Residential rental and capital values expected to grow in Chennai

Chennai

The demand for residential units in and around Chennai has remained stable in the third quarter, with around 5,600 units absorbed in the quarter when compared to some 5,550 units in April-June 2012 quarter, according to Jones Lang LaSalle. The growth corridors like OMR and GST along with its link road and neighbourhoods continued to remain the most demanded areas in the city with healthy absorption levels. However, strong demand for housing was also witnessed in emerging locations like Porur, Ambattur and their neighbourhood areas. Rentals and capital values across the sub-markets are also expected grow.

With IT SEZ’s and easy access to emerging locations such as Orgadam and Sriperumbadur, demand for housing continues to improve in the western suburbs sub-market. In addition, attractive office rentals and quality office space in Ambattur has been attracting IT/ITES occupiers, which in turn has triggered housing demand around this location, situated in the western suburbs.

Supply

Chennai’s developers continued to bet on the demand potentials of the city residential market as they supplied 10,165 units in July-September 2012 quarter compared to 8,570 units in April-June 2012 quarter. More than 33,000 residential units were supplied during the first nine months of the year in comparison to around 18,000 units supplied during the same period last year.

The supply level in the southern suburbs continued to dominate this quarter, however, increasing housing demand in western suburbs continued to attract developers to launch more units in this sub-market. Around 44 per cent of the residential units launched during the third quarter were launched in western suburb sub-market and 35 per cent of the total launches in the first nine months were witnessed in this sub-market.

With increasing demand for villa projects, developers supplied 1332 villa units this quarter. This represents around 13 per cent of the total launches during the third quarter.

With housing options within the city getting costlier, suburbs sub-markets offering relatively affordable housing options, continued to witness faster capital value growth. Strong housing demand along with investor interest in the western and southern suburbs sub-market have increased the rental and capital values. Moreover, on-going and upcoming infrastructural activity within the city continued to support the capital value growth across all the sub-markets.

However, the rate of growth in rentals, residential and capital values will highly depend on the implementation and completion of the upcoming and on-going major projects such as the Monorail, the Metrorail, the Outer Ring Road, and the Greenfield airport.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/residential-rental-and-capital-values-expected-to-grow-in-chennai

Realty market booming in Chennai

Post the 2009 slowdown, the demand for property has been robust in Chennai so much so that the city is leading other metros.

Chennai is witnessing steady demand for budget and luxury properties and properties in the bracket of Rs 20 to 45 lakh is the most sought after, said a group of leading realtors who will hold a three-day Chennai Realty Property show at the Nandambakkam trade centre here.

The organisers pointed out that there is a shortage of 24,000 homes in the city in the budget home segment and added that more than 80 builders and banks that provide housing loans will put up stalls offering 50,000 property choices.

“A wide range of properties ranging from Rs 5 lakh to Rs 2 crore will be on the display and we expect a footfall of around 15,000 to 20,000 during the three-day event,” said Kishore Kumar, director, Eyeball.

“Property seekers were in a wait-and-watch phase because of Reserve Bank guidelines and market fluctuations and now the phase is over.

The investors and those who need homes should come forward to purchase properties and the Chennai real estate market is steady and booming,” said Kalyan Jayaprakash, managing director, Inno Geo City.

Chennai suburbs have potential and the public should start thinking about leading a peaceful life in a suburb, where there is no traffic chaos and congestion, said J. Kishore, director, Evocon.

He also pointed out that properties in the suburbs of Mumbai and Delhi were sort after by people, and a similar situation would soon arise in Chennai.

Jayanthi of Vijay Shanthi Builders spoke about new projects coming up at Ambattur, Kovalam and Besant Nagar.

Source: http://www.deccanchronicle.com/channels/cities/chennai/realty-market-booming-chennai-885

Demand for office space down in Chennai

Chennai

The office market in Chennai witnessed an overall absorption of less than 1 million sq ft during the first quarter this year. The Central Business District (CBD) encompassing areas of Anna Salai, T Nagar, RK Salai, Alwarpet, Nungambakkam witnessed a dip in demand for office space with negligible absorption of around 0.09 million sq ft being reported in the present quarter, largely in smaller and medium format office spaces.

However, due to negligible supply addition rental values firmed up by about 2-3% on a quarter over quarter basis, according to the first quarter report by CB Richard Ellis.

The Off/Non CBD micro-market of MRC Nagar, Guindy and Taramani witnessed stagnation in market activity when compared to the previous quarter. Absorption was recorded at around 0.16 million sq ft. However rental values witnessed a marginal increase of 4-5% on a q-o-q basis, primarily due to low supply pressures when compared to the suburban micro-markets.

A nominal supply of 0.08 million sq ft was released; vacancy level was in the range of 3 – 4%. The Suburban Business District (SBD) including areas such as Velachery, Perungudi, Mount Poonamallee Road witnessed maximum activity during this quarter with an absorption of almost 0.32 million sq ft being reported, compared to around 0.25 million sq ft in the previous quarter.

On the supply side, no significant additions were witnessed during the review period. Rental values increased by about 5-8% on a quarter on quarter basis; vacancy level was around 7 – 8% in the present quarter.

The Peripheral Business District (PBD) of Perungalathur, Sholinganallur, Siruseri, Ambattur and GST Road witnessed minimal activity with absorption of only around 0.08 million sq ft, compared to around 0.45 million sq ft in the previous quarter. The region witnessed an addition of around 0.72 million sq ft of fresh IT space, the only major supply addition in the city during the review period. Supply pressures and stagnating demand led to a downward pressure being created on rental values and a steep increment in vacancy levels to around 18-20% in the present quarter.

Market Outlook

The overall market sentiment, however, continues to remain positive which is expected to translate into healthy absorption over the coming few quarters. The SEZ segment should continue to witness supply addition, thereby being a major contributor to the office market in the city. IT and back-office operations are expected to continue to remain major contributors to office demand and transaction activity. Rental values are expected to remain largely stable across most micro-markets over the coming few quarters.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/demand-for-office-space-down-in-chennai

MagicBricks Apartment Index up 4% in July-Sep 2011 quarter

NEW DELHI: Home sales across the country have been falling for the last few quarters but property prices are still on the upswing. The MagicBricks India Apartment Index, which is the weighted average of supply and prices across cities, went up by 4% in the July-September 2011 quarter, showing a rise in capital and rental values across metros.

Of the eleven cities covered in the India Apartment Index, nine have seen a rise in property rentals and capital values. The apartment index in Delhi, Chennai and Ghaziabad rose 9% in the quarter, followed by Noida (8%), Bangalore and Hyderabad (5-6%) and Mumbai, Gurgaon and Pune (1-2%). The Apartment Index in Ahmedabad dropped 5% on the back of falling values in some key locations while Kolkata remained stable during the quarter, said the MagicBricks report.

In Delhi, the index rose by 9% because of rise in average prices in majority of localities across the city. "Maximum activity was witnessed in areas where middle and upper middle income groups of buyers are active," said the report. There was a significant increase in capital values in Dwarka, Chittaranjan Park, Kalkaji, East of Kailash, Mayur Vihar Phase-1 and Paschim Vihar, followed by Rohini Sector -13 and Alaknanda.

In Ghaziabad, increase in average capital values of properties across the city pushed the index up 9%, while in Noida, the index rose 8% because of increase in average capital values of properties across the region. "This was primarily due to the legal battles in Noida Extension between farmers and Noida development authority. Properties have benefitted in both possession and under-construction stage," said the report.

The rise in values as well as the number of listings in areas like Thiruvanmiyur and Ambattur were major contributors to the rising index value in Chennai. The index rose 5% in Hyderabad indicating end-user activity.

Source:  http://economictimes.indiatimes.com