Showing posts with label Residential real estate. Show all posts
Showing posts with label Residential real estate. Show all posts

Tuesday 15 January 2013

Pallikaranai in South Chennai emerges as top residential locality

Chennai

South Chennai is seeing some of the unprecedented growth in the residential real estate. The suburb has witnessed maximum value appreciation of up to 15 per cent and holds highest number of upcoming residential units. Within the region, Pallikaranai in the southern suburbs is seen as an ideal residential investment option with high appreciation expected in the coming years.

According to Sree Kumar of Kumar Properties, “Chennai is the next upcoming realty destination of the southern India after Bangalore. The expanding IT sector, entry of international retailers, changing banking and finance firms and upcoming service sector are some key attributes propelling the growth of residential rates.” The demand for housing is increasing by each day and is expected that property prices of suburban areas such as Pallikaranai, Perungudi, Kelambakkam, and Medavakkam are going to be double in another 4-5 years.

Pallikaranai has already witnessed a 10-15 per cent rise in residential capital values, while there has been a significant rise of more than 20 per cent in the inquiries generated in the past 4-5 months,” says Raghvendra Kumar of RK Realtors. The main real estate drivers of Pallikaranai includes growing job opportunities, presence of physical infrastructure, connectivity to important locations, access to social infrastructure, planned development, proximity to premium office spaces and land availability, he added.

The under-construction projects planned at Pallakaranai are seeing lot of investors and end-users making investments. The sub city proximity to OMR and GST Road apart from upcoming IT Parks and office complexes are other factors scaling up its potential. The ongoing infrastructure projects such as the metro rail, the monorail corridor and the outer ring road will further enhance its connectivity to the city.

The current capital values of residential apartments vary from Rs 3,200-4,500 per sq ft. Suneethara, Zion Constructions, Mugundhan Projects Private Limited, and Rajkham Builders are few of the active builders of the area. The new segment is evincing more number of transactions and reportedly the properties launched a year back are available in resale along with a premium.

Nidhi Vashisth, MagicBricks.com Bureau

Thursday 10 January 2013

Office space demand down 26% in 2012

Office spaces rented by companies, a clear indication of the economy's health, for 2012 dipped by 26% compared to 2011 in seven major cities, according to a report by leading commercial property and real estate services adviser, CBRE India.

According to the report, about 26 million sq ft of office space was absorbed in 2012 as against 35 million in 2011. "The decline in absorption across key cities is primarily due to the continuing global and domestic uncertainty in the economy which is a deterrent for corporates in their expansion plans. For the demand to revive, the economic reforms in India need to be fast tracked besides global economy has to show some improvement in growth," said Anshuman Magazine, chairman and managing director, CBRE (South Asia).

Real estate developers have witnessed a bad phase in the commercial real estate space since 2008. While the residential real estate saw a rise in demand between 2008 and 2010 followed by a price rise, commercial real estate continued to witness pressure on rents. As a result many developers have converted their commercial real estate projects to residential ones especially in Tier I cities.

While the demand remained slow for the office space, the supply has reduced only marginally, creating further pressure on rental yields. "The total office space supply that entered the market in 2012 was about 31 million sq ft, compared to about 30 million sq ft in 2011," the report said.

The seven cities surveyed were National Capital Region, Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata.

For the original post visit: http://www.hindustantimes.com/business-news/CorporateNews/Office-space-demand-down-26-in-2012/Article1-987885.aspx

Saturday 1 December 2012

Medavakkam among top growing realty markets in Chennai

Chennai

Medavakkam, a residential locality in south Chennai is expected to outscore all other residential hubs in the state in terms of real estate appreciation in the next five years, says a report by global property consultant Knight Frank.

According to the report, Medavakkam has emerged as India’s 6th largest destination for investment in the residential real estate, in the list of 13-top residential destinations in the country from an investment point of view, where housing prices are expected to increase by 103 percent over the period 2012-2017.

The real estate rates in Medavakkam are expected to appreciate more than 90 per cent in the next five years, states the report. “Developers who launched residential projects in Medavakkam two years ago at Rs 2,500 per sq ft have witnessed the prices jump to the current average rate of Rs 4,800 in the 2 BHK category,” says Sazil of DHFL Property Services Ltd.

Calm and airy with sweet ground water, this locality is a residentially preferred area due to its access to good educational institutions and connectivity. “The area seems to be a developing residential spot de to it close proximity to the IT corridor OMR (approx 4 km from Sholinganallur) and SEZ in Medavakkam Sholinganallur Road. Connectivity to the IT corridor is one of the main reasons why the locality is most preferred by IT professionals,” says Kamalakannan of Silicon Realty Realty Ventures.

Some of the areas in the location, like Jayachandran Nagar, BHEL Nagar, Aishwarya Gardens, among others constitute a large number of apartments mainly occupied by IT professionals. Medavakkam is also central to developing suburbs like Ponmar, Ottiyambakkam and Sithalapakkam.

This emerging location has some advantages like wide interior roads, good connectivity to the Old Mahabalipuram Road, Velachery, Pallavaram and Tambaram. It is close to many residential hubs, IT parks, schools, entertainment facilities and commercial establishments. There is CMDA master plan for to develop ORR 200 feet, from Medavakkam to Karapakkam (OMR) via Jalladianpet and Pallikaranai. This would help reduce traffic congestion on the Medavakkam-Sholinganallur main road.

With the required infrastructure, Medavakkam, is pegged as one of the emerging location for middle-income home buyers as well investors. With a number of big developers launching projects, trade pundits believe the location will see maximum price appreciation in the next three years.

Indrani Rajkhowa Banerjee, MagicBricks.com Bureau

Monday 30 July 2012

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

Thursday 26 July 2012

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

Thursday 19 July 2012

Chennai drives more NRI buyers

Chennai

The rupee volatility against US dollar and other linked currencies, overseas institutions’ lending at 4 per cent and favourable exchange rates have all convinced NRIs/PIOs to take advantage of the instant opportunity and plunge into real estate investment in Chennai. In a nutshell, it has become 20 per cent more affordable for NRIs/PIOs due to rupee parity rates alone. Leading developers have reported a quantum jump in the number of enquiries over a period of 3-4 months.

According to industry sources, most of them prefer built units for ready occupation of their parents or relatives and some are looking for periodical return on investment. They are willing to pay the extra premium to get the built units over ongoing projects in and around the city. The preferred price range for apartments varies from Rs 30 lakh to Rs 1 crore. This is apart from the surge in demand for developed plots and villas in and around the city. However, leading land developers do not agree with the view and see no perceptible shift in trend for demand.

There are others who feel that the preferred investment locations are OMR, ECR and parts of Velachery as considerable development is visible in those areas. Competitive lending rate from overseas financial institutions is yet another tilting factor that has encouraged a number of NRIs to mobilise upfront payment overseas for investment in real estate back home. A few of them are even finding it more convenient to raise local funding than through home loans with Indian housing finance companies and banks now.

Moreover, favourable exchange rates have given them additional benefit to borrow locally and remit to India. India has been consistently maintaining its top slot in NRI remittance in the world received from Indian Diaspora globally. Even though Gulf countries are taking more time to recover in the aftermath of economic meltdown, expatriates are now convinced that the job market has become stable unlike a year ago, say Gulf realty outlets. This has resulted in the quantum of NRI enquiries for investment in immovable property in the city going up by 50 per cent over last year, say leading developers.

Interestingly, the demand from NRIs in USA has increased considerably. Local funding at competitive lending rates and loans for expatriates maintaining good credit history at zero per cent interest rates have nudged NRIs to take advantage of the current situation and plough back money into real estate back home.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/chennai-drives-more-nri-buyers-2

Monday 9 July 2012

Buying a flat? Don’t get carried away by the sample

The walls were beautifully done up, the fittings were exquisite and the rooms were very spacious. Vijayalaxmi Nayak and her family were so pleased with the look and feel of the sample flat that they immediately booked an apartment in the project by a reputed developer in Bangalore.

The excitement died down when the Nayaks got possession of the house three years later. It was nowhere close to what they had been shown. The flooring used ordinary tiles, the fixtures were not classy and the wall finish was quite plain. “In the sample flat, the rooms looked so big and perfectly done up, but actually the size was much smaller, and the ceiling too was not of the same height as showcased,” says Nayak.

There’s very little that the Nayaks can do now because the sample flat has long been demolished and they have no photographs or documentary evidence of what it looked like. Even if they did, it would not have helped. Chances are the developer had slipped in a clause in the agreement saying that it reserved the right to alter the specifications of the property.

The Nayaks are among the legions of buyers who are routinely taken for a ride by builders, who show them exquisitely designed sample flats. There’s nothing wrong in this exercise since showcasing sample flats is a standard marketing practice. “It is an actively used marketing tool for attracting potential buyers and is more effective than brochures and websites,” says Shveta Jain, director, residential, Cushman & Wakefield India.

The problem is that, as in case of the Nayaks, the real flat turns out to be very different from the sample offering. What you get isn’t what you see. The fixtures used could be very different from the designer sanitaryware you see in the sample. Atul Modak, vice-president of Kohinoor City Project, admits that some developers use fixtures and furnishings worth almost 2-3 times the price of the flat itself. This lends a premium look to the flat, which could deceive the customer.

You cannot blame potential buyers for getting carried away by the looks of the sample flat. Builders have many tricks up their sleeves that give false impressions to the buyer. For instance, there are no doors between rooms in a sample, which makes the flat appear more spacious than it really is.

Even the toilets and bathrooms are doorless. Some of the walls are merely glass partitions. Builders say this is done to allow buyers a better view, but the fact is that it makes the house look more commodious. The ceiling itself is much higher than that of the real flat.

The interior designers hired by the builders to do up the sample flats are experts at creating optical illusions. They know how to use lighting and place furniture in such a way that the house appears bigger. Even the furniture is an accomplice in this charade.

Source: http://www.indianrealtynews.com/real-estate-india/buying-a-flat-dont-get-carried-away-by-the-sample.html

Monday 14 May 2012

Why is real estate lobby so special and powerful?

It’s now taken as almost axiomatic that no matter what kind of economic reform is proposed, someone or the other will loudly oppose it. Whether it’s insurance, or retail or pensions or airlines or petroleum pricing, the battle lines are clearly drawn,stoutly defended and often not attacked with much determination anyhow.

However, there’s one aspect of the economy where the action is mostly underground. No one stands up and opposes fixing this sector and yet, nothing happens. I’m talking about real estate. While the real estate regulatory bill is now the most thoroughly forgotten of the reforms bill, the finance minister’s quiet and unasked-for rollback of a crucial tax reform in the budget tells you how powerful the forces of status quo in the real estate are.

In the Union Budget proposals, there was one of mandating the deduction of TDS in real estate deals worth more than Rs. 20 lakh. The idea was that unless this TDS was deducted, no real estate transaction would be valid. As revenue officials explained at the time, the idea behind this tax was not so much the revenue as the collection of data. Once this happened, the cleaning up of black money and the enhancement of tax collection from real estate gains would get an enormous boost.

Unlike so much else in the budget, there were hardly any objections to this measure. But when the final finance bill was passed, this measure had been quietly rolled back. A finance ministry that has defended every piece of enhanced taxation with great ferocity has meekly given in to the forces that would like to keep real estate awash in black money and tax evasion.

It’s a great puzzle. If 1% was too much, the goal of data collection could even have been met with 0.1% or a 0.01% TDS. Does anyone have any idea about why real estate is so special?

Source: http://www.hindustantimes.com/business-news/ColumnsBusiness/Why-is-real-estate-lobby-so-special-and-powerful/Article1-855222.aspx

Thursday 3 May 2012

Chennai witnesses consistent demand for residential space

Chennai

Chennai has witnessed steady growth in its residential market in the past few years, barring the period of economic slowdown in the country. While the downturn brought the real estate market to a standstill, Chennai’s residential market has seen a rebound sooner than anticipated. With the economy springing back to action, the residential real estate market, too, has recovered strongly.

Demand has returned, prices have increased substantially and a number of new projects have been launched in the market, according to a survey by Knight Frank India.

The growth in Chennai’s residential market may be attributed to the fact that it is primarily end-user driven. Investor participation is long term in nature, thereby mitigating a speculative market scenario. Stability in the market since 2010 has instilled confidence in the end-users to proceed with their purchase decisions.

Demand was more evident in the mid-end category, primarily towards the peripheral locations of the city where majority of the affordable projects are located. Despite the subdued economic conditions, developers went ahead with their plans and several large scale projects were announced during 2011. This may be due to the fact that the Chennai market is primarily self-sustained and is not much affected by the upheavals in the global markets.

Supply and Development
Chennai is slated to witness the infusion of around 67,500 residential units in the forthcoming three years. Chennai’s south leads the market in terms of number of residential units under construction accounting for 68% of the total number of units coming up in the city, followed by the western region with 27%.

According to a United Nations study, Chennai has a deficit of around 60,000 housing units. About 6,000 of them are in the high income group segment, 12,000 in the middle income group and 18,000 in the low income group.

The economically weaker sections in Chennai need 24000 housing units. While around 67,500 residential units are in the pipeline, they will be catering to the housing needs of the high income and the mid income segments only. This has led to the demand for a change in the city’s development control rules to facilitate more residential growth.

With the quantum of supply lined up in the aforementioned categories, developers may be faced with pressure on pricing in the forthcoming quarters. However, prices are unlikely to decline drastically due to the rising cost of construction. While OMR has transformed to a preferred high-end residential destination micro-markets like Perambur and Tondiarpet towards the north and Sriperumbudur in the west are emerging as newer growth corridors with the launch of several residential projects.

Another micro market that is gaining prominence is the ECR stretch in the south which has a number of premium villa developments coming up in the next few years. However, a major issue that needs to be addressed is the lack of social infrastructure in the peripheral locations of the city which have seen majority of the projects being launched with affordable prices. Without social infrastructure, these projects shall not witness positive price movement and will have an adverse effect on their sales.

V Nagarajan, Property consultant

Source: http://content.magicbricks.com/chennai-witnesses-consistent-demand-for-residential-space

Sunday 29 April 2012

Chennai retail witnesses limited transactions

Chennai

With no new supply of mall space entering the market during the first quarter, Chennai’s high streets gained healthy leasing transaction. Limited number of transactions has also contributed to the stable rental and capital values. High interest rates, global macro-economic conditions and lack of quality mall space have resulted in fewer transactions which in turn left the financial indicators to remain stable. Vacancy levels decreased from 14% in fourth quarter of 2011 compared to 13.5% in first quarter of 2012.

The largest deal was by French Home furnishing retail chain Ebony Gautier, which took around 10,000 sqft space in Express Avenue mall.

According to Jones Lang LaSalle’s review, small format stores in the CBD were in demand during the first quarter. Canon Image studio, Gem Palace, Lasya, Kryolan, Timex, Eye T World were some of the brands which occupied vacant spaces in Ramee mall during the review period. Ground floor office buildings continued to attract retailers with Spectrum Shoppe’s leasing out around 1,900 sqft in Ambit IT Park, Ambattur industrial estate.

Lack of new mall space helped high streets to gain healthy leasing during the quarter. LG opened two stores, one in Nungambakkam high road and another in Chrompet. Louis Philippe, Van Heusen and Zimson opened shops in Adyar, while Harley Davidson and Apple opened stores in Nungambakkam. Roshal Lal women’s ethnic wear and Helios opened shops in Shanti colony, Anna Nagar whereas Reliance Trendz opened its shop in Chrompet.

A significant factor is that no new mall supply was added during the first quarter. Ten Square mall coming up in Koyambedu near the mofussil bus stand is now ready for fit-outs stage and is expected to come during the second quarter this year. This will add around 150,000 sq ft of mall space taking the total supply of city’s mall space to 3 million sq ft. In a small market, no sales transactions were recorded in the retail malls sector over the past few quarters as new malls in the city operate on lease model. However, the city’s retail segment delivers high returns on investments which compels the investors to hold on to their investments.

Outlook:
With the Union budget putting more money in the hands of avid shoppers, sales for the retailers are likely to increase, feel property consultants. Vacancy levels are likely to rise in the next 12 months amidst the supply of over 2 million sqft of mall space. Though vacancy rates are expected to surge, absorption in the new malls are also expected to improve amid flourishing residential and commercial activity in the suburbs.

Chennai saw an unprecedented number of residential project launches during the first quarter this year. Over 14,500 residential units were launched by various developers during the first quarter when compared to an average addition of 4,550 units during the past four years. The government’s clearance of pending approvals was considered as one of the major factors that contributed to the historic record number of launches in the city.

Demand for residential units skyrocketed during first quarter with over 9,500 units getting absorbed when compared to 5,076 units in 4Q11. Southern and western suburbs together contributed around 85% of the total net absorption.

Rental and capital values for retailing are likely to improve in select pockets of suburbs and in prime locations while peripheral areas may remain stable.

V Nagarajan, Property Consultant

Chennai tops in housing demand in Malaysia

Chennai

Out of an estimated 2 million NRIs/PIOs living in Malaysia, southern cities dominate the demand for investment in residential property in India. Those who have settled across Malaysia for decades are keen to invest in their second homes for holidays in India. Among the southern cities that drive demand for investment in real estate Chennai dominate due to a combination of factors.

Of late a number of expatriates working in Malaysia are from the IT sector with the establishment of Indian IT companies like TCS, Infosys, Wipro and others. In fact an exclusive zone Cyber Jaya adjacent to the government complex Putra Jaya, houses a number of IT companies from various countries rendering a wide range of services.

According to Indian banking sources, the demand for home loans continues for units located in southern cities in particular from Chennai. There are not many estate agents operating in Kuala Lumpur though a few local representatives do represent Indian properties to expatriates in Kuala Lumpur, Klang, Penang and Johor. Besides Chennai, demand for real estate investment exists for other Indian cities like Hyderabad, Bangalore, Kochi, Chandigarh and Delhi. Apart from a few property shows, periodical visits by Indian developers provide the ideal platform for exchange of information on investment in Indian real estate.

A number of PIOs who met during a convention in Kuala Lumpur recently evinced keen interest for investment in India particular in areas like real estate. Leased commercial properties are the preferred option where return on investment in the region of 10-11 per cent is desired apart from project level investments.

For NRIs, availability of property management companies is a major requirement for investment in residential or commercial properties. The influx of multinational property management companies and the availability of such services in major cities across India have not percolated down the level among NRIs in Malaysia.

According to Juliana Louis, CEO of Evershines Realtor, a local realty firm, the level of NRI/PIO demand for real estate investment in Indian cities is gradually up due to the price appreciation and the easing of investment norms by the government. Lack of adequate information on availability of property management services is a major deterrent, she adds.

V Nagarajan, Property Consultant

Wednesday 25 April 2012

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

Monday 23 April 2012

Chennai realty market rates zoom ahead of guideline values

Chennai

If you need any proof of how buoyant the real estate scene in Chennai is, here it is. In the five months since the guideline values (government-notified rates for registration of properties) were revised across Tamil Nadu, the market rates have already overtaken them by 10-45%.

The guideline value is used by the state government to assess the actual value of the property for levying stamp duty. Guidelines values were revised late last year after a gap of five years so that they would be indicative of prevailing market rates.

Growing demand for housing in the city has resulted in a steady climb in apartment prices both in the city and the suburbs over the last six months. “Hence, in most areas, the guideline value is below the market price and the difference ranges from 10% to 45%,” real estate consultant S Ramaswamy of RECS Group said.

For instance, the guideline value of land on the Arch Bishop Mathias Road in Boat Club is 18,000 per sq ft whereas the prevailing market value for the street is around 33,000 per sq ft. Similarly, guideline value for RK Salai is 19,000 per sq ft whereas the market rates are close to 25,000 per sq ft. Guideline values are on the lower side even in central business districts. Guideline value on Khader Nawaz Khan Road, which is a premium shopping hub, is only 9,500 per sq ft. Guideline value on Haddows Road is also similarly low.

Experts say prices in most parts of the city have increased by close to 20% in the last six months, going by the residential price index (Residex) brought out by the National Housing Bank.

According to recent figures, Chennai is one of the fastest growing real estate markets among all metros, but this boom is not reflected in the new guideline values finalized five months ago. Guideline values were revised after a span of five years. In the meantime, prices within city had increased two to four-fold while the jump was about five to six times in the suburbs.

However, property consultants also point out that many buyers and sellers are keen on registering properties at market price. “Whenever a property is registered for a price higher than the guideline value, that becomes the new benchmark for the locality. Hence, over a period of time, the gap between guideline and market rates will reduce,” said P Ramesh, a mediator.

While guideline values in the city are higher than market values, in the suburbs it is the reverse, and that is a matter of concern, say realtors. This disparity is partly owing to the slow growth of real estate prices in suburban areas. “Even if properties are available at lower rates, we have to pay a higher stamp duty and registration fees there as they are calculated based on guideline values, which are higher than market prices,” Chitty Babu said.

There is also a section of developers who feel that in some areas, the guideline value revision has been far too steep. “With such upward revisions, middle income people will find it difficult to buy properties in the city. Already, many of them are moving to suburban locations,” PV Sanmugam, managing director, Kgeyes Residency said. But how far this argument will cut ice is a matter of debate.

Even when the guideline values were low, builders kept apartment prices high, said P Manikandan, who ended his five-year hunt for an apartment a month ago.

Source: The Times of India, Chennai

Wednesday 21 March 2012

Velachery emerges as a key locality in South Chennai

Chennai

Velachery is growing at break-neck speed but it still manages to retain its old world charm. Take a walk down the Taramani Link Road and the by-pass road and you can see a huge crowd of hip, 20-something girls and boys hanging out at the local eateries or busy shoppers making a beeline to high-end branded showrooms that dot the main road.

Walk a little further and you are greeted by skyscrapers and large residential complexes. Amidst traffic snarls and a new landscape, this sleepy neighbourhood has etched its own metamorphosis. The new Velachery is vibrant, and is a work in progress.

“Velachery is one of the older localities with good social infrastructure. However, land is scarce as most of it has already been developed. But it is in the throes of development as builders are keen on setting up projects here,” says R Williams, a senior citizen and a resident of the area for the past 38 years.

“In the last five to six years, the locality has undergone a sea change. A lot of old buildings, particularly large bungalows, have been razed and very high-end commercial and residential buildings have come up. These have changed the very face of Velachery,” explains Stanton Morrais, Director, Vindhya Homes. “Velachery has developed into a residential hub today providing quality residential developments, commercial offices and glitzy malls with good retail options. One of the main reasons why Velachery is witnessing a huge facelift as compared to other older localities of the city, like Adyar, is its proximity to OMR. Another reason for the development in the area is its huge contribution to the IT industry. Nearly 30 to 40% of IT employees are from this neighborhood. Their exposure to modern developments abroad and demand for quality residential space has pushed up the real estate development in this area,” he adds. However, residents in the locality still like the area for its innate old world charm. “Despite the change it is witnessing, Velachery retains the flavor of good old Chennai,” adds Stanton.

N Ravichandran of True Value Homes (TVH) says, “The government lacks clarity in promoting infrastructural developments here. This locality has the potential to be a very huge separate township by itself. People of all income groups are nested here and witness the growth of the locality everyday. However, frequent powercuts and long-pending road widening projects are impediments to its growth.” Water supply lines, better sewerage system, development of link roads and stormwater disposal systems are expected to be completed soon. Besides these, a number of other projects are being implemented in the area. A number of projects – Monorail, satellite bus terminus, lake beautification, Phoenix Mall, Grande Mall, etc, have been planned in this area.

Once all the proposed retail malls, commercial buildings, hotels and commodity markets are operational in the next couple of years, there will be a surge in economic activities in the area. This will also lead to demand for real estate, both residential and commercial, in the area. “This locality has good connectivity and it will improve further in the coming years. I wanted to purchase an apartment here when I came back from the US in 2005 and I’m glad that my investment in here has proved to be a wise decision,” says Srikanth Menon, an employee of Cognizant Technology Solutions.

“Residential apartments in the locality command a very good price, particularly projects that offer the latest amenities. Prices for residential built-up areas range from 5,500 to 8,000 per sq ft, depending on the type of construction. With the opening of the Pallavaram Highway which leads to the International Airport at Meenambakkam, Velachery is the new gateway to South Chennai and is fast emerging as one of the most sought-after hotspots of the city,” says G Ramanarayanan, a real estate consultant in the locality.

Source: Times Property in The Times of India, Chennai

Senior citizen homes gaining momentum

Chennai

With nearly 100 million senior citizens in India now to cater to in the coming decades, there is a vast untapped potential for investment and development in the sector. India provides an opportunity to developers, service providers, healthcare players and operators to create solutions specific to India while leveraging learning from across the world, says Jones Lang LaSalle survey.

As per census of India projections, the percentage of elders as a percentage of total population in the country would jump from 7.4% in 2001 to 12.4% in 2026 and touch 19.7% in 2050. In 2011, India had about 76 million seniors above the age of 60 years and it is expected that this figure will grow to 173 million by 2025, further increasing to about 240 million by 2050.

In Chennai, Covai Property Centre has announced a senior specialty apartment project at Vandalur for the retirement community. The company had earlier implemented a project in Coimbatore and they are set to expand with similar units in Pondicherry, Hyderabad and Pune.

A number of leading developers who have all along be focusing on residential development in and around the city are also planning to enter the senior citizens’ homes category as they realise the huge potential shrouding the sector. Demand for such units is growing if the number of enquiries received by select developers is any indication in the city.

Unlike traditional housing complex, retirement homes for senior citizens will have to be self-contained including the setting up of a modern central kitchen with dining facilities. A medical centre with a resident or visiting doctor, resident nurse and a physiotherapist with a fully equipped ambulance will be an integral part of such projects to take care of medical needs and emergencies. Besides leisure and entertainment activities, the maintenance and support services will have to be strong with 24×7 security.

As the development of such projects will have to be in proximity to hospitals and retail centres, location plays a key role taking into account the din and bustle of city life as well. Property developers agree that suburbs and peripheral areas offer immense scope for development such projects with improved connectivity levels and tranquility is a major factor to kickstart such projects. With the migration of a number of skilled professionals from Chennai leaving behind their parents to fend for themselves, the demand for such units is likely to grow in the coming years, feel industry analysts.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/senior-citizen-homes-gaining-momentum

Sunday 18 March 2012

The two faces of OMR

Behind the modern visage, Old Mahabalipuram Road's pastoral past remains intact. We present you the striking contrast

With its imposing and contemporary structures, swanky eateries and a growing number of entertainment zones, Old Mahabalipuram Road (OMR) offers a vignette of modernity. However, a little beyond this glitz, lies a world that moves to a different rhythm, a world of freely ranging livestock and gaudily painted houses. The interior areas of OMR still bear the vestiges of village life.

Here's a slice of this contrast: About 500 mt behind the posh Aloft Hotel and the chic Express Hyundai showroom in Sholinganallur, there are houses with cow sheds. Sixty-three-year-old G. Radhakrishnan, a fifth-generation resident of Sholinganallur, says, “At least 25 families rear cows to supply their need for milk. People in these families may be employed in big companies, but they don't want to break away from tradition. Ten years ago, all the families in this locality kept cows. Those days, I had 20 cows. I have held on to three of them.” Radhakrishnan also points out the presence of ‘arasamarangal' (bodhi satva trees) and ‘veppamarangal' (neem trees) that still serve as congregating points for villagers. Another distinctive mark of the past is the temple car of a deity that is drawn through the streets during festive seasons.

Modernity and tradition

This striking interplay between modernity and tradition is probably what gives OMR its uniqueness among the major stretches of roads around Chennai. Take Arcot Road, which was once a single-lane, macadam road that snaked unremarkably through what was an aggregation of small villages. This road was freed of its rural character long ago: it no longer bears any signs of its pastoral past. The rural-urban contrast is displayed by certain sections of the GST Road, but it is not as pronounced as on OMR.

The unstoppable push of modernity will ultimately overpower OMR and recast it in a completely contemporary image, but there is reason to believe that this change is a long way off. Encouraged by the high rates of appreciation in land value, 32-year-old Manivel, a son of the soil who ekes out a living as window maker, is holding on to his one-ground house on Madha Koil Street in Okkiyam Pettai.

“During the real estate boom on OMR, local residents who owned large parcels of land sold only portions of their properties. They improved their lifestyles with the gains and stayed on,” says Manivel. “Some people have extended their houses and let out portions to IT professionals and students. Hard pressed for money, some sold their houses and cashed in on the boom and bought land at relatively lower prices in areas further down OMR — such as Thiruporur — and settled down there.”

Sabyasachi Debnath, an engineer working on OMR, believes local villagers thrive on an ever-increasing demand for living spaces. “Rather than selling their properties and making a one-time killing, they turn their properties into a steady source of income. I have seen people with single-storey houses adding an upper floor to them and letting out one-room portions to bachelors from other States employed in the offices on this road. While the demand for office space hit a plateau long time ago — thanks to software companies looking to other growing corridors to set up their offices, GST Road with its Mahindra City being one example — the demand for living spaces on OMR has been constantly rising.”

In stark contrast to most of the other major roads in Chennai, OMR experienced a big bang of development. Before the advent of the IT industry, interest in this stretch was low and, as a result, land had stayed in the hands of the locals. Most outsiders began to buy land on OMR only after real estate prices had gone through the roof.

“Local residents know that nothing sells like real estate on OMR. They are holding on to their properties because prices can only go higher and higher,” explains T. Chitty Babu, chairman of Akshaya Homes. “Many of these longtime residents — whose ancestors practised agriculture on this stretch — will continue to stay on. And the colour they bring to OMR will contrast sharply and beautifully with the ultra-modern features that are giving this stretch its distinctive character. OMR is actually taking on the character of the people that work there: young IT professionals who are global in their thinking.”

Keywords: Old Mahabalipuram Road

Source: http://www.thehindu.com/life-and-style/metroplus/article3006488.ece

Wednesday 14 March 2012

CMDA plan to digitize Chennai land records on the backburner

Chennai

A project to digitize all land records and documents in Chennai has been pushed to the backburner. It was proposed in 2007 and a Madras high court appointed monitoring committee sent a reminder in November 2011 but the Chennai Metropolitan Development Authority (CMDA) is yet to move on it.

The project, based on studies of similar models in foreign countries, was mainly aimed at making land-use systems and policies more transparent and efficient, ensuring that there would be no loopholes. The HC panel asked the CMDA to digitise all documents to ensure easy access to the public.

A highly-placed CMDA official admitted that no move was taken in this regard. “It was mainly to avoid delays in carrying out punitive measures against illegal structures. All documents, including those relating to land sites, dimensions and surrounding areas in detail, were to be in electronic form,” he said.

CMDA sources said a study would be undertaken on the quantity of documents and the quality of decades-old records. “Technical help from an external agency is a must as it will be a massive project involving lakhs of pages,” said the official. He added that a group of officials was purposefully delaying the project due to political pressure.

In 2001, Andhra Pradesh took up a digitization project and completed the pilot programme, digitizing records based on cadastral surveys, employing modern instruments and techniques. In October last, the Centre asked states to initiate digitization of land records. The National Council of Land Reforms suggested computerization of records, setting a two year time framefor a survey.

Source: The Times of India, Chennai

Chennai faces decline in PE realty transactions

Chennai

Realty deals in Chennai market have shown a gradual decline over the years. The private equity deals which peaked to 11 during the year 2010, declined to 6 in 2011 and no deal has been reported so far this year. While the quantum of funds invested during 2010 was $136 million, it went up to $154 million during last year, according to Venture Intelligence survey.

There were two exits during last year with an estimated value of $54 million. According to industry sources, while the level of interest continues to remain in realty sector, PE funds have become wary of market gyrations and prefer committing for residential projects in the changing market scenario.

“There is no dearth of opportunities for funds in the Indian real estate market today. But the real issue is the limited options available for funds to exit today”, says Ashutosh Limaye, Head of Research, India, Jones Lang LaSalle. In the absence of REITs, they can sell it to some other funds where again there are very limited options. But for residential sector exit is automatic which is one of the reason for the overriding thrust on investment in the sector, he adds.

There are two types of funds, one with greater risk appetite and keen to invest in projects that are under development and the other is conservative that prefers income generating assets where the yield will be in the region of 9-10 percent per annum. There are funds which are looking at 18-20 per cent return on investment with the project lead time spanning three years and above.

Unlike earlier, realty funds have become more matured now as they have learnt many lessons over a period of years on how India is operating, urbanisation drive, market potential and the opportunities shrouding the residential sector. Valuations have become more realistic people are looking at current market value of land.

According to industry sources, out of 300 funds that entered the Indian market since 2006, only 100 funds are active in the last five years. A checklist of criteria for selection of real estate projects includes track record of the developer, transparency, market volatility, demand for quality homes, infrastructure in the city in terms of master plan, tolerance of people, cosmopolitan outlook, etc.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/chennai-faces-decline-in-pe-realty-transactions

Tuesday 13 March 2012

Surge in demand for developed plots in Chennai

Chennai

The growth corridors of Chennai and the resultant infrastructure development have pushed the land prices to a new high. As a result, there is a spurt in demand for developed plots in peripheral and suburban areas. Investors prefer developed plots in the medium to long-term so that it will serve as a hedge against inflation.

Due to surge in demand, land prices in plotted development projects are up by 12% in the last one year alone in specific areas like Singaperumal Koil, Sunguvarchathiram-Wallajahabad road, Sriperumbudur and Trivellore. With the improvement in connectivity levels and proximity to both rail and bus transport, there has been a sudden spurt in the number of plotted development projects mushrooming in peripheral and suburban areas. While some are sold as plots others are keen to undertake housing development especially when it is developed on a larger land area.

According to land developers, those looking for a 5-year horizon investment period should invest in areas within 50 km radius of the city and those looking at a minimum investment period of 7-10 years can opt for 100 km radius. It is only then substantial return on investment can be derived as connectivity levels and infrastructure development take time and play key roles in deriving the maximum yield for investors.

An estimated 10 private limited companies are developing land development projects with a range of amenities like landscaping, clubhouse and 24×7 maintenance services. There are several unorganised players in the market.

Plot loans are available from a few institutions but at a higher lending rate and the quantum of loan are restricted to the guideline value of the property which is less than the market value. This increases the upfront margin money for investors seeking plot loans. A majority of the housing finance institutions insist on construction within the prescribed period and so investors may not be able to benefit much out of plot loans if the intention is to just make medium to long-term gain.

There are ground realities for investors before plunging into plotted development projects. Among the basic documents that need to be verified include title deeds, revenue documents like Patta, chitta and adangal, encumbrance certificate for a minimum period of 30 years, sanctioned planning permission from DTCP, authentic document to establish the identify the vendor, etc.

Source: http://content.magicbricks.com/surge-in-demand-for-developed-plots-in-chennai

Sunday 11 March 2012

Redevelopment in Chennai poised for next major leap

Chennai

Strategic location advantages, vast open area, eligibility for higher FSI and an ever ready developer community to convert the existing site into a modern day multi-story apartment complex have all made erstwhile Tamil Nadu Housing Board occupants to wonder how best they can make better use of their crumbling units in prime city areas in Chennai. There are at least 10 medium to large-scale developers who have undertaken the task of redevelopment assignment in main areas in the city. An estimated 1,000 such projects may undergo transformation spinning a huge opportunity for both developers and occupants.

The momentum has already started and the coming years will see Chennai’s vibrant city areas like K K Nagar, Anna Nagar, Thiruvanmiyur, Besant Nagar, Korattur and Mogappair replacing housing board units with private multistoried buildings with better amenities, higher FSI, and a chance for the owners to earn monetary incentives as well in some cases. There are areas where the frontage is substantial ranging from 500 to 700 ft.

Among the city’s developers who have undertaken the development include Ramaniyam, KGS, Pushkar Properties, India Builders, Landmark, Green Peace Foundations and a few others.

Enhanced FSI from 1.5 to 2.1, opportunity to use premium FSI, possibilities of mixed development, leverage to get additional amenities like covered car park, lift, gym, club house and children’s play area are the cascading affects of redevelopment for housing board flat owners. Industry experts say that it is a win-win situation for both the developers and those owning the housing board units to realise their lifetime of living in large sized units with better amenities and that too within the city areas. Moreover, increased rental prospects will be a big boon to those in the retirement ages for whom the main income would be from the housing units.

All said and done, it will be a time consuming process as housing board projects vary in sizes and the association members will have to marshall the efforts of those who may not agree to the terms and conditions prescribed by the developers. Yet, many developers have already made in-roads in this area for whom a big redevelopment opportunity is awaiting to be encashed in the coming years.

Source: http://content.magicbricks.com/redevelopment-in-chennai-poised-for-next-major-leap