SESSION 5B - ‘Reimagining Gated Communities’- Sustainable Mobility in Private Housing Developments

1. ANALYSIS AND SOLUTION- A Real
Estate Investor’s perspective
Senior VP and Head- Investments at LICHFL Asset
Management Company

2. Session 5B: Re-imagining Gated Communities:
Sustainable Mobility in Private Housing
Developments
ANALYSIS AND SOLUTION- A Real Estate
Investor’s perspective
Ashutosh K Hegde
EMBARQ-
CONNECTKaro
Mumbai, India, 16th April 2013

3. Presentation Flow
An unusual solution
Benefits of the suggested solution
ANALYSIS AND SOLUTION- A Real Estate Investor’s perspective
Executive Summary
PE perspective for township development
Need for alternate models
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Challenges for Walkers and Cyclists
Township Developments
Solutions for existing urban developments
Funding
Caveats

4. Executive Summary
 More efficient the transportation over long distances, more the choices
people has to locate their home and businesses.
 Conversely, spread out land use patterns increase the demand for
transportation because of greater travel distances.
 This has become an eternal cycle that we now find ourselves in, one that
is unsustainable in the long-run.
 Township Development offers an opportunity to integrate transport and
land use.
 Solutions are urgently needed for resolving transportation problems in the
existing urban development.
 Providing dedicated and secure cycle tracks and making the ride
comfortable and interesting could be a solution to the problem.
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5. Township Developments
Advantages:
Township developments are being seen as a sustainable model for reducing
motorized travel, which offers an opportunity to integrate transport and land
use.
Across the Country, Governments are introducing incentives so as to make
townships self-sustainable by granting higher FSI’s for mixed land uses to make
them independent micro centres of urban growth and incorporating housing
for economically weaker sections.
Townships provide an opportunity for balanced and planned development.
Integrated Township will minimize travel distance.
Provision of dedicated walking and cycling tracks along tree lined avenues
with refreshing green cover may overcome discomfort in our hot and sweaty
environs.
Challenges:
Aggregation and acquisition of large contiguous land masses required for
township is becoming increasingly difficult.
Township eligibility criteria dictate a minimum cut off area of 100 acres or
more to be developed by one entity.
Obtaining Statutory Approvals take a long time.
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6. PE perspective for township development
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Challenges Solution
1
.
PE funds have a shelf life, typically
seeking exit between 3 to 6 years
while township developments
take longer time periods ranging
from 6 to 12 years to complete
Government could permit consortium
development on the back of a master plan
wherein a large project can be divided across
multiple developers facilitating development in
a parallel mode with multiple PE funds and
multiple developers as compared to the current
series mode which entails one developer for a
longer project life.
2 Typical IRR expectation varies
from 20 to 30%. The carrying cost
of initial investment over time
increases resulting in cost
escalation of the housing unit,
making it unaffordable for the
economically disadvantaged.
Government could offers tax incentives for
township development considering their critical
role in cutting down on fuel cost and saving
valuable foreign exchange. This in turn would
enable lowering return expectations of
Investors.
3 Developers require funding at pre
approval stage while funds are
not comfortable to expose
themselves to approval risk.
Government could provide a dedicated single
window approval mechanism which would grant
approvals within maximum 3 months.

7. Need for alternate models
 Townships addresses transportation problems in new developments.
Solutions are needed to address the mobility issues arising from the chaos
in existing urban developments.
 Cycling and walking as a choice of travel is virtually non-existent in
existing urban developments.
 Choice of transportation modes provides more equitable access,
empowering the end users and result in improving liveability at our
existing urban areas.
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 The existing infrastructure does not address safety issues for walkers and
cyclists due to uncontrolled Interaction with other transport modes.
 The affluent sections taking up cycling or walking in a token manner may
not make a difference. The bulk of the population needs to be involved.
 Cycling and walking in the hot and often humid climate in the midst of
dust, noise and pollution is a daunting task.
 It will be challenging to replicate in our cities, success of cycling and
walking as a means of transportation in cleaner and cooler climates
abroad.
 How do we encourage and incentivise walkers and cyclists?
Challenges for Walkers and Cyclists

8. Solutions for existing urban developments
 Rapid mass transport systems like elevated or underground trains.
 Bus Rapid Transit
 Skywalks to cross major arterial roads.
 Dedicated and cordoned paths for walkers and cyclists alongside road
transport.
 Bicycles & even tricycles to be made available on hire which can be picked
up and parked at different locations, through a smart card, debiting users
on number of hours used.
 Cycles fitted with Power generating mechanism integrated with mobile
batteries.
 Cycles to be parked at docking stations with a power downloading facility
connected to a smart grid thus tapping the generated power and crediting
the rider for the power generated.
 Incorporate amenities like shower rooms, etc. to make bicycling user
friendly.
 For the model to be viable and self-sustaining, elements of real estate
may need to be incorporated.
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9. An unusual solution- Elevated Eco City
 The solutions is based on the assumption that subject to conducive
environment, the distance which an average walker or cyclist comfortably
negotiates at one stretch is 2-3 km. and 6-9 km respectively.
 An independent elevated route way for cyclists and walkers could be
explored where the system is designed in a modular grid pattern to enable
easy installation and dismantling.
 To overcome climatic discomfort of cyclists and walkers, the environment
inside the elevated route could be controlled using air diffusers and other
artificial means powered by roof solar panels.
 To improve user experience, integrate transportation with social spaces,
adding elements of entertainment, public spaces, retail outlets,
restaurants,, parks, rest rooms, guest houses and even office space along
the route to make travel not only interesting but the project self-funded.
 Elevated cycling and walking could also complement the rapid transport
system serving as the last mile connectivity and as feeder routes.
 In short it could be an elevated eco city with zero access for motorized
travel!
 Alternatively an option to provide dedicated bicycle tracks and walkways
alongside elevated rapid transport system can also be explored.
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10. Benefits of the Elevated Eco City
 End user cost benefit will chiefly consist of savings from replacement of
motorized transport.
 Considering average travel distance of an end user at 5 kms/one way/day
aggregating to 250 kms / month, for a travelling cost ranging from Rs.
1/km (for public buses) to Rs. 15/km; users could save between Rs. 250 ($
4.5) to Rs.3750 ($ 68) per month.
 Credit from power generation.
 Reduced health maintenance costs.
 Carbon Credits.
 The real benefit lies in reduced use of fuel and consequently a reduced
current account deficit!
 On an average assuming use of fuel @ 0.05 litres/km/person/day (fuel
efficiency of 3 kms/ litre for a Bus carrying 60 passengers), a 10 kms daily
commute would result in replacing use of 150 litres of fuel/ person/year.
Assuming that on a daily basis in Mumbai, 2 million citizen travel in the
proposed network, consumption of 300 million litres of fuel could be
avoided per year. Assuming basic fuel cost at say Rs. 25/litre, we avoid
burning Rs. 750 Cr. (135 MN. $ ) of fuel per year just in one city!
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11. Funding the Eco City
 Assuming construction cost at Rs. 40,000/sqm., one kilometre of elevated
route for 16 mtr. width would cost Rs. 64 Cr.
 Assuming space of 58,000 sft. rented @ Rs. 60/sft/month and advertisement
space of 22,000 sft rented@ Rs. 60/sft/month for a one kilometre stretch,
annual revenue could amount to Rs. 5.76 Cr or 1.05 MN $.
 Income from renting cycles ignored.
 ROI works to 9%.
 At a preliminary level, the elevated eco city model makes economic sense.
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Caveats
 Existing technology for converting pedal power into electricity is inefficient.
 How doe we handle aesthetics of an elevated carriageway which if done
insensitively could be an eyesore?
 Whether cyclists would be comfortable riding at an elevation from ground?
 How many people would be ready to bicycle to work?
 Unlike in cooler countries where cycling is a leisure activity or for health
reasons, whether in India after putting in a days work, there be an
inclination to cycle back home?

12. Thank You
hegde_ashutosh@yahoo.com;
The views presented are personal in nature.
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