A rise in plotted development projects in and around Chennai

Chennai

Industrial growth, better connectivity and infrastructure development have led to a spurt in the number of plotted development projects in and around the city. While there is a constant demand for apartments, villas and other housing projects, over the years, there has been a rise in the demand for plots as well. S Ramaswamy, Assistant director, RECS Group, says, “GST Road, Sriperumbudur-Oragadam belt and ECR are the top three growth corridors that have seen a surge in the demand for organised plots. There is a good demand for plots in and around Chennai due to factors such as good road connectivity and the horizontal industrial development in the suburbs. The availability of transportation facilities plays a major role in the organised plot development market, especially on the outskirts of Chennai.” S Mohan, MD, Wisdom Properties, says, “Individual plot development in and around Chennai is on the rise.”

Mohan says, “The primary areas include the Southern Suburbs comprising Chengalpattu, GST Road, Oragadam till Kanchipuram and the Eastern Suburbs – areas till Mahabalipuram. Development in the Central suburbs that include prominent localities such as MRC Nagar, Triplicane, Teynampet, Nungambakkam and T Nagar will gradually pick up over the years.”

He adds that with the number of software and manufacturing industries foraying into the city, the demand for plots in peripheral and suburban areas of Chennai has increased manifold. “There are a number of employment opportunities in the city, and people migrate not only from other states but countries as well. This has further increased the demand for plots,” he adds.

Highlights of the three primary growth corridors

GST Road

- Proximity to already developed areas such as Tambaram and Guduvanchery

- Connectivity by rail and road to localities such as Oragadam and areas along OMR

- The presence of a number of industries such as the Maraimalai Nagar Industrial Estate, for instance

- A viable investment for future developments, thanks to the kind of residential and industrial development along this belt

Sriperumbudur-Oragadam

- Hub of industrial development in the city – An affordable alternative to investing in apartments

ECR

- Good connectivity and proximity to the city centre – Proximity to OMR and prominent IT establishments – Scenic beachway with good social infrastructure

Source: The Times of India, Chennai

Despite slowdown, housing prices bullish across cities

According to the residential real estate index prepared by the National Housing Bank (NHB), the housing prices in 16 cities including Delhi, Mumbai, Chennai, Bangalore, Pune, and Kolkata improved in the quarter ending June 2012, compared to the previous quarter ending March 2012.

In fact, in most of these cities, prices improved quarter after quarter since January-June 2009 quarters barring in a few exceptions like Bangalore, Hyderabad , Jaipur, and Indore, where prices have corrected in some quarters.

But when compared to prices in January-June 2009, when the index was first announced , the prices in the latest quarter have shown a significant jump.

It is also because January-March 2009 was the first quarter when the impact ofglobal bank crisis of 2008 was fully realized. In fact, the index of property prices in Delhi continued to fall till January - March 2010, when the index touched 106, from 121 in January-June 2009.

According to the NHB, the prices of residential properties in 16 cities have shown an increasing trend in the range of 1.1% in Kochi to 10.5% in Pune, in April-June 2012 quarter , against the previous quarter.

At the same time, it saw marginal decline in three cities - Jaipur, Hyderabad and Indore. Faridabad remained stagnant in this quarter.

According to the data prepared by the NHB, the maximum increase was observed in Pune, by 10.5%, followed by Bangalore (8.7%), Patna (8.6%), Ahmedabad (6.4%), Ludhiana (5.3%), Lucknow (4.1%), Mumbai (3.7%), Delhi (2.6%), Kolkata (2.6%), Bhubaneswar (1.7%), Bhopal (1.7%), Chennai (1.7%), Surat (1.2%), Guwahati (1.2%), Vijayawada (1.1%), and Kochi (1.1%).

Three cities have shown marginal decline in prices over the previous quarter, with a maximum decline of 2.6% observed in Jaipur, Indore (2.4%), and Hyderabad (1%).

The data has been prepared by NHB RESIDEX, which tracks the movement in prices of residential properties on a quarterly basis, an exercise it has been conducting since 2007.

However, according to the NHB Residential Index, the property prices in the NCR region increased by around 11% in the last one year, while a close look of different micro markets give a different picture.

The property prices in certain developing pockets like Dwarka Expressway in Gurgaon went up by almost 50-80 % in the last one year. Similarly, in other developing pockets like New Gurgaon and Golf Course Extension Road, property prices have gone up by 30-50 %.

In Noida, prices of property on the Noida-Greater Noida Expressway increased by almost 30% since June 2011. In Ghaziabad too, prices in Indirapuram and Vaishali went up by around 30%. In certain pockets like Crossings Republik, where possessions have been given to buyers, the prices have improved by almost 50% in the last one year.

However, prices in the matured markets of Delhi, Gurgaon , and Noida have not appreciated so sharply during the period, as they are already very high. As in the index, when prices of properties located in different areas are taken into account, it does not give a clear picture. But, the index has vastly improved and reveals the prevailing bullish trends in the property markets in the NCR.

QUICK BYTES

Compared to prices in January-June 2009, when the index was first announced , the prices in the latest quarter have shown a significant jump

Source: http://economictimes.indiatimes.com/features/et-realty/despite-slowdown-housing-prices-bullish-across-cities/articleshow/16042170.cms

Realty firm for seniors to complete Rs 500 cr project in 3 yrs

Chennai: A real estate firm focusing on constructing dwellings for retired senior citizens in south India expects to complete Rs 500 crore worth of projects in three years.

The demand for retirement villas and apartments have been growing consistently over the last two years, Covai Senior Care Constructions, Director (Finance and Strategy) P B Anand said.

"Currently we are executing seven projects across South India valued at Rs 500 crore. We expect it to be completed in another three years," he said.

The Coimbatore-based firm is in the final stages of its Rs 50 crore fund raising plan, he said.

"We have investments of Rs 25 crore as equity from an investor based out of United States. We raised another Rs 25 crore through debts. Currently, we are in the fag of it (fund raising plan)" Covai Senior Care Constructions, Director (Finance and Strategy) Anand said.

He said the company is currently doing projects in Bangalore, Chennai, Puducherry and Coimbatore besides planning another project in Kancheepuram.

The company reported revenues of Rs 60 crore in 2011-12 fiscal and aims to register Rs 100 crore this year, he said.

Anand and Covai Senior Care Constructions Managing Director Colonel A Sridharan were here to announce their upcoming two projects at Puducherry and at Sulur near

Coimbatore, both of which are retirment villas and apartments.

Source: http://www.financialexpress.com/news/realty-firm-for-seniors-to-complete-rs-500-cr-project-in-3-yrs/994882/0

Leela Palace Chennai readying for November opening

Chennai’s newest luxury hotel, situated on the southern end of the Marina beach, is being readied to welcome guests. Sea-facing, the Chettinad Palace-inspired opulent hotel from Hotel Leelaventure Ltd will open early November, just in time to cash in on the peak-season demand.

Rates at the 326-room property, as per a web booking engine, start at Rs 12,500 per night (deluxe sea-facing room), which is higher than the Rs 11,700 per night rate charged by by Taj at the Lands End, a prime sea-facing hotel in Mumbai.

Though delayed by over a year, the launch of the The Leela Palace Chennai (eighth in the company’s line-up) is one of the half-a-dozen turnaround initiatives planned by promoters to inject life back into the debt-laden company.

As of March 31, total debt on the company’s books stood at nearly Rs 4,300 crore, resulting in a near fourfold rise in net loss at Rs 101 crore in the first quarter this year.

Interest paid during the January-March quarter (Rs 89 crore), which doubled compared to the corresponding quarter last year, was 64 per cent of the revenue earned (Rs 138 crore) during the period. The company’s promoters, the Nair family, has thus put in place a series of measures to tide over the crisis, assuring stakeholders of a certain reduction in its debt.

The company will raise up to Rs 1,000 crore through one or more instruments to meet capital expenditure, expenditure for renovation, expansion, brand building and to pursue new growth opportunities.

Leela has also applied for debt-restructuring under the corporate debt restructuring (CDR) mechanism, to ease out the debt burden though its lenders have still not agreed to reduce the interest rate on outstanding loans. A flash report for restructuring of its debts was approved by the CDR EG (empowered group) in May with January 1, 2012 as the cut-off date. The final restructuring package is under discussions.

“The company is facing a liquidity mismatch as most of its debts are payable in next five years. The company expects to get moratorium on interest and principal repayments for two years and repayment over the next eight years. The company also expects to get reduction of interest rate, even though the lenders would have a right of recompense at the time of exit from CDR,” stated the annual report of Hotel Leela Ventures.

Further monetisation of three land assets and an office space are considered by the company, located in Pune, Hyderabad, Bangalore and Chennai. Valuation of these properties exceeds Rs 700 crore, as per market estimates. Commercial property in Chennai is the Leela Business Park, located next to the luxury hotel.

Four or five-star properties in tier II locations are also being explored by the company. In addition, management contracts for nine new properties are actively considered, including a project in Jaipur where the firm has already signed the contract and in the capitals of Bangladesh and Sri Lanka.

The company also owns land in Agra (facing Taj Mahal) and Ashthamudi, Kerala. At both centres, it has decided to build a luxury hotel and resort, respectively, in collaboration with an investor, though it is yet to finalise the deals.

Though the turnaround plan has been put into motion, market watchers are not excited just yet. A Delhi-based analyst tracking the hotel sector stated several of the recently announced plans by Leela were only a repetition of its earlier promises.

“The company’s debt in March last year stood at Rs 3,800 crore. Even then it had announced sell-off plans of non-core assets such as land and office space. Not only has the debt increased, but it has failed to get a single buyer for its assets. In the meantime, real estate valuations have further strained,” said the analyst.

However Leela’s management successfully sold its Kovalam resort last year for Rs 500 crore (actual gain is Rs 415 crore) to a Dubai-based non-resident Indian Ravi Pillai. Hotel Leelaventure continues to manage the formerly state-run ITDC resort, which overlooks the Arabian Sea.

But unlike the successful deal of Kovalam, the company has failed to execute announced plans of selling preferential shares to private equity companies, which would have fetched it Rs 600 crore. The company had been in negotiations with sovereign wealth funds but the deal has failed to materialise.

Further, a planned qualified institutional placement and foreign currency convertible bond (FCCB) of $200 million (Rs 895 crore) failed to take off due to a depressed equity market while its earlier FCCB of $100 million did not get converted into equity and remained as debt.

Presently, promoters hold 56.6 per cent in the company (though 85 per cent is pledged), while foreign institutional investors hold little more than one per cent. Kolkata-based ITC remains the single largest non-promoter shareholder in Hotel Leelaventure with a stake of 13.98 per cent.

“Leela has limited coverage compared to say ITC, Oberoi or Indian Hotels. They are unable to expand under ownership model because their balance sheet looks quite stressed and banks will thus be reluctant to lend to them. Management contracts can bring only fees and not profits,” said another analyst.

Source: http://www.business-standard.com/india/news/leela-palace-chennai-readying-for-november-opening/484569/

Chennai city housing prices zoom past Rs 1 crore

Chennai

If you are an apartment owner in a good location in city areas, then you can feel proud that you are a crorepati today at least in notional values. But if you are the one due to invest in housing for a specific city location, you will have to cough up not less than Rs 1 crore. Soaring land values, lack of clear title properties, fierce competition among developers and demand exceeding supply have all made buying an apartment a virtually impossible task for the common man.

Yet another factor is the archaic development control rules which have throttled the housing development for decades in key locations across the city. Restrictions on FSI have made housing a costly exercise for Chennaiites over the years without rhyme or reason. The worst affected sector is the middle class for whom the question of acquiring their dream home in city areas will be a Herculean task hereafter. The Tamil Nadu Housing Board apartment owners in key city locations are sitting pretty as the redevelopment exercise on their existing units would fetch a windfall besides cash incentives in the years ahead.

Just visualise the apartment prices for select ongoing projects across city locations and for a 1200 sqft apartment the price is over Rs 1.25 crore: Alwarpet (Rs17,500-Rs20,000), Anna Nagar (East) (Rs 12,000-Rs12,500), Besant Nagar (Rs 12,500-Rs 13,750), Adyar (Rs 13,500), Kalakshetra colony (Rs 15,000), Kilpauk (Rs 12,800-Rs15,000), MRC Nagar (Rs 10,500-Rs15,000), Kasturi Ranga Iyenger road (Rs 28,000), Nungambakkam (Rs 13,000 – Rs15,000), R.A. Puram (Rs 13,500), Sri Nagar Colony (Rs 14,000-Rs16,000), T Nagar (Rs 12,700-Rs15,000) and Valmiki Nagar (Rs 11,000-Rs12,000).

Even the resale apartments in key city locations are quoted at rigid prices due to which the transactions are taking much longer time nowadays, say realtors monitoring secondary market price movements in the city.

At the same time not all city properties can fetch fancy prices. There are road restrictions and access issues that have made even prime properties lying idle for several years as buyers do not evince keen interest at such prices. Even property developers are shying away from joint development in such areas due to lesser ratio for development. Some developers are keen to even accept 55:45 (developer) as the sale value compensates them with higher revenue and the lead time is short besides there is a ready market for such units.

For the younger generation this is a timely lesson to start investing in homes much earlier than later. They can pursue their costly higher education without any institutional commitment while pursuing their initial careers. They can mortgage, rent and raise resources from housing finance companies and banks to pursue their academic interest without the need to depend on their parents.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/chennai-city-housing-prices-zoom-past-rs-1-crore

Developers focussing on amenities to attract Chennai buyers

Chennai

In order to attract home-buyers in Chennai, who are seen as conservative, developers are planning several township projects with a host of amenities in the coming months, says a report released by property consultancy firm Jones Lang LaSalle India. “There has, so far, been no scope for the growth of large-sized township projects within the city. Chennaites had been showing an unyielding preference towards living within the CBD because of the dearth of good schools, convenience stores, entertainment and restaurants in other areas,” said Badal Yagnik, managing director, Chennai & Coimbatore, Jones Lang LaSalle India.

“Developers had been more than happy to construct projects of 12-30 units with limited or no amenities, little or no green cover and extremely restricted open spaces.” However, things are set to change in the coming months. “In the coming months, Chennai will see a major change in this aspect, with a string of township projects by developers of national stature under execution and nearing completion,” he added. The new ‘game-changers’ include generous landscaping, serene environment, schools within the campus, big club houses, health club facilities for both indoor and outdoor sports, multiplexes in the vicinity, health care, restaurants and large swimming pools, states the study.

“As a result, community living in the true sense is finally going to emerge in Chennai. We anticipate that once these large projects are fully executed, we will see a decisive forward momentum in the concept of large, well-equipped residential communities in Chennai,” said Yagnik.

Source: The Economic Times, Chennai

Trump's first project takes off in India

PUNE : US real estate billionaire Donald Trump's first luxury homes project in India has finally taken off. Trump Towers, two 22-floor skyrises, are being built by Panchshil Realty with Donald Trump at Kalyani Nagar, Pune, under a brand licence agreement. With approvals in place, construction has already begun for the 44 five-bedroom flats admeasuring approximately 6,000 sq ft and priced at Rs 12 crore each. Having burnt his fingers twice - the Pune project being his third venture in the past three years - Trump signed the agreement with Panchsil only after the developer got all the statutory building approvals in place, sources said.

Trump is also close to finalizing plans to construct Trump Towers at a three-acre plot close to Boat Club in Chennai and another on a 10-acre plot at Noida. All the three projects are approximately worth Rs 1,500 crore.

Trump's first venture at Bangalore broke off within months while Trump's second project in Mumbai with Rohan Lifescape has not moved further due to regulatory hurdles.

Source: http://timesofindia.indiatimes.com/business/india-business/Trumps-first-project-takes-off-in-India/articleshow/15398221.cms

Reliance Infra’s Salem to Ulundurpet road project operational

Tamil Nadu

Reliance Infrastructure Ltd has completed its fifth road project in Tamil Nadu. This road project from Salem to Ulundurpet in Tamil Nadu is expected to ease traffic flow to the city centre – Chennai. The four laning has been completed and toll collection has commenced.

The project is executed on Build Operate Transfer (BOT) pattern under the aegis of National Highways Authority of India. RInfra has been awarded the contract to operate and maintain the road for a concession period of 25 years. Built at a cost of Rs 1,061 crore, SU corridor connects major tourist destinations, industrial zones and the Chennai international airport. Yercaud – a hill station and an important tourist destination in Salem district will now be easily accessible through this corridor.

Sudhir R Hoshing, CEO (Roads) Reliance Infrastructure said, “This road projects is expected to provide hassle-free, safer and smooth driving experience. The corridor will not only connect centers of tourism and industrial zones, but will also reduce the rural-urban gap by connecting 79 villages with Chennai, Bangalore and other major cities. The corridor will witness approximately 8,500 vehicles per day that is expected to double in the next four years.”

He added that with the opening of SU corridor, five out of six road projects worth Rs 3,300 crore in Tamil Nadu are now operational and generating revenue. Starting from Salem, SU corridor involved realignment and widening of two lanes to four lanes. Some section of SU stretch had dangerous curves and steep rises that were realigned, so that commuters can maintain the minimum design speed and enjoy the comfort of drive.

With the widening of SU corridor, the average speed of vehicle will now increase from 35 kms per hour to approximately 70 km per hour, thereby reducing the traveling time by 40-50 per cent and saving fuel cost by almost 40 per cent. Commuters traveling the entire stretch can now cover this distance in less than two hours whereas earlier, the same distance used to take almost 3 hours 30 minutes. Access from Salem to Chennai Airport will also become much easier and convenient.

Keeping the traffic density in mind, 10 lane toll plazas were constructed on SU road. Each toll plaza is installed with Automated Toll System to further reduce the stop over time. Total 3 Toll Plazas are located on the entire stretch of the corridor, out of which two are currently operational. Commuters residing within 20 kms radius of these respective toll plazas can also avail the benefit of monthly discounted passes.

Source: MagicBricks.com Bureau

Tankers’ illegal pipes drain life out of Keelkattalai lake

Even as the chief minister J. Jayalalithaa is keen on restoring water bodies and protecting the marshland in and around Chennai, the Keelkattalai lake continues to shrink as illegal tapping of water by private tankers goes unchecked.

Dozens of tankers drain the water body throughout the day and in a bid to facilitate the illegal activity tankers have laid huge pipelines.

Photographs available with this newspaper reveal that at least half a dozen pipelines laid at the surface level is fitted through high power motor pumps to draw water from the lake.

“On a daily basis, several heavy vehicles are washed in the lake polluting the water body and pollution levels are hardly checked”, alleged K. Rajkumar, a local resident. Says K. V. R. K. Thirunaran, founder, Nature Trust, “At a time when the state government is taking steps to preserve water bodies, several lakes in Kancheepuram district are crying for attention.

Besides providing ground water, these water bodies are home to hundreds of water and migratory birds. Keelkattalai lake attracts large number of wetland birds.

Rare Osprey bird that feeds on fish is reported in Keelkattalai lake area besides the lake during monsoon also attracts a good population of pelicans and cormorants. Further Keelkattalai lake is the main water feeder for Pallikaranai marsh, he adds.

When contacted, a senior PWD official said that the maintenance of the lake was with the PWD, but the local police should take steps to prevent illegal water tapping. At present Keelkattalai lake and its adjacent areas are under safe zone and the groundwater table level is safe.

But unchecked exploitation of groundwater could affect the water table over years, he added.

Source: http://www.asianage.com/chennai/tankers-illegal-pipes-drain-life-out-keelkattalai-lake-408

No speculation key to Chennai realty’s affordability

Absence of speculation by investors and the rise in property sales in the affordability segment has made Chennai’s residential market quite resilient to the looming threat of global economic turmoil, said a report by property research firm Knight Frank.

The city has observed healthy sales level with the vacancy level in the residential market recorded at 31 percent as stability in the market since 2010 has instilled confidence in end-users to proceed with their purchase decisions.

Nearly 42 percent of the absorption in FY 2012 has been in range of Rs 25 lakh to Rs 50 lakh, followed by the range of Rs 50-75 lakh at 23 percent. More importantly 14 percent of the residential units launched in FY12 belonged to the Rs 50-75 lakh ticket sizes, catering to the needs of the upper mid-end segment.

“The clubbing together of these categories essentially denotes the fact that the affordable and mid-end segment has been responsible for the absorption of total 85 percent of the residential units booked or sold, said Samanthak Das, National Research Head at Knight Frank.

Here are the key highlights of the report

• Nearly 82,000 residential units are under various stages of construction in the Chennai market.
• Out of the total residential units, FY 2012 witnessed the launch of approximately 14,900 units which are scheduled to be completed in the next 2-3 years.
• 74% of the total number of residential units launched in FY 2012 fell within the Rs 50 lakh ticket size category. On the other hand, just 9% of the total units launched in FY 2012 surpassed the ticket size of Rs 1 crore to fall into the premium segment.
• The preferred size for 3 BHK flats in Chennai has increased from an average of around 1250 sq.ft. during the recession to an average size of 1450 sq.ft. in the revival phase. The preference for 2 BHKs has also increased from an average of around 900 sq.ft. to about 1150 sq.ft.
• Chennai market is end-user driven and therefor has been stable. Demand has been more evident in the mid-end category, primarily towards the peripheral locations of the city where majority of the affordable projects are located. Investor participation is long term in nature, thereby mitigating a speculative market scenario.
• The absorption rate has also been helped by the cautious pricing strategies adopted by local builders. The absence of overt speculation ensured that the developers could peg their price of homes more realistically
The current scenario of job stability in this sector is at a much better position than it was during 2008-  2010. Thus, the demand for homes has reached a comfortable and stable growth trajectory, thereby leading developers to take cues for their residential projects.




Affordable housing projects continue to rule the roost in areas with social infrastructure lag and lower capital values.

Micro Market segmentation of the Chennai’s residential landscape

Central:The central part of Chennai has the highest property prices, the highest being Boat Club Road and Poes Garden North :This belt has been a little less developed than others and is dominated by small- scale industries like textiles and chemicals

West:The Western part of the city has some of the most upcoming locations. Setting up of electronic hardware corridor at Sriperumbudur has increased price in vicinity.

South :The corridor between Shollinganallur and Tiruporur in the southern belt will be the next investment destination for residential property in the city. The presence of the IT corridor and influx of IT companies has led to increase in demand for quality residential space.

Source: http://www.firstpost.com/economy/no-speculation-key-to-chennai-property-markets-affordability-397271.html

Real estate prices head north in Bangalore

Most regions in the top metros have seen prices soar by double digit percentages in the last three years with areas in some areas in Bangalore and Chennai witnessing high price gains, according to a study on realty prices in the metros over the last three years.

Commenting on the same Vineet Singh, Business head, 99acres.com said “The real estate market in metros has always been an attractive destination for buyers because of its high returns on investment. “

“The North Bangalore corridor, especially the areas around Hebbal, seems to be developing into a Manhattan of sorts with a wide range of high end projects on offer by reputed developers. The new international airport is finally delivering expected returns for the real estate fraternity with a whole lot of offerings from budget homes starting as low as 20 lakh to super luxury villas in excess of five crore. The bullish trend will get even better once the elevated expressway is commissioned. The Chennai market is relatively strong and stable in nature as indicated by the year on year healthy price increase. Therefore end-users/first home buyers can look to buy property at the current rate as prices are expected to grow at a similar pace over the next twelve months as well,” he added.

North B’lore prices

North Bangalore has seen price rise by 48% in 2012 when compared to 2010. South and East Bangalore saw prices appreciate by 27% and 26% respectively. Central and West Bangalore on the other hand have seen less price gains with per square feet rates increasing by a minor 9% and 6% respectively during the same time period. Northern and western regions of Chennai saw 41% and 38% increase in prices, while South Chennai saw stable price levels.

The NCR and Dwarka region of Delhi has seen massive price rise over the last few years. Most regions in the Mumbai area also show massive price growth. Kolkata has also seen price appreciation over the last three years.

However, the prices in the city are much lower than the other top metros in the country.

Source: http://www.deccanherald.com/content/267165/real-estate-prices-head-north.html

Spurt in housing development on Vandalur-Kelambakkam road

Chennai

The 18-km stretch from the IT corridor in Kelambakkam to the Grand Southern Trunk (GST) road junction at Vandalur was lying low for quite some time due to the hectic real estate development activity on either side of the corridor. With the soaring land prices and acute scarcity of land for housing development, the perpendicular road that connects both the corridors is bristling with activity, thanks to the improved connectivity levels and willingness on the part of Chennaiites to shift from city areas.

There is another reason for the sudden shift in trend. With the availability of large land parcels, property developers could plan large projects with a comprehensive range of amenities that will convince the people that it is time to live in a gated community development for varied reasons.

Over 15 developers have ongoing residential projects on either side of the Vandalur-Kelambakkam road. These range from affordable housing, plotted development, luxury apartments to villas. Among the developers who have ongoing projects, specific mention must be made about Puravankara Projects, Sobha Developers, Unitech, Real Value Promoters, Vijayshanthi Builders, Artha, Isha Homes, SSPDL, Emaar MGF, DABC, Provident Housing Development, among others. A number of affordable housing projects are likely to change the skyline of the area in the coming years, according to industry sources. Apartment prices for ongoing projects range from Rs 2,500 to 3,900 per sq ft whereas row houses are quoted at Rs 3,500 per sq ft. Developed plots in areas like Vengambakkam are quoted at Rs 1,000 per sq ft.

The presence of Chettinad Hospital, VIT University and engineering colleges have pushed the demand for housing and nudged others to shift to suburbs. A few schools are due to come up in the corridor. As the GST corridor is bustling with activity due to lack of infrastructure and soaring land prices, Vandalur-Kelambakkam road came in handy for developers to look at housing development due to availability of large land parcels and willingness on the part of land owners to opt for joint venture development. This has enabled a number of property developers to make a beeline in search of suitable land parcels for development. As the connectivity levels have improved and housing prices are competitive, those working in the IT corridor would be keen to invest in the coming years as prices are yet to touch the IT corridor level.

Though social infrastructure is lacking, Vandalur junction is poised for a major turnaround in development. Aerens Gold Souk is under construction near Vandalur on GST road. With improved connectivity levels to Oragadam via Tambaram-Mudichur road the area offers good transport connectivity for blue-collared workers to invest in housing as social infrastructure is gradually improving in the vicinity. The road widening work on GST road is long overdue and will go a long way in improving housing development in and around the area.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/spurt-in-housing-development-on-vandalur-kelambakkam-road

Empee Group to foray into real estate business

Empee Group, which is currently into the businesses of hospitality, liquor, sugar and power, is planning to foray into the real estate sector. The company is planning to set up two residential projects with an investment of around Rs 400 crore in Chennai, according to a top official of the company.

The company would start two projects on a land bank of around 20 acre in Kuthumbakkam, between Poonamalle and Sriperumbudur in Chennai, to offer around 1,000 apartments in the next three years.

This includes a 1.25-million project comprising around 800 house units and the other with 250,000 sft with around 200 units . The projects, targeted at the medium-segment customers, are expected to go on stream by the end of 2012.

“With the land bank we have, we thought of entering into real estate way back in 2007. However, the market was not good then and hence we had to hold back the proposal. Now, with think it is time to start our real estate operations,” said Nisha Purushothaman, vice-chairperson of the Empee Group.

The projects would be executed through the group's building construction arm, EDL Properties Private Limited. The project management team of its hospitality business, which includes the Hilton Hotel that was opened last year, would share its expertise in addressing all the issues concerned in detail.

“The location of the land bank and its access to the highway and the main road would give us an advantage in sales. Real estate is an area which we would develop our expertise into. We look at it seriously and plan to be in it in the long-term,” she added.

The company also has another 25 acre, mainly in Chennai, which would also be used for real estate development in future. Initially, the focus would be on residential projects.

The Rs 1,500-crore Empee Group has recently revealed its plans to set up a mega thermal power project of up to 1,320 Mw in Tamil Nadu with an investment of around Rs 6,500 crore. The company has also reentered the beer market.

Source: http://www.business-standard.com/india/news/empee-group-to-foray-into-real-estate-business/480498/

Migrants build city homes

BHUBANESWAR: People from neighbouring states dominate city realty market's workforce even as workers from Odisha continue to migrate to outside the state in search of work.

While masons from Jharkhand and Bihar rule the state capital's construction works, carpenters are mainly from West Bengal. Those from Andhra Pradesh have a substantial presence in all categories while plumbing work is the forte of local people.

C S Sharma, a labour contractor from Jharkhand who operates from the city, said construction workers from outside Odisha outnumber the locals in Bhubaneswar. "Outside state workers tend to work continuously for months without taking breaks while local people take too many leaves. That is why it is easier to meet deadline with outsiders," said Sharma who currently has around 500 workers under him here, mostly from Jharkhand. Similarly, when Odia workers go for work outside Odisha they work without leave for long, he added.

The industry knows who is good at what. In various components of the semi-skilled works, people from different areas have expertise. "Masons from Bihar and Jharkhand are good at finishing work while there is no match to local plumbers, mainly from Kendrapada and Jajpur districts. Workers from Bengal are good in painting work and carpentry," said Manoj Chandrabanshi, another labour contractor.

Real estate developers said big projects prefer mix of workers. "If one employs workers say only from Odisha, none will be left to work during a festival like Raja. Similarly, those from West Bengal prefer to go home during Durga puja. If the workforce is mixed, work will not suffer," said D S Tripathy, state president of confederation of real estate developers of India (Credai).

Besides hundreds of housing projects by private builders, big-ticket government projects such as All India Institute of Medical Sciences, National Institute of Science Education and Research, Indian Institute of Technology are under construction in city these days. Besides, work for around dozen flyovers and expansion of National Highways are under way here employing a huge workforce.

According to 2001 Census, 16 lakh Odia were listed as seasonal migrants to other states. The cities attracting maximum migration from the state included Kolkata, Surat, Hyderabad, Visakhapatnam, Raipur, Coimbatore, Delhi, Chennai and Bangalore. While thousands of people from Odisha migrate to Nalgonda, Guntur and Vizag, among other areas of Andhra Pradesh to work in brick kilns and as farm labourers, migration from Andhra is also substantial. The 2011 census report on migration is still awaited.

Source: http://timesofindia.indiatimes.com/city/bhubaneswar/Migrants-build-city-homes/articleshow/15111095.cms

Hindujas to foray into India's real estate sector

The Hinduja Group, with a global presence in core sectors like oil and gas, automotive, power, information technology (IT), banking and finance, on Sunday announced a major foray into the real estate sector in India, involving an investment of up to $15 billion.

Just back from a visit to India, Group Chairman S P Hinduja said here that the Indian economy "with its underlying strengths could become a beacon of hope in an otherwise bleak global environment."

The Group has acquired a landbank of over 3,500 acres in metros like Mumbai, Chennai, Hyderabad and Bangalore for development of integrated residential and commercial townships, SEZs, with hospitality, healthcare and related facilities, he said. These projects will involve an investment of $10 billion to $15 billion over the next five years, according to Hinduja.

The group was also looking at a portfolio of 10,000 Mw in the power sector in the medium-term, he said. Implementation of a 1000 Mw project is already under progress, Hinduja said.

Expressing optimism over the state of the Indian economy, Hinduja said its fundamentals remained strong and it had the potential to bounce back to high growth of eight to nine per cent a year. "The slowdown currently experienced by the economy is largely due to external conditions and not, as a section of the business community and media say, by coalition politics, lack of leadership, corruption etc," he said.

Hinduja said the ruling and opposition parties in India were united in their resolve to reverse the present deceleration of growth momentum and make India more competitive in the global economy.

He also noted that India continued to enjoy great credibility in international forums and among global leaders, "which is a major plus."

The leading UK-based industrialist said that non- resident Indians (NRIs) continue to repose confidence in the country with their remittances touching around $60 billion last year, the highest for the developing countries, including China.

He is also confident that India will go for more of economic reforms and liberalisation and will not revert to a state-led model.

Hinduja noted that India had plans for investment of $1 trillion in developing its infrastructure in the next five years.

"It is a win-win opportunity for India and the developed countries. The investment in infrastructure will help in poverty alleviation in India and acceleration of economic growth and jobs creation in the investor countries," he said.

He said India can leverage its rising international status to mobilise investments in the country by foreign investors and NRIs to meet the government's target.

He said the investment priorities should be rural, semi- rural/urban areas.

"This will create employment opportunities where they are needed, helping alleviate poverty without distribution of subsidies, gifts and donations. The consumer market will be enlarged, contributing to increased production and economic growth," he said.

At the same time, Hinduja underlined that one of the conditions for awarding mega projects should be building up of social infrastructure in education, healthcare, water supply etc in adjacent semi-urban or rural areas.

He also demanded that the government should reduce the large number of permissions required for starting up industries or infrastructure projects.

"The key in this regard would be to organise all central, state and local level clearances before the projects are awarded to investors. This would reduce corruption and ensure speedy and timely completion of projects," Hinduja said.

He also said the Indian bureaucracy should be "sufficiently galvanised" with accountability and rewards. "The concerned government departments should monitor the projects with a Project Implementation Review Chart having time-lines for completion of different phases of the projects. An incentive scheme should be in place for rewarding the government officials for timely completion of projects," he said.

Hinduja also highlighted the challenge faced by India from the menace of corruption and black money. "The main causes of generation of black money have been the requirement for funds to meet the expenses of political parties and to fight elections at local/state/national levels; the need for making illicit payments to secure government contracts and influence government policies etc," he said. "This is a cancer which must be addressed. Unstructured, non-institutional political funding is the root of corruption in India. Electoral reforms may be introduced to regularise and make political parties accountable for funds received," he said. He also said that state funding of political parties' election expenditure can be part of a large scheme of political, electoral and taxation reform to stop the flow of money into parallel economy. He pointed out that many developed countries have opted for 20-30 per cent tax to make black money stashed abroad accountable. "India could also consider entering into similar agreements with foreign countries so that the unaccounted wealth abroad can come to India and taxed. Such fhttp://www.business-standard.com/india/news/hindujas-to-foray-into-indias-real-estate-sector/481174/unds could help reduce India's burgeoning fiscal deficit," he said.

Source:

Rise in demand for office space in Chennai

Chennai

There has been a marginal increase in the demand for office space in Chennai. While the suburban business district witnessed a decrease in demand for office space with absorption recorded at around 0.28 million square feet compared to approximately 0.35 million square feet during the previous quarter, the peripheral business district witnessed healthy demand levels with absorption levels recorded at 0.30 million square feet during the quarter compared to 80,000 square feet registered during the previous quarter.

“While Chennai has witnessed a marginal increase in demand for prime office space, supply constraints might result in rental values continuing to appreciate in the near to medium term. IT and back office operations are expected to remain major contributors to overall office space absorption in the city,” Anshuman Magazine, chairman and managing director, CBRE, South Asia said.

Transaction activity in the central business district remained low during the quarter and there was no addition in the existing supply. The non central business district micro market witnessed an increase in transaction activity during the quarter with absorption of around 0.26 million square feet, compared to 0.16 million square feet during the previous quarter. On the supply front, around 0.21 million square feet of Grade A office space was released in the region.

Source: The Times of India, Chennai

GST Road – A prime destination for real estate development

Chennai

GST Road, in many ways, is the city’s lifeline. Not only is it the gateway to the city, linking it with many important places, it is also gaining ground as an important investment option, as far as residential real estate is concerned. We look at some prominent locations on GST Road that are set to grow even further.

Maraimalainagar

This suburb, located 40km away from the city, has been on the development radar for quite sometime now, both in terms of residential and industrial growth. In the late 70s, when Rajiv Gandhi, the then Prime Minister of India, visited Chennai, he referred to Maraimalainagar as the new face of Chennai and called it the city’s first satellite town. Now, almost two decades later, the area has grown by leaps and bounds in terms of urban infrastructure. The setting up of Mahindra World City, Infosys and the Ford manufacturing plant, to name a few, has helped put Maraimalainagar back on the map. The area is well-connected by rail networks and by roads (Trichy-M a d u r a i – K a nya k u m a r i Highway). It is also for this reason that Maraimalainagar is home to a whole range of factories – TAFE, Ford, Siemens, a few printing presses, engineering colleges like SRM University (Kattankulathur), etc, apart from its proximity to the industrial belts of Oragadam and Sriperambudur. The Chennai Outer Ring Road project, a 30km-long six-lane road connecting Vandalur with Nemilicheri is under construction now; this is expected to fuel more growth in Maraimalainagar.

Oragadam

Oragadam, centrally located between Grand Southern Trunk and NH4, has been touted as Chennai’s largest and the most developed industrial belt. With over 22 Fortune 500 companies (of which six are global car manufacturers), the Sriperumbudur-Oragadam belt has seen tremendous industrial growth in less than four years. The area is well-connected via road and rail, and according to industrial experts, the presence of automobile giants like Renault-Nissan and Ford has triggered growth around Oragadam. Several manufacturing giants such as , Motorola, Dell, Flextronics, Samsung, Nokia, Apollo Tyres, and TVS Electronics, have set up their respective units in the industrial belt stretching from Sriperumbudur to Oragadam. In addition, JCBL Ltd, Essar Steel, BPCL, Delphi TVS Diesel Systems Ltd, GE Bayer, Silicons (India) Pvt Ltd have also set up their businesses in SIPCOT Industrial Park, Oragadam. DHL is also reported to be setting up its first Free Trade Warehousing Zone at Sriperumbudur.

Chennai Outer Ring Road

The Chennai Outer Ring Road will run to a length of 62 km connecting Vandalur in NH-45 (GST) placed in the South-Western edge with Minjur in Thiruvotriyur-Ponneri-Pancheti (TPP) Road in the northern fringe of the city and close to the Ennore Port and other industrial developments in the Northern areas. The road will run via Nazarathpet on NH-4 (Bangalore Highway), Nemellichery on NH-205 (Chennai-Tirupati-Anantpur Highway) and Padayanallur on NH-5 (Chennai-Calcutta). The Vandalur to Nemillichery stretch, a length of 29.65 km is being implemented as Phase-1 of development. The stretch is touted to change the face of Chennai as we know it, and pave way for state-of-the-art infrastructure, which in turn, is expected to promote more real estate activity.

Source: Times Property, The Times of India, Chennai

Redefining Chennai’s ‘bungalows’

Apartments are the new bungalows of Chennai. As the city’s diverse industrial base and economy add to the surplus income, there is an increasing demand for high-end and luxury housing within the city.

But with space at a premium, the rich and affluent are settling for spacious apartments, say developers. Most leading developers have a pipeline of projects offering houses in the Rs 2-crore to over Rs 6-crore range. And that is just the start.

Wait for a couple of months and you will see even more premium houses being launched, they say.

This is not just a passing phase, but there is a clear market segment where the demand is expected to continuously outstrip supply. Housing shortage, obviously, is not a problem just for middle and lower income!

A few years back a project with half-a-dozen apartments in this price segment made news, but now large scale projects in this price bracket is the norm and the affluent are lining up.

Whether it is Prince Foundations, TVH, Appaswamy Real Estates, or DLF, they all say there is a keen demand for high-end homes in Chennai. It is another matter that soaring land prices have made large premium projects a necessity. The land cost accounts for over 70 per cent of the project cost in prime residential areas, they say.

And all these developers have finalised plans for even more premium products in the coming months.

What is driving the demand? And who are buying?

Buyers

People who have travelled, experienced quality lifestyles and want to replicate that at home. “It is as simple as that,” says Mr Ravi Appaswamy of Appaswamy Real Estates.

Value addition for comfort and a location in the heart of the city are vital in this segment, say developers. People are willing to pay for the products and services; what they cannot afford is the time, they say. They have their businesses or work in the city and do not want a long commute or the burden of daily chores.

In Kotturpuram, an affluent residential area, where ultra luxury developments are in the offing, Appaswamy Real Estates has launched a 64-apartment project with units priced at Rs 2.5 crore to Rs 6.5 crore and villa-style apartments for about Rs 8 crore. The project has not been formally launched but buyers have booked 20 houses here, he says.

The buyers are a range of professionals, businessmen and NRIs. DLF, the Delhi-based developer, created a flutter in the Chennai market a couple of years back when it launched Commanders Court in Egmore. The project with 356 apartments priced between Rs 1.6 crore and over Rs 5 crore was launched at Rs 10,500 a sq.ft, and prices appreciated by about 70 per cent to Rs 17,000-18,000 before the project was sold out.

“Purchasing power of the people in Chennai is more than what it is perceived to be,” remarks Mr K. K. Raman of DLF. The diverse industrial base in Chennai is attracting people to the city. The economic growth here is driving surplus and disposable income.

There is a huge sustainable market in the city, he says.

Mr Ashwin Kamdar of Prince Foundations which recently launched Prince Courtyard with 155 apartments priced between Rs 3 crore and Rs 5.5 crore, says sales is not a concern. Demand will far outstrip supply.

Set on a two-acre plot, where originally, the iconic Dasaprakash Hotel stood, on the Poonamallee High Road, the project has attracted businessmen, film stars, doctors, lawyers and, yes, developers.

An untapped market

A senior executive in TVH, which is developing the Quadrant, a 100-apartment tower with houses priced between Rs 3.5 crore and Rs 6 crore, says “Chennai is an untapped market” in this segment. Bookings are on at a brisk pace, and there is a waiting list for apartments in this project launched just a few days back.

The challenge in this luxury segment is not demand but supply, say developers. How many acre-sized parcel of land are available in the city, they ask. Mr Raman pointed out Chennai has traditionally developed as a ‘small site’ city. Layouts and plots of land were added on in stages as the city grew. Options are limited for such large scale projects. So supply will always be an issue rather than demand.

Ask Mr Kamdar, the ideal locations for a project of this size, “First you tell me where is the land?” he asks.

North Chennai is congested. There are no buyers for apartments priced higher than Rs 50 lakh. It is only in South and Central Chennai there is potential for such projects. But large sized land parcels are few and far between.

Such apartments have become a necessity as there is no place to spread out in the city. Families with more than one child cannot build more bungalows but need that space and lifestyle. So apartments are the only option.

That is another reason these projects offer a wide range of apartments from 2,000 sq.ft to more than 4,000 sq.ft to fit the pocket of the affluent on a budget, said a developer.

rbalaji@thehindu.co.in

(This article was published in the Business Line print edition dated July 14, 2012)

'Realty firms postpone shopping mall construction in 8 cities'

Realty firms have delayed the construction of shopping malls in eight major cities due to large vacant space in the existing complexes, according to property consultant Cushman & Wakefield.

"The retail real estate market recorded a deferment of more than 30 per cent of retail mall space against the projected supply for the first half of the year," C&W said in a statement.

The consultant, however, said the deferment was necessary considering the high vacancy rates in the shopping malls and cautious approach adopted by retailers on expansion.

The eight major cities (Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, NCR and Pune) witnessed a fresh mall supply of 2.27 million sq ft during first half of 2012.

"Approximately one million sq ft of expected mall supply was deferred to second half of the year or next year. The overall vacancy rate for the major cities as of H1, 2012 stood at 19.6 per cent, marginally higher than the previous quarter.

NCR saw the highest mall supply deferment of over 80 per cent ensuring the city maintained 28 per cent vacancy levels. NCR saw only 1.2 lakh sq ft of mall supply in H1. Bangalore saw the highest mall supply of 1.5 million sq ft in H1 2012.

"This slowdown in mall construction need not be viewed as a negative growth indicator for the retail real estate segment. The current pace is, in fact, expected to help in maintaining a healthier supply to demand equation; especially for oversupplied micro-markets," C&W India Director Retail Agency Jaideep Wahi said.

"With high vacancy levels as well as cautious expansion plans of retailers, the deferment of supply is a necessary measure to bring stability in the retail market," he added.

According to report, the rental values across most mall destinations within these 8 cities remained largely stable, except for certain micro-markets in Bengaluru, NCR, Kolkata and Mumbai where mall rentals have seen a growth over the previous quarter in the range of 2-13 per cent.

Elgin Road in Kolkata recorded the highest growth in mall rents at 12.4 per cent over last quarter mostly owing to renewals of existing tenants at a higher value.

Some prominent high streets destination recorded higher increase in rental values as against malls, reflecting the bent of interest amongst retailers for high-street.

Select locations across Bengaluru (MG Road, Jayanagar, Koramangala, Vitthal Mallya Road) recorded increase in rental by 8-9 per cent over the previous quarter.

Camac Street in Kolkata saw the highest increase in high street rentals at 25 per cent followed by MG Road in Bengaluru at just over 9 per cent. Gurgaon and Pune also saw increase in high street rents by 7-8 per cent.

Source: http://www.deccanherald.com/content/263504/realty-firms-postpone-shopping-mall.html

A Rapid Hike In The Housing Sector

At a time when real estate values started stabilising in and around Chennai, the government of Tamil Nadu has increased the rule values for realty registration functions by hiking the values from sixty per cent to three hundred per cent effective April one. This has sent shock waves among the business and therefore the landowners and property developers are in a piquant state of affairs currently.

The government’s reduction in stamp duty by one per cent has not gone well with the business when the rule values were raised to unexpected levels. The realty sector is in for rebellious times owing to sudden and remarkable hike in guideline values and therefore the worst hit sector are going to be reasonable housing phase.

According to official sources, though the revenue for the 2 month amount (April and May) was up by Rs one hundred crore, the amount of transaction has come back down drastically. business sources say that town space transactions fell through owing to reluctance on the part of consumers to soak up the hike in stamp duty.

In vibrant industrial areas like Whites road, the rule price soared to Rs 16000 higher than the market price. In different town areas like Abhiramapuram, the price for residential property in Chennai is quite the industrial value. The state government in their anxiety to curb the unaccounted cash in realty transaction has sent a wrong signal to the market which can adversely impact the housing development.

Land transactions aren’t happening today not attributable to the steep hike in guideline values alone however owing to the cascading impact of RBI restrictions on bank funding to realty sector, uncertainty in FDI investment, world meltdown, higher expectations of PE funds and soaring land price. What has aggravated the entire situation additional is that the sudden hike in guideline values.

The worst hit within the current situation is that the reasonable housing phase and therefore the common man for whom the dream of owning a shelter can solely get longer. Though official sources claim that the hike in guideline values vary from sixty per cent in suburbs and outermost areas, lack of development and lesser margins for developers won’t encourage them and solely prolong the general development of reasonable housing within the returning months.

Yet another phase that bore the brunt of the hike in guideline values is that the homeowners in exigencies. The distress sale isn’t happening due mainly to the hike in guideline values.

While guideline values within the town are over market values, within the suburbs it’s the reverse, which may be a matter of concern. This disparity is partly owing to the slow growth of realty costs in suburban areas. Though properties are obtainable at lower rates, we’ve to pay a better stamp duty and registration fees there as they’re calculated based mostly on guideline values, that are over market costs.

There is conjointly a region of developers who feel that in some areas, the rule price revision has been so much too steep. With such upward revisions, middle income individuals can realize it troublesome to purchase property in Chennai. Already, several of them are moving to suburban locations. However, so much this argument can cut ice may be a matter of dialogue.

Even when the rule values were low, builders kept apartment costs high, who ended his five-year look for an apartment a month ago.

Source: http://proptigerrealty.wordpress.com/2012/07/05/a-rapid-hike-in-the-housing-sector/