CHENNAI:
The South and West Chennai will continue to woo home buyers due to rise in Information Technology professionals and emerging good social and physical infrastructure, according to a report by CBRE, one of the global commercial real estate services and investment firm.
The report, ‘Resurgence of Chennai A Real Estate Perspective’ which was released by Confederation of Real Estate Developers' Association of India (CREDAI) Tamil Nadu president Ajit Kumar Chordia and president of CREDAI’s Chennai Chapter during the launch of CBRE PropFair states that South Chennai, which supplies about 60pc of residential supply, remains the most sought after location due to availability of quality residential options, affordability, ease of access to work place and emerging social and physical infrastructure.
According to the report, the second half of 2017 witnessed a decline in realty sector sector due to implementation of Real estate Regulatory Authority and Goods and service Tax. It said that bulk of launches witnessed during second half of 2017 was concentrated in the south and west Chennai markets and in parts of Old Mahabalipuram and GST Road.
Interestingly, to improve housing sales most of the developers offered discounts and special offers to prospective home resulting in marked improvement in sales. Many developers claimed that the sales of properties have touched double digits per month.
The report stated that South and West Chennai micro-markets continued to dominate housing sales during second half of 2017.
The city also witnessed increase in sales activity in North Chennai due to new project launches.
The report stated that 2BHK (800 to 1,100 sqft) units continue to be preferred choice of home buyers followed by 3BHK units.
The city also witnessed an increase in demand for budget apartments in the range of 600 to 800 sqft especially in the peripheral locations of south and West Chennai.
The report stated that 68pc of new launches are happening in South Chennai on Old Mahabalipuram and GST Road with 74pc of them concentrated on the mid-segement.
The report states that Pallavaram-Thoraipakkam Road and Perumbakkam in South Chennai, Mt Poonamallee Road in West Chennai and Perambur in North Chennai are likely to emerge as favoured destinations owing to close proximity to Central Chennai.
The report also states that the completion of Chennai Metro Rail first phase and the implementation of second phase, the proposed bus station in Kilambakkam and Bangalore-Chennai Expressway is likely to fuel the growth of Chennai’s residential market, the report added.
Why South Chennai:
1. It contributes 60 per cent of residential supply and demand of the city
2. The office space has 85 per cent occupancy
3. The capital value per square feet for prominent residential developments is Rs 4,000 to Rs 6,800 per square feet.
4. The major areas include Old Mahabalipuram Road (OMR), Grand Southern Trunk (GST) Road, East Coast Road (ECR) and other locations such as Velachery, Thiruvanmiyur, Adyar, Pallikaranai etc.
5. OMR the designated IT corridor of Chennai is witnessing extensive real estate development in commercial, IT and residential segements in the last 10 to 12 years
6. Madhya Kailash—Sholinganallur: The stretch is characterized by presence of numerous IT parks and campuses of large corporate. The notable property micro-markets include Taramani, Kottivakam, Perungudi, Thoraipakkam, Karapakkam and Sholinganallur
7. Semmenchery to Kelambakkam stretch: The 16km stretch is characterized by presence of large tracts of vacant land parcels and unorganized residential pockets in Navalur, Egattur, siruseri, Semmenchery, Padur, Kelambakkam
8. ECR Road: The are is witnessing an increased in residential apartment launches due to relaxation of Coastal regulation Zone norms.
West Chennai:
1. The emergence of National Highway-4 Industrial corridor and completion of large scale special economic zone and IT developments has spurred residential demand
2. More than 85 per cent office space and 90 per cent retail space has been occupied.
3. The industrial activity in the region is driven by industrial clusters of Sriperumbudur and Irungattakottai
4. The IT activity is strong in the region where DLF IT Special Economic Zone along with other IT parks in Mount Poonamallee and other IT businesses located in Ambattur
5. The demand in the region is driven by IT professionals who are looking for mid-segement residential apartments in close proximity to IT parks and manufacturing units.
6. The price of prominent residential developments could be anywhere from Rs 3,850 per square feet to Rs 13,900 per square feet
North Chennai:
1, The region witnessed limited infrastructure development during last decade resulting in sluggish real estate growth.
2. The proposed metro connectivity coupled with availability of land parcels at competitive rates has resulted in developers launching of large scale residential development of the area targeting traders..
3. The region comprises of Tondiarpet, Perambur, Washermenpet, Madhavaram and Korukkupet
4. The economic activity is driven by ports, integral coach factory and the presence of southern railway headquarters
5. More than 80pc of retail space is occupied.
6. The cost of prominent residential development is priced at Rs 5,200 to 7,200.
Central and East Chennai:
1. The region comprises of Central Chennai with Nungambakkam, Alwarpet, Mylapore
2. The region which initially had independent houses began to be redeveloped as apartments to accommodate large populace
3. However, a majority of real estate shifted from the Central to suburban areas.
4. The office sector is 85 per cent full.
5. The region preferred to be excellent social and physical infratstructure has issues with affordability
6. The prominent residential developments in the area range from Rs 5,999 to Rs 7,200
Factfile:
1. More than 15 million square feet of office segment is lined up for completion
2. More than 500 projects registered with TNRERA
3. 68pc new launches are coming up in southern vectors like OMR and GST Road
4. 74pc of new launches concentrated in mid-segement.
Box;
Your dream home may cost more from next financial year as developers hit by rising sand, cement and crude oil prices are mulling on increasing it by few per cent more.
Confederation of Real Estate Developers' Association of India (CREDAI) Tamil Nadu president Ajit Kumar Chordia and president of CREDAI’s Chennai Chapter speaking during the launch of CBRE PropFair have predicted a rise in the prices of properties from March 2019.
“Prices of cement, steel, crude oil have gone up and the rupee has fallen. Currently, the price of sand is Rs 70 per cubic feet as such the developers have left with no option but to pass on the price to customers,” said Chordia.
Interestingly, Chennai’s property market which seen a decline in the last two years is now showing a resurgence, a CBRE report states
