8/13/2019 Integrated Townships in India - Today and Tomorrow - The Hindu

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Today's Paper FEATURES HABITAT

Published: April 20, 2013 00:00 IST | Updated: April 20, 2013 06:02 IST

Integrated townships in India - today and tomorrow

Rohan Sharma

By now, there is little doubt that integrated townships are the format of the future when it comes to city development.

What are integrated townships?

They are clusters of housing and commercial businesses with associated infrastructure such as roads, schools,hospitals, convenience shopping, water treatment plants, drainage and sewage facilities.

With urban areas getting more crowded and falling increasingly short on future development potential, integratedtownships have been identified as a potential solution.

Integrated townships are rather complex with more open areas and an emphasis on creating a sustainable livingecosystem with residential and commercial spaces supported by an infrastructure backbone of power, roads, water,drainage and sewage - a virtual living and breathing city.

With land being a State subject, different States have varying policies on integrated townships. While the norm for landrequirement for such projects is 100 acres, some States such as West Bengal and Rajasthan have relaxed theirminimum land requirement criteria.

Integrated benefits

There is a marked lack of residential density in fast-growing cities such as Gurgaon, and State Governments arepromoting integrated township projects by proposing the easing of development norms for such projects. This hascaused many developers to enter this segment of development.

DLF, Tata, Ansal API and IREO already have integrated township projects in various stages of development across themajor Indian cities like NCR-Delhi. HIRCO is creating similar townships in Panvel on the periphery of Mumbai, and inChennai. Omaxe, Parsvnath, Emaar MGF, BPTP and Kumar Builders have also announced multiple integratedtownship projects.

In Noida (NCR), developers such as Logix and Jaypee Group are developing golf-centric townships, in effect offering a value addition option to customers.

The new master plans for all major cities are looking at expanding the boundaries of their urban sprawl. These new development precincts would benefit significantly if the integrated township model were given high preference andincentives, since they provide a holistic living environment and prevent mushrooming of unplanned urban villages.

Over the next two to five years, most metros and satellite cities are likely to see increased launches of integratedtownship projects.

Tier-two cities and State capitals which see the population from the interiors gravitating towards them are also likely tosee such projects being launched. Though arriving at an exact number is challenging, it seems evident that at a few hundred such projects are likely to be in different stages of development over the next five-year period.

Private equity funds will show a marked predilection for targeting the residential portion of such township projects. Infact, many such investments are expected over the short to medium term.

8/13/2019 Integrated Townships in India - Today and Tomorrow - The Hindu

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8/13/2019 Integrated Townships in India - Today and Tomorrow - The Hindu

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With the focus of integrated townships towards creating affordable housing as well as infrastructure development, themodel is a prime candidate for being granted infrastructure status. If and when this happens, it will provide access tocheaper and more established sources of funds while also providing the kind of tax benefits to developers that areneeded to make this model of development more attractive to them.

The Central Government has already opened the doors for External Commercial Borrowings (ECBs) in integratedtownship development. This provides access to cheap sources of finance and has had a positive impact on this form of development.

Single window clearance has been a long-standing demand for the real estate sector. If implemented, it will greatly aid

larger projects such as integrated townships, as well.Local municipal authorities lack funds to undertake an urbanisation drive of any significant scale in the major cities. Insuch situations, integrated townships with a focus on development of ancillary infrastructure are a clear solution.Hence, financial incentives and faster clearances from State Governments are paramount requirements.

Rohan Sharma

(Senior Manager, Research and Real Estate Intelligence Service, Jones Lang LaSalle India)