February 2021

Paarth Republic – the only planned township on Kanpur road

Modern life is busy and full of stress. With the advent of web and mobile telephony, it has become extremely difficult to keep our personal and office time completely separate. The increasing globalization in every job is also overlapping time zones and is bringing a new dimension of stress. Thankfully the town planning has kept pace and ensured that there are separate zones of actions for different kind of activities. Paarth Republic township on Lucknow Kanpur highway has used these concepts of planning to make life for its residents peaceful and enjoyable. This is also the largest township on this side of town, which brings its own unique advantages.

Paarth Republic - the only planned township on Kanpur road

Let’s first understand as to what is meant by a planned township. A planned township is any community that was carefully planned from its inception and is typically constructed on previously undeveloped land. This contrasts with settlements that evolve in a more ad hoc and organic fashion. We have all seen the chaotic life in unplanned and organically developed residential clusters of Lucknow. Places like Alambagh or Krishnanagar are an example of this life – with no plans and regulation, one can see a commercial development next to a residential one without any concern for privacy of residents. A planned township is an antithesis to this. There are separate zones for residential, commercial and recreational activities. This ensures providing all the facilities without compromising one’s privacy.

The concept of town panning is as old as civilization. However, most parts of Indian cities emerged from expansion of old villages or towns. This resulted in haphazard development. However, some of the cities like Chandigarh, Lutyens’ delhi, Noida have been planned developments with clearly marked zones for different type of activities and a planned infrastructure. However, cities like Lucknow have been deprived of these advantages. Some developments of this kind have come up near Gomti nagar, however on Kanpur road, Paarth Republic is the only development that uses the modern concepts of town planning to ensure it is a premier most township not only of this area but in entire Lucknow.

But what are the advantages of a planned township living. A township living ensures that all the basic requirements of a peaceful and happy life are made available in a fashion that protects individual choices of all residents while offering them advantages of community living. The residents, therefore, don’t have to worry about basic requirements of living. There are markets inside the township to meet everyday requirements of provisions and medical facilities to take care of any eventuality. A clear demarcation of each residential unit and written rules about what modification are possible, make sure that there are no unnecessary disputes among neighbours. Clearly planned and marked parking areas ensure that there is sufficient space for parking and avoids any disputes which is a huge trouble in city areas now a days. The areas of recreation facilities and clubs etc are created a bit off from the main residential areas ensuring no disturbance to sleep of people living here. All this goes on to make life happy and satisfying.

Indians have been flocking to buy houses in large planned townships, especially in post pandemic era. Paarth Republic is seeing a continued traction for its offering and has limited units left to be sold.

Infrastructure development in Kanpur road area

Lucknow has been growing fast over last decade and has been a leading non-metro town when it comes to new developments. While infrastructural developments are happening across the city, the progress in Lucknow-Kanpur road area is quite rapid. And it is quite appropriate considering that this road connects the two most important cities of UP and it has the fastest growing airport east of Delhi airport. The metro connectivity to other parts of city from here ensures a quick and efficient transport system.

Till a few years back, Kanpur road area was not considered to be appropriate for luxury residences. The city was gravitating towards Gomti Nagar and further towards Raebareli road. Amausi airport had not received any expansion for years and connectivity from this area to rest of the places in the city could at best be described as patchy. The ongoing metro work was a nuisance and it was not easy to visualize the advantages of this network in future. But as Lucknow started growing and airfares in India started coming down, people took to air travel in droves. The airport was expanded and international flights were started. Just to understand it, let’s look at some of the statistics. The footfall at Amausi airport increased from 23 lacs in 2013-14 to 47 lacs in 2017-18. Also, as the metro started operations, people realized the efficient mode of transport it provided and suddenly this whole area near the airport was in focus. There is an ongoing project of an elevated road connecting Shaheed path to airport.

As the metro network keeps getting expanded, new infrastructure developments started taking place in the area. A new integrated terminal building at the airport was started with an outlay of roughly 1400 cr. And is progressing fast. The Lucknow- Kanpur highway was also upgraded and is now a congestion free road, further paving way for making driving smooth here. Another big infrastructure project that has been announced in this area in Sep’2020 is the setting up of India’s largest start-up incubator center opposite Amausi airport. This is planned to be a 2.5 lac sq ft facility which will be set up by Uttar Pradesh electronics corporation and probably be built and operated by Software Technology parks of India (STPI), a central government agency.

As expected, this area is witnessing a rush of private projects also as government projects are reaching their completion. There are new industries being set up and a number of residential projects are being launched. As Amausi airport expands and new integrated terminal starts operation, this area will also become a large transit center for travelers from across Uttar Pradesh. Considering that, a host of new hospitality projects are being developed in the area, which will improve the traction even further. Though most of the residential projects in the area are very small in their scope and are not well planned, the Paarth republic township is sure to meet the expectations of new age investors and renters. As a result, the prices are moving up in this community as rental yields are also expected to move north.

Why is RERA important

In India, owning a home is a dream most people savour through their life. There is only a small percentage of people who get to own their home. Most of us save our lifetime income for buying a home of our dreams. But before buying property lots of questions arise in buyer’s mind. Are we investing in the right location? Will the builder deliver what is promised? Is this builder an honest builder? What clauses should be there in a house buying agreement? To solve this problem the government has introduced RERA for home buyers. Let’s understand in detail as to what is RERA and what does it entail.

Before this regulatory act, some unscrupulous builders and developers of India had their own rules and regulations. The buyers were given almost no choice by such developers. While the buyer was paying for the property and this would be the biggest asset most of them ever invested in their lifetime, a lot of builders avoided sharing the important details with the customer. That is why Real Estate Regulatory Act (RERA) was introduced, to protect buyers’ rights on one side and builders’ payments on the other.

What is RERA

The Real Estate Regulatory Authority (RERA) is an act introduced by the Indian government in 2016. The main objective of this Act is to protect property buyers’ right and help them reach out to a regulatory body in case of any issue with the builder. The act also ensures that property buyers understand their responsibilities of payments and they protect a developer’s rights to ensure there are minimal disputes.

RERA has put forward clear guidelines regarding constructing and developing the real estate. This has brought a lot of transparency between buyers and developers and established a way forward in case of a dispute. As there are uniform rules created, it becomes easy for a buyer to compare different projects and understand detailed cost structure without the bomb of hidden charges exploding on him later on.

Importance of RERA

Indian real estate needed a regulation like RERA to add confidence in India’s Real estate sector. RE is a leading part of the economy and contributes to almost 15% of GDP. The act ever since initiated, has resulted in several changes in construction sector by bringing in transparency at every step and forcing all parties to fulfil their duties.

The act has brought clarity between property buyers and property developers thereby building the necessary trust between sellers and buyers. It has established state authorities in every state and has tried to do away with anomalies or malpractices in the sector.

Now RERA is helping home buyers in timely delivery of their real estate project. That is a great relief for homebuyers across India. It also is a great news for developers like Paarth Infrabuild, who have always kept the interests of customers at the center.

RERA has become a rule playbook for both seller and buyer of real estate that include the intermediaries also. The few provisions of act have made the following beneficial changes to RE selling:

  1. Uniform size definition

There is no denying the importance of the size of a unit when buying a property. Before RERA, every builder had his own way of defining unit size and was difficult for a buyer to understand the implication of various components shown for a unit size. However, with RERA, a standardised way of defining unit size has been propounded making the process transparent and trustworthy.

2. Penal interest rates

In RERA regime, in case of default in payment by the buyer or default in completion of the project by the builder, the rate of interest to be paid shall be the same for both parties.

Earlier it was very different. In case the builder used to delay the possession of property – the interest paid by builder to the home buyer was less whereas in case the buyer defaulted – the interest to be paid by the buyer to builder was much higher.

The RERA Act has now clearly specified that the interest rate shall be the same for both the parties, making the process fair.

3. Fiscal discipline for builder

A developer usually has several projects which are being constructed simultaneously. Earlier there was no restriction on builder to use funds from a project in the same project. All that has undergone a change now. This would now not be possible as after the introduction of RERA, the builder is liable to deposit 70% of the revenue collected for a particular project in an escrow account. He can withdraw from such account only on the basis of completion of project, which shall be certified by a civil engineer, architect and a chartered accountant in practice.

As the funds can now not be diverted to other projects and used for other purposes – this will ensure that the funds are used for the purpose only for which they are raised.

Pre-RERA, there have been certain cases wherein some rogue builders raised the funds from home buyers for constructing their homes but used the funds for buying land for the next project leaving this project in limbo. They later became starved of funds and were not able to complete the construction of the property.

As the funds can only be used for the purpose for which they have been raised – this will ensure that the funds are not diverted elsewhere and that the money is used for the purpose for which it is raised, thereby ensuring timely completion of the property.

4. Right to information

This has been another big change in RE sector. Retail customer often was not provided all the information and he had no way to force the builder to share the requisite information. However, RERA has clearly stated various information which should be provided in writing to buyer in the agreement as well as in the advertisement.

5. Grievance redressal

Grievance redressal was another area where buyer used to run from pillar to post to get himself heard without a positive outcome. Now RERA has ensured the establishment of an authority for grievance redressal in every state making life easier for a customer.

The biggest advantage of RERA lies in discipling a few errant builders and thereby making a level playing field for all developers. Institutional developers like Paarth Infrabuild, who has all its projects approved by RERA, and who have always been transparent to customers are major beneficiary of this act along with the end customer.

How good is Gomti Nagar extension for property investment

How good is Gomti Nagar extension for property investment

Lucknow has undoubtedly emerged as a real estate investment hub in last decade or so. While the whole city has seen increasing real estate activities, the localities on Shaheed path (Known as Gomti Nagar extension) have offered better returns and continue to hold their premium position. Let’s look at the reasons as to why this area continues to attract investors –

  1. Well planned development – Gomti Nagar and Gomti nagar extension are one of the largest planned residential areas of Uttar Pradesh. The whole infrastructure development in the area is new and has been planned well. This contributes to a more relaxed living for the residents of this area.
  2. Excellent connectivity – Gomti Nagar extension area is very well connected to the other parts of the city. It has proposed metro connectivity also. The airport and station are connected through special expressway, which avoids the congested city roads.
  3. Best facilities – The locality has everything that one can wish for in a residential address. Large green parks and sporting facilities including the Ekana international cricket stadium make this area very different from any one can think of. There are good shopping areas and largest mall of Lucknow, the Phoenix shopping mall. The concentration of good schools, including some international schools make it easy for families with kids. The heath facilities are top class and easily available. There are multiple opportunities for employment nearby including a software technology park.
  4. Affordability – The best part of housing in Gomti Nagar extension area is that despite wonderful amenities, the prices of properties are quite reasonable. Paarth infrabuild has two residential communities here, Paarth Arka and Paarth Aadyant. These are at the best location of this area and have affordable 3 and 4 BHK apartments. However, this opportunity for investors may be short-lived as the number of available units are limited.
  5. Appreciating value – In last ten years, ever since the Gomti Nagar extension area was launched, the prices have been appreciating annually here. In last few years, even when residential real estate stopped appreciating everywhere (and saw a downward trend in a lot of localities), the properties here have seen a consistent appreciation. This has been probably due to new infrastructure and amenities being created regularly. There is still good scope for property price appreciation here as people look for large units post pandemic and the price in nearby Gomti Nagar has escalated beyond affordability for most people. Therefore, those who are looking for property investment in Lucknow are heading here searching for right property.

All the above factors make this area very appealing for property investors as well as end users. The rental yields are also good and with multiple employment opportunities, it is not tough to find renters any time. Paarth infra build has two good projects, Paarth Arka, the highest building of Lucknow, beautifully designed by architect Hafeez contractor and Paarth Aadyant, a project where people are already living. The location and design of these properties have helped them take a premium position in this micro market and will hopefully help driving more customers to this area. 

Affordable homes on Kanpur road

India is a relatively young country with more than 50% of its population below 30 years of age. Youth comes with aspirations and with the world’s largest sub-30 year population, we are rightly called as an aspirational country. This has been clearly demonstrated in choices that this generation makes. Housing sector has also seen the manifestation of this in last few years. The youth of today are widely travelled and have been exposed to new lifestyle choices across the world. They, therefore, look for the same when buying a home. The average age of buying a home is coming down and with it the stress is on proving world class amenities at a price that is affordable for this buying class.

Affordable homes on Kanpur road

This dual challenge presents limited options for property developers. Providing world class amenities to a home buyer who is looking for buying a home in 16-30 lacs is quite tricky. This is the budget which youngsters have been looking out for their dream home in cities like Lucknow and they are disappointed with the currently available choices. That is where townships like Paarth republic fit the bill. With large township development, providing world class amenities becomes possible due to a large number of residents. Paarth republic has multiple housing options with their own personalities to suit different budgets and aspirations. For buyers, who are looking for a lifestyle at an affordable price, Paarth republic offers two options in the form of Canary and Humming retreat sub projects.

Paarth republic is a township planned and built with modern technology at the core. Use of state of the art methods has also helped it reduce the cost of acquisition for buyers resulting in a wonderful offering. The township is one of the largest in Lucknow and is situated bang on Lucknow Kanpur road. This ensures all-time connectivity to all parts of city as well as easy access to Kanpur and Unnao towns. The township has modern infrastructure to take care of daily needs of the residents like sewage, water, electricity and security. The most amazing part of this community is the recreational and sports facility. This is the only township in Lucknow which can boast of its own cricket stadium which can host 1st class cricket competition. The most modern cricket training here offers its residents a unique opportunity not available elsewhere in entire Eastern and central UP. The children play area, provision of modern clubbing facilities with Swimming pool and 3-tier security ensures a happy and stress-free life for its residents.

Affordability of homes with all modern facilities was always a challenge but Canary and Humming retreat projects within Paarth republic township has successfully overcome this. This has opened a new vista for discerning and aspirational customer at a price that he can pay. Various housing options within Paarth republic township meet requirements of different lifestyle requirements at different prices and make this project a one of its kind option on Kanpur road.

Foreign investments in Indian Real Estate

Owing to the contributions to the GDP, the Real Estate sector has assumed an important place in the economy. That coupled with the need for state-of-the-art residential and commercial projects, the sector further offers excellent opportunities for investors both from India as well as from outside India. The sector is also receiving excellent government support in terms of policies and regulations. The introduction of REIT as a vehicle that helps the sector raise funds and create more value for the stakeholders, has been cheered widely by investors. Beside, the realty in India now is 100% open for the Foreign Direct Investments.

Foreign investments in Indian Real Estate
Foreign investments in Indian Real Estate

The foreign investments in property sector in India have increased consistently since 2005, when the sector was opened. A bulk of these investments have come in post 2015, as the sector started offering good opportunities by bringing in more transparency. Of the total investments in Indian Real Estate through foreign investments of US$ 25 billion, US$ 16.6 billion has come post 2015. This shows the increasing trust of foreign investors in Indian real estate sector. This has also helped the sector weather the headwinds it faced during this period due to various structural challenges.

According to the data released by Department for Promotion of Industry and Internal Trade Policy (DPIIT), construction is the fourth largest sector in terms of FDI inflow. Real estate sector in India is expected to reach a market size of US$ 1 trillion by 2030 from US$ 120 billion in 2017 and will contribute 13% to the country’s GDP by 2025. Retail, hospitality, and commercial real estate are also growing significantly, providing the much-needed infrastructure for India’s growing needs. Indian real estate is expected to increase increased by 19.5% CAGR from 2017 to 2028.

While this gives an overall optimistic picture of the foreign investments in property sector in India, what can a home buyer take out from this information? Let’s look at what happens with the onset of foreign investment in any sector. First of all, the foreign investment flows in any sector, only when it is expected to grow fast in following years, allowing the PE funds and other investors to rake in large profits. Which can be inferred to be offering excellent returns in times to come. Another underlying fact is that these investments will help complete a number of stalled projects and release huge values that is currently lying locked therein. This can provide the proverbial push for growth to the sector.

Growth clearly is on the horizon when we see FDI rushing in a sector. However, one largely ignored but important fact from a retail buyer’s perspective is the transparency such  investments bring in the invested sector. That coupled with the fact that RERA is establishing itself well, will give the required peace of mind to investor and will draw in even more new investors looking for consistent margins. Lucknow is one of the property markets, which is on the radar of foreign investors and buyers in this market can hope to reap all the benefits associated with foreign investments.

Price Trends of Properties in Lucknow

While looking to buy a new property it helps to check as to how have the prices moved in a particular market. It is important to check this both for the larger city/ geography as well as for the micro-market where one is looking to buy a house.There are several institutions which release data on price trends for major cities in India, however, the one released by National housing bank as NHB Residex is used most often. There are price trend charts also available for different localities within a city as shared by various property portals like 99 acres and magic bricks. 

Lucknow is one such market that has continuously shown an upward moving graph for residential properties in all major localities of the town. A generally upward moving graph suggests that the city/ area is being favoured for buying property, while a downward graph is for a city/locality which is not being liked in general. Considering this, study of price trends could be a great starting point while zooming in to decide where to buy a property and price trend charts for Lucknow suggest a highly positive propensity to buy a residential property here.

Lucknow is one of the few cities in India, where the Housing Price Index has shown a strong positive movement both for constructed as well as under construction properties. Since June 2019, the quarter on quarter increase in properties has been remarkably positive and has touched almost a 10% year-on-year increase in certain localities. The neighbourhoods which have seen the highest annual appreciation in property prices are Gomti nagar, Gomti nagar extension, Kanpur road and Raebareilly road. This is very encouraging considering that prices in most of the cities across India have fallen in last 2 years.

This price trend becomes even more interesting when we look at it from the perspective that there is an increasing demand for bigger unit sizes post Corona induced pandemic. It is also important to note that Lucknow market offers excellent opportunities to buy in certain localities which are in and around Gomti nagar and Kanpur road area. Considering few good properties on offer in these areas and a favourable disposition to own these, it presents an excellent opportunity to invest here.

The onset of pandemic has also ensured that economies world-wide increased money supplies to reduce the impact of lockdowns on their economies and their citizens. This has resulted in increased flow of money in developing markets like India, which is sure to find its way into property market. This when coupled with the fact that the housing loan interest rates are at historically low levels, makes this opportunity even more inviting. A recent report from HDFC, the largest mortgage lender of India, also shows that with increasing salaries, the affordability of properties have increased substantially.

All these factors make year 2021 as the year of turnaround for property markets across major cities in India. Lucknow, which has not faced the heat faced by other property markets in last few years, is expected to lead the wealth multiplication in property investments. With a massive vaccination program underway and people looking to come out after a hiatus, the hope for economy doing better is on the horizon. If one scans the news, the new deals in properties are showing a firm and definite trend towards positivity. There are more people looking for property now compared to previous years, while the new supplies have not been created in last few years. All these facts will lead towards an impending property boom in near future.

Indian property market is at a point of inflexion right now. While we discussed about some of these factors in previous paragraphs, there is a larger play expected because of the various economic reforms initiated by government in last few years. There was a clampdown on cash transactions, which had hit the property sector adversely in short run. However, this is forcing more transparent buying and selling of property. Such measures always help improve the customer confidence and it will result in more customers getting encouraged to invest in property. Also UP RERA has been one of the most proactive regulator body. This is another measure which has helped improved customer sentiment. While this had a negative impact initially, as builders and customers were trying to understand its implications, RERA is expected to give new impetus to property market.

The structural demand for housing in India will continue to flourish in many years to come. A population which is still very young with majority of them just entering the employment creates ample requirement for housing. Various government incentives like Income tax waiver on one side and interest subsidy for small dwellings on the other are enticing buyers. While historically 37-38 years was the age when people typically bought property, with various incentives and increasing incomes is expected to push people in early 30s towards buying their own home.

There is absolutely no doubt that the money supply is increasing and we will see many large deals by private equity players in India. Lucknow as a market has emerged as a popular choice for multiple real estate players to offer residential properties. There has been  consistent improvement in infrastructural facilities in the city. All these factors are sure to support the structural expansion of residential property market of Lucknow. While property market is looking at a bright future, the expectation of a high growth regime is looking a certainty on the Indian horizon. IMF has predicted a 11.5% GDP growth for India for 2021-22. This will result in a never before seen expansion of employment opportunities and swelling incomes.

Paarth infrabuild has always ensured keeping its customers at the center and helped buyers derive value from their property purchases. With its residential developments in the fast appreciating corridors of Gomti nagar extension (Shaheed path) and Kanpur road, it is well positioned to deliver tremendous value for years to come. The price trends of these properties and micro-markets are encouraging prospective customers, which is driving a surge in enquiries.