Like other real estate development classes, plotted developments in all major cities, like Bengaluru, Hyderabad, Chennai, and Delhi, have also evolved in last 2 decades. Most of the residential plotted development in past were just provided basic infrastructure - overhead water tanks, electricity (overhead/ underground), sewage system and sometimes a club house. However, few of the club houses were maintained post handing-over of the project. Some developments after being sold remain as it is with no habitation and giving an impression of ghost development whereas few of them transformed into a thriving community.
There are different plotted developments – developed by authorities/ societies and private development companies. In private category, we have different grade of developments – Grade A properties developed by reputed developers with amenities and others primarily developed by smaller developers and focused more for locals, and low-ticket size investments.
Many of the development results into a thriving community and high appreciation. However, many plotted developments just remain as it is after decades of developments as well. We all wonder, why does this happen? There are 5 key attributes for a success of a plotted development - location, economic activities, amenities, specification, and property management. In this article we will dwell into this subject to create development of more meaningful.
5 attributes to transform a private residential plotted development into a thriving community:
1. Location & Accessibility
As we say in real estate it is Location, Location and Location. The same is true for residential plotted developments as well. If project is in proximity to a city and established or growing economic hub, it will attract end user to invest in the property. These development gets life faster and probability of transforming into a thriving community is high. As the key ingredient – People are available.
It has been witnessed physical infrastructure development drives growth of newer plotted developments. Availability of good infrastructure shortens the travel distance/time and makes the development more feasible for residents.
2. Proximity to economic activities, and social infrastructure
As mentioned earlier, proximity to an established/ emerging economic hub plays an important role in populating the plotted development project. As per our experience, plotted development located along the growth corridor gets populated at the speed of rise in economic activity. The affordability of people working in said economic hubs dictates the quality and premium of the plotted projects. Social infrastructure follows economic activities. To have a thriving community the location needs to have a required social infrastructure as well to support the needs and aspirations of the residents.
3. Development theme, amenities & activities
This is spine of a residential plotted developments. Many of the premium developments have different development themes, for example, roman classic, vernacular, and others. Two aspects of available amenities play an important role in creating suitable environment for thriving communities: type and activeness. Different types of amenities are provided including sports facilities, swimming pool, rooms, activity area and others. The more important part is how well it is maintained and reman active post completion of the project.
4. Product mix, specification, and landscape
Buyers are more aware now a days. They are more willing to invest in projects with good specifications: pavements, lights, site boundary and other features. Landscaping for entire project plays an important role in these developments. It accentuates the theme and increase livability in the project.
It is important that based on target segment and their ticket size, plot sizes need to be developed. For example, if the location supports the investment from affluent group and developer has decided to target this segment. The plot sizes need to be of bigger size. But the target segment is mid segment or affordable market the plot sizes to be determined accordingly.
5. Developer’s reputation and property management
Developer’s reputation supports branding of the project. It is well known fact that a project from reputed developers attract more interest from buyers and properties also appreciates higher and faster. Even exit for buyers in a Grade A project is easier.
As mentioned earlier, property management and keeping amenities functional is important aspect for community building. It is advisable to hire a professional firm for managing the asset post completion of the project.
Other factors: Guidance, communication, and regular activities to promote community
It is important to pay attention to listed parameters for developing communities. Further, many communities have guiding regulations for development of units by end users. It helps to create basic familiarity in the developments. But it is important to define these guiding principles carefully without restricting individuals’ aspirations. If the guiding principles are restrictive, one will find difficult to enforce the same.
Communication forms an important part post completion of the project. It helps to attract buyers to develop their property in near future. Property management teams need to organize regular activities in the development and developer to support in whichever way to motivate buyers to develop their plot.
Most of the plot buyers are investors and for them prime objective is capital appreciation and ease of exit. These two parameters are directly related to the parameters listed above. If any projects scores high on above parameters will qualify as good investment proposition for investors.
As per our market intelligence, a growth corridor registers capital appreciation between 8% and 15% per year over the period of 10 years of holding period. If one enters in beginning phase of growth, he/she can expect capital appreciation beyond 15% per year also.
It takes minimum 5 to 10 years to transform a plotted development into a thriving communities provided location and economic hub developments are developing fast otherwise it can take longer.