, a project will sell only if it is good and offered at an attractive price," says Vineet Singh, business head of 99acres.com.
However, this may not be a trend for the long term because, according to some experts, the current market conditions have forced developers to target this segment as they need funds to get going on the projects. "A majority of the developers have launched affordable options first as these will give them the funds to start the project. As the project gets going and the market improves, there will be demand for more premium apartments. This is where the margins lie for the developer," says the marketing head of a prominent real estate company.
The themes have also undergone a change. Earlier, they were based on locations, and many still are. For instance, a place of religious importance like Mathura or Vrindavan would have most townships catering to this segment. Similarly, a riverfront development was sold as a theme in itself. However, recently, developers have started introducing global themes in India, irrespective of the location, with the help of architects from abroad. The Tuscan City project has tried to bring the feel of Italian lifestyle with fountains, water bodies, cobbled pavements and central piazzas, along with commercial spaces built like an Italian marketplace. The company hired architects from Tuscany, Italy, to design the township. Similarly, celebrated British architect Lord Norman Foster, who has designed the Gherkin, a London skyscraper, and Beijing airport, has tied up with Mumbai-based real estate firm, Neptune group. Mahindra group's real estate arm, Mahindra City, has roped in US-based architect and design firm, HOK, while Canadian firm, Forrec, the lead architects for Universal Studios, has tied up with Unitech. Bengaluru-based Vakil Housing is coming up with Vakil Hamlet (based on medieval English lifestyles) and Moghul Garden City (replicates the Shalimar Gardens), while Purvankara Builders is offering a slice of Venice in Bengaluru with Purva Venezia.
The trend is also getting a push from some state governments that are creating theme-based zones. The Haryana government plans to develop 13 theme cities along the 136-km-long Kundli-Manesar-Palwal expressway. These include cyber city, bio-science city, medical city, fashion city, entertainment city and leisure city.
The trend is also catching up in smaller, tier II cities like Indore and Raipur. A developer in Indore has recently launched a project along a lake on the theme of a hill station. Delhi-based Supertech will shortly launch a Sports City project in Meerut. "As city areas become more and more crowded and connectivity to the outskirts improves, people are willing to travel the distance for a more ambitious lifestyle," says Mohit Arora, director, Supertech.
Another reason for the success of such projects is the falling average age of home loan borrowers— from 43 years in 1999, it dropped to 36 years in 2004, and is expected to fall to 33 by 2010. This changing demographic profile is also transforming housing consumption patterns. So education, recreation, healthcare and transportation are seeing an increasing share in household expenditure compared to food, clothing and housing—all reflecting a migration to a better lifestyle and quality of life.
Whether you are planning to live or just invest in the project, the theme should be an add-on to the basic necessities such as proximity to workplace and access to educational or medical facilities. Any potential price appreciation will result from these. If you are an investor, keep in mind that most of these large-scale projects will come up in phases and it will take time for the entire plan to materialise. This means you may have to hold on for a longer period than you had anticipated before cashing out. Also, given the scale of development, there may be some deviations from the original plan. If you have been attracted by the affordability of the project, you need to consider the fact that the most affordable units may not have the best locations even though they may offer proximity. The track record of the developer and his past projects should also play an important role in your decision as the gestation period of the projects could involve longer completion timelines and bigger financial commitment from developers.
So, sift through the hype and check for substance before you sail off in a gondola.