Compliance of city rent values in

accordance to Bid Rent Theory

- Pune City
Subject: Real Estate
Name: Shriya Yogesh Harshe
Scholar no. 2019BPLN001
Bid Rent Theory
 Bid Rent theory has been drawn on concept from microeconomics and is based on
the work of Alonso (1964) & Muth (1969).
 His model gives land use, rent, intensity of land use, population and employment
as a function of distance to the CBD of the city as a solution of an economic
equilibrium for the market for space.
 This theory focuses on how the land use patterns are determined by the land
values. these are further dependent on the transportation costs & accessibility.

Assumptions made to the model Criticism of the model

All persons involved in the bidding process have

No consideration of physical
complete information about costs at alternative
Geography
locations

Linear Functioning of Transportation cost to that of No consideration of Edge

Distance cities

All land is privately owned & there is evenly distributed What if there is Multi nuclei
population across the city instead of CBD

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 Location of Study Area
 Pune city is located in state of Maharashtra, India.
 Pune Municipal Corporation jurisdiction extends up to an area of
331.26 sq. km. housing about 7 million people.
 Population density of Pune is 12,777 persons per sq.km
 Pune City is also known as Cyber City, Education hub of India and
Cultural Capital of Maharashtra.
Valuation of Property in Pune
 Directorate of Town Planning & Valuation, Maharashtra State
prepares land use plans for the urban as well as rural areas.
 The department also carries out a valuation of properties and
prepares Annual Statement of Rates (ASR) for the state.
 The rates considered are published on the website of
Department of Registration and Stamps, Government of
Maharashtra
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 Property Valuation for Residential and Commercial Area

Distance from
CBD Price per Sq. Ft.
12 km Shastri Nagar 5821
9 km Aundh 10655
6 km Khadki 4783
3 km Ganeshkhind 10015
0 Pune City CBD 7664
3 km Swargate 8990
6 km Marketyard 9782
9 km Katraj 5379
12 km Sukh Sagar Nagar 5411

Distance from
CBD Price per Sq. Ft.
12 km Shastri Nagar 6283
9 km Aundh 15554
6 km Khadki 7047
3 km Ganeshkhind 15942
0 Pune City CBD 23327
 Higher rates of residential properties are observed in Aundh 3 km Swargate 13167
areas as it is closely located to the IT industry in the city. 6 km Marketyard 12944
 In case of commercial property, highest rates are observed in 9 km Katraj 8380

the Pune City CBD area. 12 km Sukh Sagar Nagar 8724

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 Property Valuation for Residential and Commercial Area
Distance from
CBD Price per Sq. Ft.
12 km Amanora Township 9849
9 km Magarpatta City 11203
6 km Koregaon Park 9735
3 km Pune Cantonment 8497
0 Pune City CBD 7664
3 km Deccan 11755
6 km Kothrud 11555
9 km Bavdhan 8212
12 km Bhugaon 7860

Distance from Price per Sq.

CBD Ft.
12 km Amanora Township 11100
9 km Magarpatta City 12000
6 km Koregaon Park 21155
3 km Pune Cantonment 21837
 Deccan Area has the highest price of property as it is located 0 Pune City CBD 23327
3 km Deccan 44068
close to CBD, but also provides a pleasant living environment.
6 km Kothrud 16163
 Deccan Area has the highest price of commercial property as it
9 km Bavdhan 13506
is newly developed area, people are preferring to open up 12 km Bhugaon 10179
commercial centers here.

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 Property Valuation for Residential and Commercial Area
Distance from
CBD Price per Sq.Ft.
12 km Baner 10427
9 km Pashan 9122
6 km Gokhalenagar 6068
3 km Shivaji Nagar 8333
0 Pune City CBD 7664
3 km Pune Cantonment 9335
6 km Fatima Nagar 7593
9 km Kondhwa 6353
12 km Undri 5971

Distance from
CBD Price per Sq.Ft.
12 km Baner 16480
9 km Pashan 14347
6 km Gokhalenagar 11360
3 km Shivaji Nagar 13860
0 Pune City CBD 23327
 Higher rates of residential properties are observed in Baner
3 km Pune Cantonment 21070
areas as it is closely located to the IT industry in the city. 6 km Fatima Nagar 12613
 In case of commercial property, highest rates are observed in 9 km Kondhwa 7710
the Pune City CBD area. 12 km Undri 7467

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 Property Valuation for Residential and Commercial Area

Distance from
CBD Price per Sq. Ft.
12 km Lohegaon 6819
9 km Viman-nagar 7525
6 km Yerawada 9735
3 km COEP Sangamwadi 8486
0 Pune City CBD 7664
3 km Erandwane 14168
6 km Karvenagar 9516
9 km Warje 6540
12 km Shivane 5370

Distance from
CBD Price per Sq. Ft.
12 km Lohegaon 8772
9 km Viman-nagar 12143
6 km Yerawada 23155
3 km COEP Sangamwadi 18530
 Erandwane Area has the highest price of property as it is
0 Pune City CBD 23327
located close to CBD, but also provides a pleasant living 3 km Erandwane 22416
environment. 6 km Karvenagar 16947
 In case of commercial property, highest rates are observed in 9 km Warje 9591
the Pune City CBD area 12 km Shivane 8760

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Conclusion: Residential Property

• For Residential Properties the highest prices are observed in the

radius of 3km 6km from the City Center.
• This is because, the Pune City CBD is becoming congested day by day
and people are preferring to away from the CBD.
• The areas located in the radius of 3 to 6 km form CBD provide
pleasant living conditions than the CBD area.
• Though the property values are comparatively lower beyond the 6km
radius there are some exceptions to this. They are:
• Magarpatta City: This township is a city in itself which provides all
the facilities like schools, offices, commercial centers in the township.
Therefore people working in this area prefer to live here.
• Amanora Township: This township is located closely to IT centers.
• Aundh, Pashan: These areas are influenced by the IT sectors.
• Baner: The Baner Area is very closely located to Pimpri Chinchwad
the twin city of Pune which has numerous Automobile Industries.
Thus, people working in this area prefer to live here.

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Conclusion: Commercial Property

• For Commercial Properties the highest prices are observed in the Pune City
CBD. The prices are quite high in areas located at a radius of 3km from the
CBD.
• The prices for commercial properties tend to reduce as we go away from the
CBD.
• Though, it is observed that the prices for commercial properties are on a
much higher side than compared to the residential properties in the city.
• Some of the Exceptions where the prices for commercial centers are higher
are:
• Aundh: The prices here are higher because there is no other commercial
center closely located to this area. Secondly, a lot of IT companies and
residential properties are developing in this area who need commercial
facilities for their convenience.
• Baner: The Baner Area is very closely located to Pimpri Chinchwad the twin
city of Pune which has numerous Automobile Industries. Thus, people working
in this area prefer to live here, therefore they require commercial facilities
nearby.

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 References:

• https://dtp.maharashtra.gov.in/en
THANK
Network Density YOU! TAZ = 134
of considered
50
• https://planningtank.com/settlement-geography/bid-re
Network Density = 2.68 nt-theory