OMR becomes good investment option in Chennai

Chennai

If you are one of those looking to invest in Chennai, Old Mahabalipuram Road (OMR) is one of the ideal destinations to own a property. And new projects are driving the demand in the area.

Since its inception in 2008, OMR has become home to many IT/ITES companies. “The increase in commercial activities has brought about subsequent development on the residential front, so much so, that today it is one of the wisest destinations to invest in,” says R Murugesan, CEO, Sriram Properties. Upcoming projects at various stages of construction makes OMR a sought after destination.

Under-construction projects

For those who can wait for a year or two, Swanlake by Purvankara Projects Ltd and Jeayam Samraj by Jeayam Shelters Pvt Ltd are coming up with 2-3 BHK units by 2013. While the apartments by Purvankara are sized between 1,000 and 1,800 sq ft and priced at Rs 50-70 lakhs, the apartments by Jeayam Shelters are sized between 800- 1000 sq ft and are priced lower at Rs 30-50 lakhs. Another project, Alta Vida by Yuga Homes in Thaiyur will also be ready by 2013.

Other projects on OMR include Akshaya Developers and Shobha Developers. They are offering 1, 2 and 3 BHK units with an area of almost 600-1800 sq ft. Both the projects are currently priced around Rs 3,000 per sq ft and will be ready by 2015.

With many such projects in the pipeline, demand for residential properties in on a rise. “30-40 per cent of the buyers today want to invest on OMR,” says T R Hari of Bhoomi Developers.

“OMR has seen a capital appreciation of about 50 per cent in the last 5 years,” adds Hari.

Ready to move in projects

It is not just under-construction projects, even ready-to-move-in projects in OMR drive demand. Some of these include Anantya by Indus City, Frangipani by Arihant Foundations and Bollinoni Hillside by BSCPL Infrastructure Ltd. Both Anantya and Frangipani offer 2-3 BHKs of different sizes.

“While Anantya offers sizes varying from 1200 to 1800 sq ft in an average price of Rs 3,800 per sq ft, Frangipani offers 760- 1140 sq ft in Rs 3,600 per sq ft,” says Abhishek Chandak, Infinite Foundations and Realty Services. On the other hand, Bollinoni Hillside offers apartments (1-5 BHKs) and independent houses in sizes ranging from 650- 3000 sq ft in Rs 4,500 per sq ft.

Shradha Goyal, MagicBricks.com Bureau

Unauthorised plots in Chennai bought till 2007 may get approval

Chennai

There’s relief on the way for people who have bought plots in unapproved residential layouts. If the state government has its way, all residential plots registered before July 1, 2007 will be given approval after levying a penalty, as has been done in the case of illegal buildings.

Following a proposal from the Chennai Metropolitan Development Authority (CMDA), the government is contemplating relaxing norms for approval of unauthorized layouts that have proliferated over the last few years in the Chennai Metropolitan Area (CMA) and in areas under the jurisdiction of the Directorate of Town and Country Planning (DTCP).

The suggestion was made at a meeting of the CMDA’s top decision-making body. As of now, only residential plots registered before December 31, 1989 are approved under the regularization scheme in operation in CMA limits. However, on receipt of the CMDA proposal, the government has taken a view that instead of limiting the exercise to CMA, it should look for a comprehensive solution to all unapproved residential layouts that have sprung up across the state. In this regard, the state housing department has chosen to work in coordination with municipal administration and rural development departments.

A senior official said, “Since municipalities that fall under the municipal administration department and village panchayats under the rural development department have been delegated some powers to approve plots, any solution without taking them on board will remain a piecemeal effort. We also need to involve the land registration department also to ensure that registration of unapproved plots do not take place in future. Otherwise, once we regularise old violations, there will be new violations. The chief secretary will soon convene a meeting to finalise the action plan”.

A CMDA official said the problem of unauthorised plots was not a major one in CMDA limits, where the regulatory body has done zoning of all land, determining their use. But in DTCP limits, very few cities and towns have prepared development master plans.

A DTCP official said, “Unapproved residential layouts continue to spring up across the state. Many promoters who are stuck with large areas of agricultural wetlands are converting them into residential layouts and selling them with the connivance of village panchayat presidents and ward members. Despite the government clarifying time and again that approvals from village panchayats have no legal sanctity and buyers cannot avail bank loans on such plots, people continue to buy them”.

The problem became acute after the state imposed restrictions on conversion of agricultural wetlands into residential plots in January 2011. “The government should ban firms selling unapproved layouts from real estate activity and take strict action against panchayat presidents and ward members who approve unauthorised layouts,” a realtor said.

Source: The Times of India, Chennai

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

RESIDENTIAL DEMAND and SUPPLY ANALYSIS OF CHENNAI..!

The advent of the IT sector along with the setting up of large manufacturing units by multi-national companies (MNCs) have changed the dynamics of Chennai real estate market. Apart from generating thousands of new jobs for the local residents, Chennai has been attracting a large pool of migrants into these sectors from across the country. This has enabled the real estate market to grow at a tremendous rate during the last 5 years especially residential segments which witnessed the launch of more than 1,05,236 flats (units) since 2007.

During 2010 and 2011, more than 49,955 units were launched in Chennai. However, only 33,938 units were absorbed during this period resulting is a significate jump in the unsold units percentage. the percentage of unsold units during the first nine months of 2012 has further increased despite the number of new launches falling drastically.

This is primarily because of the supply overhang of the previous years. Chennai is land locked on the eastern side by the Bay of Bengal, thereby restricting its growth to the remaining three sides. Backed by excellent rail and road connectivity, the city has been expanding three (3) ways over the last few decades.

However, development on the northern side is subdued as compared to West and South Chennai mainly due to the presence of various industrial pockets and port related activities here.

Over the past few years, the focus of developers has been shifting from Central Chennai to the peripheral areas of South and West Chennai due to greater availability of jobs here.

Year      % of Unsold Units

2007                5%

2008                4%

2009                7%

2010                12%

2011                21%

2012               * 25%

* Till September 2012

Knight Frank - Chennai

No.3, Gitex Building, IIIrd Floor,

Khader Nawaz Khan Road, Chennai 600 006.

Phone: + 91 44 4296 9000

Source: Knight Frank Research

High-end properties in demand in Thiruvanmiyur

Chennai

Thiruvanmiyur is a well developed residential area within Chennai corporation limit. It is located in south Chennai and offers wide range of properties and healthy absorption rate. This is primarily attributed to its connectivity to city centre and the IT corridor OMR. Connectivity and well developed social infrastructure has consistently boosts up residential demand for both purchase and rent. This is well reflected in the average change in property prices in the past months.

D Charles, Sr V.P, Sales Marketing, Green Tree Homes says high paid professionals and businessman prefer to stay in Thiruvanmiyur. This is primarily attributed to available of furnished apartments in a gated community with all modern lifestyle facilities and amenities. Has good number of schools, colleges, hospitals, beach and local shopping complexes. Thus the availability of good social infrastructure facilities, connectivity to IT corridor and city centre makes it one of the preferred residential areas in south Chennai.

Residential development

The area has mix of small and large scale projects and offers all BHK configurations. It has got maximum demand-supply of traditional unit sizes 2 and 3 BHK. A 2BHK unit sizes ranging from 900 to 1200 sqft are in maximum demand for both outright purchase and rent. An average sale price of a multi-storey apartment ranges between Rs 8,450 to Rs 11,700 per sqft. The area offers excellent demand for properties on lease. A semi-furnished 2BHK apartment commands average rental of Rs 15,000 to Rs 18,000 per month says, K.Chandershekhar, M.D, Rajam Property Management Services Pvt. Ltd. He further ads, growing demand for spacious property with modern lifestyle boosts up 3BHK apartments. A 3BHK apartment in high-end projects command average rental value ranging between Rs 30,000 to Rs 50,000 per month for unit size 1500 to 1800 sqft.

In spite of being one of the most preferred residential developments, the area still offers a lot scope of physical infrastructure development. Charles says, execution of announced road widening projects is expected to maintain the consistent demand for residential and commercial properties in future.

MagicBricks.com Bureau

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

Residential property launches dip by 30% in 2012: Report

Mumbai, Jan. 9:

High property prices, relatively higher mortgage rates and overall weak business sentiment resulted in residential launches declining by 30 per cent in 2012 compared to 7 per cent in 2011 in top six markets of Delhi-NCR, Mumbai, Pune, Bangalore, Hyderabad and Chennai.

This was highlighted in the latest research report by real estate consultancy Knight Frank.

Residential housing absorption in these cities also fell by 16 per cent during 2012 against 14 per cent in 2011. Among the top 6 cities, NCR led the residential market in terms of absorption as well as launches for the three-year period between 2010 and 2012.The report further said that NCR and Mumbai together accounted for almost 60 per cent of the total absorption in the top 6 cities followed by Bangalore (13 per cent), Pune (11 per cent), Chennai (9 per cent) and Hyderabad (7 per cent).

The report also points to a reducing gap between the residential launches and absorption numbers to 32,000 in 2012 compared to 82,000 and 94,000 in 2010 and 2011, respectively.

“Taking a cue from the market, developers have become more rational in launching their projects. This can be seen by studying the gap between the launch and the absorption numbers,” added the report.

The report also pointed to a tapering off of growth momentum in housing loans disbursed by the banks. According to data sourced from RBI in the report, ‘housing loans’ which indicate the credit extended to developers for construction activity have shown a slowdown in growth momentum post June 2012.

“High residential real estate prices along with relatively high mortgage rates have led to this downfall. Similar is the fate of the commercial real estate sector. Bank’s credit exposure to developers has fallen from its peak growth rate of 23.21 per cent in June 2011 to 3.88 per cent according to the latest reported data on September 2012,” added the report.

For the original post visit: http://www.thehindubusinessline.com/industry-and-economy/residential-property-launches-dip-by-30-in-2012-report/article4290521.ece