Wednesday, October 31, 2007

Paranjape Schemes' Blue Ridge Township: Residential infrastructure for IT professionals working in Hinjewadi, Pune (1)

Why Special Economic Zone (SEZ) promoted by a real estate developer is destined to fail?

"A developer of SEZ with the mindset of a real estate developer is destined to fail!" says Mr Yogesh Ashar, who has recently co-authored with Mr Kanu Doshi ‘Treatise on Special Economic Zones’. Mr Ashar and Mr Doshi, both chartered accountants, are associated with Welingkar Institute of Management, Mumbai as faculty. Couple of months ago, i blogged their interview on my "Pune Real Estate Market News Blog". Here are excerpts from my blog.

Golden opportunity to exploit huge profits:

Because 75 per cent of land acquired under SEZ will be used for construction of houses, airport, trading and business houses and hospitals, SEZ looks like a golden opportunity for a real estate developer to exploit huge profits.

SEZ Developer:

Many developers of SEZs are afflicted with real estate syndrome. But SEZ under the present regime shall have to be a business venture in infrastructure development (as against real estate venture) with its own dynamics, if it is to succeed."

Blue Ridge: Integrated realty project:

Since the beginning, Paranjape Schemes made it a point to call 'Blue Ridge' as an 'integrated realty development' with 4 different parts: 1.IT/ITeS SEZ, 2.Residential apartments and villas, 3.A retail mall 4.A star hotel.

Assumption: Blue Ridge is SEZ:

According to Mr Ashar and Mr Doshi "SEZ promoted by a real estate developer is destined to fail" because the non-processing area by default is meant to serve the legitimate needs of the processing area of the SEZ.

Obviously, as per the 'broad' concept of SEZ, 'residential development of the Blue Ridge' is for the people working in the 'Blue Ridge SEZ', majority of the Pune Real Estate Market assumed. "SEZ will generate employment for 30,000 knowledge workers." was Shashank Paranjape's statement which supports this assumption.

Paranjape Schemes is going to construct flats for the people working in their SEZ was not at a threat or even a competition to the on going projects in Aundh Annex - Wakad, Pimple Saudagar, Rahatani, Balewadi, Baner and Pashan.

The Featured Shot, originally uploaded by Neville_S.

Integration with Hinjewadi!

But Paranjape Schemes integrated 3 parts of 'Blue Ridge', 1. Residential - 2. Retail Mall - 3. Five Star Hotel - with existing Hinjewadi Rajiv Gandhi IT Park. This was a big shock to all on going projects in these areas.

On the other hand, we all know, how people working in Hinjewadi welcomed Blue Ridge. But most of the builders don't accept this as a fact. Booking 1,500 flats on the second day of a launch and a waiting list of 400+ on the same evening is beyond any body's wild imagination.

Successful Positioning:

Blue Ridge is in Hinjewadi. But that is only a geographical fact. As a residential project not exactly a plus point. Conventionally not at all a desirable location. In fact, projects which are very close to Hinjewadi are selling slow, even today at ready possession stage.

Because Parihar Chowk, Aundh is the center of the residential area. Distance from Parihar Chowk matters more than the distance from the Hinjewadi. Projects which had reasonably good size, like Fivegardens (17 acres), Park Street (50 acres) and the concept of self sufficiency could not get away from the Parihar Chowk. When Comfort Zone in Balewadi claims to be in the 'West Aundh' but not in the 'East Hinjewadi' tells us as a residential area how unattractive Hinjewadi is.

Paranjape Schemes also had the same opinion and few weeks before the launch, were accepting bookings at the rate of Rs.2,800 only. Booking rate which was at par with good projects in Aundh annex and less than Baner Road.

In short, all credit goes to the successful positioning. In the next part, we will talk about how Paranjape Schemes sold this concept. Please, share your views and opinion in the comments.


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