Urban Real Estate & Development in India “Strategies for the Triple-Bottom-Line (people, planet, profits) Accountability”

Fulbright Report 2013Graduate School of Architecture, Planning & Preservation(GSAPP)Columbia University in the City of New Yorkhttp://www.columbia2013.wordpress.com

Nitin Narang, LEED APEmail: nnitin@gmail.com; Cell: +91-9711001507

Nitin NarangFulbright-Nehru Environmental Leadership Program Fellow, GSAPP, Columbia UniversityNitin Narang is an Architect, Urban Planner and Real Estate Professional with involvement in diverse projects in USA, UAE & India with a focus on sustainability. In recent years, Nitin has been involved in large scale urban developments with US based IREO Fund & M3M India Ltd, Gurgaon on their key real estate projects around National Capital Region in India.

Richard PlunzDirector, Urban Design Program, GSAPP, Columbia UniversityRichard Plunz is a leading figure in all aspects of urban design and is considered one of the world’s leading authorities in urban housing. Among his publications are many books, including A History of Housing in New York City, (1990, The Urban Lifeworld. Formation, Perception, Representation (2002); Eco-Gowanus: Urban Remediation by Design (2007), Urban Climate Change Crossroads (2010).

Geeta MehtaAdjunct Associate Professor, GSAPP, Columbia UniversityGeeta is the founding partner of URBZ, a think tank in Mumbai committed to developing online and community tools for "User Generated Cities. She is also the co-editor, with Prof. George Kunihiro, of the upcoming book "City Connect: Regeneration, Equity and Sustainability in the 21st Century".

Special Contribution:Vishaan Chakrabarti, Director, Center for Urban Real Estate (CURE), GSAPP, Columbia UniversityLynne Sagalyn, Director, The Paul Milstein Center for Real Estate, CBS, Columbia UniversityJagdish Bhagwati, University Professor, Department of International & Public Affairs, Columbia University

Sanjai Verma, Sudhir Jambhekar, Xerxes Mistry, Ramakrishna Rao, John Manoharan, Nayan Trivedi, Christopher Reynolds, Rashi Puri

Acknowledgements

• Indian real estate market is on a high growth curve in developing cities

• The Industry has evolved from a highly-fragmented and unorganized market into a semi-organized market

• 70 to 80 percent of the India of 2030 is yet to be built (1)

• Mostly Greenfield Projects – Development of satellite towns, expansions of cities, Special Economic Zones, Special Investment Regions, Growth Corridors, Transit Development

• Currently, the value of the investment-grade real estate under construction in India is estimated to be USD 173.9 billion (2)

Real Estate Industry in India

Source:1. Report, McKinsey Global Institute, India's urban awakening: Building inclusive cities, sustaining economic growth, April 2010

2. The Value of India Real Estate – From Sprint to Marathon, 05. Dec, 2012 By Hariharan Ganesan, Jones Lang Laselle

Zones of Real Estate Development - INDIA

Delhi - National Capital Region

2

3

4

LEGEND1-2-3 Delhi Mumbai Industrial Corridor3-4 Mumbai Nasik Industrial Corridor3-5 Mumbai Pune Knowledge Corridor

Mumbai, Pune, Nasik

Ahmedabad Kolkata

Hyderabad

Bangalore

1

5

Large number of greenfield projects around metro cities, tier-2 cities, industrial corridors, expressways, knowledge corridors, SEZs, SIRs etc.

Zones of Real Estate Development - NCRThe surrounding developments around metro cities are self-sustained cities but considered sub-urban, satellite town developments. The approach needs to be change to high density, mixed use, transit oriented development

New Delhi16 Million

Noida0.7 Million

Faridabad1.4 Million

Gurgaon1.5 Million

Size & Number of Real Estate Projects around Delhi - National Capital Region A Total Number of Urban Real Estate Projects 355B 5-40 Acres

Residential, Commercial, Recreational Projects215

C 40-100 AcresIntegrated Townships, Large Residential Community Developments, Group Housings, IT Park, Commercial Complexes

75

D 100-500 AcresIntegrated Townships, Comprehensive Developments

49

E 500 Acres & AboveMega Township

16

Size & Number of Real Estate Projects around Mumbai A Total Number of Urban Real Estate Projects 274B 5-40 Acres

Residential, Commercial, Recreational Projects144

C 40-100 AcresIntegrated Townships, Large Residential Community Developments, Group Housings, IT Park, Commercial Complexes

70

D 100-500 AcresIntegrated Townships, Comprehensive Developments

35

E 500 Acres & AboveMega Township

25

Number of large urban real estate that have city level impact have increased drastically in recent years (2013 data below)

Scale of Large Urban Real Estate Projects

Source:www.99acres.com; www.magicbricks.com & property brokers

Public Sector & Private Developers – Current Roles•The public sector is not able to cope up with pace of urbanization and the primary role has been taken by private players

•In many of the developments there does not exist public services or even access roads. The developers have done makeshift arrangements which are inappropriate.

•The Public Policies/ Planning Codes are outdated and based on low density sub-urban development

•Few of these projects involve comprehensive PPP developments including infrastructure, transportation, public facilities with support of public sector

•There is a liberalization in large scale projects where substantial flexibility is given to private developers in zoning, master planning and planning regulations. Many developers have taken advantage of this opportunity for profit maximization and compromise on social and environmental aspects of projects.

Nodes of Development & City Vision

Golf Course Extension Development$200/ SF

New Gurgaon$100/ SF

Dwarka Expressway$120/ SF

DLF Garden City 400 Acres

Vatika India Next 600 Acres

IREO City500 AcresEmaar

M3M

Ansal

Unitech

Ansal

DLF-2/3

DLF-1

DLF-4

DLF-5

The Master plans released by public authorities lack a broader vision and act only as land-use plans. The private developers with large land banks control the nodes of development

Example of Gurgaon City Development - Mulitple nodes have been created in recent years highlighted in red above.

Weak Public Policy, No Incentives & Investor Led Market•Successful cities like New York have been created through evolving zoning policy, positive role of incentives leading to an organized urban framework with a strong sense of place, public realm and social inclusion. •Upcoming developments in Gurgaon and around Mumbai lack urban framework, primarily based on profit maximization and create economic divide.

INDIA

UNITED STATES

• Lacks Comprehensiveness• No Community Role• Quick Returns• Maximizing Profit – Based

on a “Single bottom-line”

Development Process - Focused on Maximizing Profit

Strong Role of Community Required

Fundamentals of Urbanism & Sustainability

- Isolated Planning- Ignorance to surrounding developments - Height & Density- Walkable Neighborhoods- Public Spaces- Mixed Use- Connected Streets- Transit & Public Transport- Social Inclusion

Developers, Investors are accountable for long term impacts of compromise on fundamentals of urbanism and sustainability

B

C

D

E

F

A

C

D

B

A

F

E

Case Study - Current Developer’s Approach in India• Large projects are not done with a macro

approach – Divided into smaller saleable projects with product type that will bring maximum profit.

• Creation of economic divide – Luxury developments with extremely low density and excessive areas.

• Sold to investors right at the time of procurement of land without much design development

• Gated Communities – Introvert• Vehicle Dependent• Limited Possibility to Walk• Missing Public Realm• Smaller projects do not form a neighborhood• Lack of Public Spaces & “Sense of Place”• No Linkages to Public Transit• Lack Vibrancy – Mix of Uses

• Contradictions of Land use in adjoining projects

• Each Project tries to be a landmark – Lack of harmony

• Irregular Lands creating chaotic urban patterns –Projects are based on land procurement strategies.

DLF Golf Course City: 500 Acres DLF Township in Gurgaon (70,000 Population)

Developers - Current Approach in India

Tata New Haven, Vasind, Near Mumbai Godrej Garden City, Ahmedabad

Developers - Current Approach

Commercial Hub of Gurgaon - Cybercity

How can sustainability & diversity be integrated with profitability in real estate projects in India?

The Big Question

Creating Communities through Developers CollaborationHigher Sales Prices, Socially Inclusive, Diverse and Sustainable

MASDAR CITY, ABU DHABIFoster & Partners

PUBLIC TRANSPORTATIONKEEPING CITY COMPACT - LARGE SPACES/ UTILITIES INSURROUNDING

SOLAR FARM

URBAN FORM & CLIMATE

AUTOMATION & ENERGY USE

WALKABLE SIZE OF BLOCKS

CONNECTIVITY

Creating Communities through Developers Collaboration

HIGH DENSITY- LOW RISE

MASDAR CITY, ABU DHABIFoster & Partners

http://www.songdo.com/Uploads/FileManager/Songdo/Sustainability%20PDF/KPF%20Sustainable%20Designs.pdf

Mixed Use Pilot Project DevelopmentsHigher Sales Prices, Socially Inclusive, Diverse and Sustainable

NEW SONGDO CITY, SOUTH KOREAKPF

Mixed Use Pilot Project Developments

Conclusions and Strategies

• Current favorable investment policies and a good real estate demand needs to be combined with global standards of urban design in real estate for keeping the global investors interested in India and a quality life to residents.

• Public policies, zoning tools to be progressively updated to encourage a common vision and a meaningful direction in urban development.

• Incentives to be integrated with policy thereby leading to creation of robust social infrastructure and public spaces.

• Collaboration amongst private developers in a zone to form neighborhoods and create a “Sense of Place”

• Holistic approach that goes beyond project• Mixed Use, High Density, Transit Oriented

Developments

• Private developers to work on pilot projects and take advantage of liberalization in public policies for creating exemplary projects that will act as inspirations for other developing cities around the world.

Single-Bottom-Line ApproachFinancial Returns

Double-Bottom-Line ApproachFinancial ReturnsSocial Inclusion & Diversity

Triple-Bottom-Line ApproachFinancial ReturnsSocial Inclusion & DiversityEnergy & Environmental Design

Triple-Bottom-Line Accountability

Given that 70 to 80 percent of the India of 2030 is yet to be built, India has a unique opportunity to pursue its urban development with an integrated approach.The upcoming developments lack the basic urban framework and an approach that integrates profitability with sustainability and diversity. The public sector not able to cope up with pace of urbanization, private developers need to take a broader responsibility and accountability for a Triple-Bottom-Line delivering projects with holistic consideration for people, planet and profits.

Urban Design Lab was created in 2005 to address the need for a design-based approach to shaping the long-range future of sustainable urbanism. New York City and its regional context is viewed as a core model for solving problems related to sustainable urban futures everywhere, including Latin America, Asia, Africa, and Europe.

CURE identifies, shares, and advocates solutions for a rapidly urbanizing world. CURE redefines sustainability as dense, mixed-income, mixed-use, transit-based urban development. From climate change and energy dependence to the socioeconomic and political upheaval they engender, CURE addresses emerging and current global issues through the lens of urbanization.

As a center for research and thought leadership, CURE builds upon a platform of direct industry engagement through conferences, symposia, publications and consulting activities and undertakes a dedicated research agenda that advocates for design-intelligent urban development. Building upon CURE's intellectual foundation, the center offers GSAPP faculty and studentsa cross-disciplinary approach that integrates theory and practice to solve unique development problems. While largely New York City focused, CURE’s work in advancing environmentally, fiscally and socially responsible development has expanded to Brazil,China, Germany, Great Britain and Japan.

CONTACT:Urban Design LabCenter for Urban Real Estate (CURE.)Avery Hall, 1172 Amsterdam AvenueNew York, New York 10025Telephone: (212) 870-2779 , 212-851-0226Email:,ms3719@columbia.edu; cure@columbia.edu

Columbia University - Resources

For further information contact:

Nitin Narang (India)International Exchange Alumni, Fulbright Fellow 2012-13, United States Department of State

Cell: +91-9711001507Email: nnitin@gmail.com