Not sure if investing in a township is the right way to go?
As the real estate scenario in India evolves, the requirement for mixed-use development projects or townships are on the rise. Taking into account the economies of scale they offer, there is no doubt why they are becoming popular each year.
Townships are typically developed on the outskirts of established cities, offering self-sufficient infrastructure along with civic amenities, making them an attractive investment as well as living option.
What is a Township?
Even thought he township format of development has been around for a while its approach isn’t exactly unified. This means that at any point of time, one can find development projects spanning 25 acres to as high as 2500 acres being touted as townships. That said, there are a number of states in India, where the planning authorities have laid down key prerequisites for any development project to be considered a township. Besides the size of the land, there are a few other requirements to take into account such as width of the road, percentage of land used, etc that need to be met.
Furthermore, depending on how big the township is, the project is expected to also provide a certain amount of social infrastructure and facilities. For instance, all townships must have schools and basic healthcare facilities. For townships over 1000 acres must also provide a college. All townships are expected to provide a community room and library, but only mega townships are required to offer a recreational club. Projects that are larger than 1000 acres are the ones that are often referred to as “integrated townships” because of their self-sustaining nature.
Why Consider a Township?
Projects such as the residential township in Kanpur road Lucknow cater to critical challenges associated with urbanization in India. They are able to overcome the issue of unplanned development and overcrowding to provide an impressive quality of residential as well as commercial properties. This means that potential home owners, investors, banks, retailers, convenience store owners, healthcare service providers, eateries and a host of other establishments find it attractive to move here.
Value for Buyers
In India it is common to come across a number of locations that are ideal for real estate development but miss the boat because of lack of supportive infrastructure. Integrated projects such as the residential township are the perfect solution for developers as well as investors. Investors find great value in parking their money on property that comes with ready civic amenities right at the doorstep. Since the responsibility of upgrading the social and physical infrastructure of a township lies on the head of the developer, end-users do not need to wait around for governments to make changes that typically take years.
Integrated townships work because of the economies of scale that they offer. Since there is mass development taking place in an area, the per unit cost of development and maintenance tends to be relatively low. This makes it a win-win situation for developers as well as investors.
Here are a few other benefits to consider residential townships –
- Higher return on investment as there is simultaneous commercial development taking place along side residential projects.
- Since the locations are typically in the outskirts of big cities, the initial cost of development is lower as compared to a central location.
- Investors are able to benefit from a larger resale value of a property in a township as compared to a standalone residential or commercial building.
- NRIs especially see value in investing in townships that are easily maintained while away, while also offering a significant chance of value appreciation over the years.
Townships are typically considered to be low risk investments because of the low entry costs and larger potential of appreciation.