Located between Mumbai and Pune, Lonavala has always been a popular destination for a weekend and a second home for both cities. It is likely to become a satellite town for both Pune and Navi Mumbai in the future. Given the economic activity and employment generation in Navi Mumbai, Lonavala can mature from a weekend getaway into a residential investment hotspot and end-user-driven market. Once the Navi Mumbai international airport becomes operational, Lonavala would benefit from excellent air connectivity.
Due to the demand for training centres from corporate houses in Mumbai and Pune, Lonavala is already home to several corporate training centres.
Lonavala has excellent boarding schools, spiritual retreats and alternative medicine centres, and is also a well-established senior living destination. The town has become a preferred choice for celebrity events and conferences, and is also a popular venue for marriages.
A number of young families have made Lonavala their home, since it offers a good quality of life and a decent commute to both Pune and Navi Mumbai. The current trend for new residents is to rent accommodation first and then buy homes.
Therefore, Lonavala, situated only 53 km from Navi Mumbai and 55 km from Pune, assumes importance.
Market activity
Given these dynamics, it is only a matter of time before Lonavala becomes an end-user-driven residential market. Several notable Pune and Mumbai-based developers have already launched projects over the past couple of years to leverage rising residential demand in this hill station. Prominent names now targeting this region include Tata Housing, Kalpataru, Puranik, Ajmera and Lakhani.
Over the past two years, the average year-on-year appreciation for residential real estate prices has been in the range of seven to nine per cent. Currently, residential property prices range from Rs 2,800 to 4,000 a sq ft.
The average rental rates in Lonavala are less than or on par with a few locations in Mumbai and Pune. In Pune, rents in areas such as Hadapsar, Viman Nagar and Nagar Road range from Rs 14,000 to Rs 18,000, and the travel time to Hinjewadi is more than one hour. As an alternative, it is possible to pay a rent of Rs 10,000 in Lonavala and still benefit from a rational commuting distance to Hinjewadi.
Similarly in Mumbai, people paying rents in the range of Rs 20,000-30,000 and travelling to offices in Navi Mumbai can rent a home in Lonavala for around half the cost and still save on travelling time.
The writer is manager, research & REIS at JLL India
