The year 2011 witnessed significant developments that impacted the Indian economy. Rising interest rates, global uncertainties, declining foreign investments, dip in GDP, et al. The real estate sector is by no means an exception especially with limited access to funds by developers, increasing debt and PE funds’ higher expectations.
For end users in housing, the timing is just right as the government is all set to hike the guideline values for registration purposes during January which in turn might increase the housing cost. For medium to long-term investors, developed plots offer potential scope for price appreciation. Here again location and proximity to state or national highways with ongoing infrastructure development should be considered before plunging into investment.
Sriperumbudur and Wallajabad areas are cited as potential areas in Chennai awaiting a number of integrated township projects and limited projects now on offer for blue collared workers in the area. Prices range from Rs 500 per sq ft off main road and industry analysts expect the rates to double in a span of five years, if not earlier.
For HNIs and those having liquidity, the better option is to go for pre launch offers as developers are keen to negotiate on apartment prices and offer discount for upfront payment. A typical investor keen to invest Rs 40 lakh – Rs 50 lakh for a 2-BHK unit with an area of 1200 sq ft can anticipate a return of Rs 800 per sq ft in two years in an average location in Chennai. Besides he has the option either to go in for registration of the unit or exit.
As residential development revolves around growth corridors like OMR, GST road and Oragadam-Sriperumbudur belt, even rental prospects appear better as corporate leasing demand is inching high due to the influx of skilled professionals to the city. In fact leading property developers on GST road have firm commitments for ongoing projects from select corporates for leasing once the projects are ready for occupation.
As regards commercial property, the yield depends on the scale of investment. For large scale investors, it varies from 9 to 11 per cent per annum pre-tax whereas for investors with a targeted investment limit of Rs 10 crore and below, the yield ranges from 7 to 9 per cent per annum pre-tax. Blue chip tenants do not prefer buildings strata title, as a result the commercial property transactions are now seeing a trend where developers are only selling the whole building or at least one owner per floor. This leaves limited room for retail investors, and the opportunities are limited to the high net worth individuals.
Source: http://content.magicbricks.com/investment-potential-area-in-chennai-in-2012
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