Chennai
Chennai has seen tremendous growth, in terms of residential real estate, over the years. However, most of the development seems to be concentrated in the South. The North is comparatively out of the radar.
One is a posh residential haven; the other, an industrial hub. While the former is urbane in character, the latter is known primarily for its innate rustic, old-world charm. The South and North of Chennai couldn’t be more different – geographically and culturally. With urbanisation and growth, some of these differences are blurred and may no longer hold true, yet one cannot ignore the disparity in development between these two pockets. The South, undoubtedly, seems to be the preferred option when it comes to residential real estate. While problems like poor infrastructure, bad roads, garbage disposal, etc, are common across the city, these issues are more pronounced in North Chennai, and in some cases, hinder its progress.
However, the North, despite its hurdles, is slowly charting its own growth story, a metamorphosis, if you like. In fact, the city of Chennai has its roots in the North, in Georgetown, near Fort St George. Areas like Parrys, Perambur, Royapuram, Broadway, etc, are historically significant with a lot of heritage buildings dotting their landscape. As the city expanded southward, the North began to shrink in significance, especially in the residential real estate sector. Why has the North been sidelined? N Hariharan, Office Director – Chennai, Cushman & Wakefield, explained, “North Chennai has traditionally been the hub for industrial and warehousing facilities due to its proximity to the port. This part of Chennai has only recently witnessed infrastructure developments and good quality residential developments which has resulted in real estate growth in select pockets. Lack of quality residential development has also been a primary cause for subdued real estate activity in this region.” According to him, the residential development in the North Chennai has been restricted to certain locations including Tondiarpet, Perambur, Mint among others.
Developers cite several reasons for the lack of quality residential development in the North. D Charles, VP, Green Tree Homes, attributes it to non-availability of large parcels of land. He said, “The South has a huge land bank, so large projects can be put up. The North, however, does not have the luxury of space. Hence, only re-development projects are possible.” His company has primarily developed high-end apartments and villas in South Chennai and is currently planning a 160-apartment project (not named yet) in Korattur. He believes that Korattur has the potential to become the next Anna Nagar. “Anna Nagar is saturated now and Korattur is just a few kilometers from this area. It has its own railway station; besides, with the Metro Rail in Anna Nagar, Korattur is set to become a residential hub, very soon,” he added.
Another reason for the slack in residential activity in the North, as Sandeep Pantvaidya, VP – Marketing, Sales, CRM of SPR &RG Constructions Pvt Ltdputs it, is less focus on SEZs and IT/ITes by the government. He said, “There is a general perception that the North is down-market and investors may not reap valuation benefits here, as they do in the South.” So what North Chennai seems to need is an image makeover of sorts. Areas like Mint, Vepery, Perambur, Tiruvottiyur, Royapuram, Avadi and Ambattur, he adds, look promising, from the real estate point of view. In fact, the group has a 154-project apartment complex, Osian Heights, in Mint, which is almost sold out. In addition, the group is also looking at constructing high-end apartments in Vepery.
Land rates in parts of North Chennai vary between Rs1,500 to Rs6,000 per sq ft. A string of infrastructural initiatives like the Metro Rail up to Ennore and Manali, the Elevated Expressway from Maduravoyl to the Chennai Port, the development of a new port, Kattupalli, the Padi-Ambattur flyover, the new bus terminus at Broadway, etc, will drive growth in North Chennai, said developers. Despite these projects and the soaring prices, issues like bad roads, poor sanitation, infrastructural problems, traffic, congestion, non-availability of land, etc, continue to plague the North. “Only a collaborative effort between the city administration and the public can help provide permanent solutions to these problems,” believed Sandeep.
It is because of these issues that the focus has, for a long time, been on the South, which has comparatively better infrastructure and larger land cover, making it less congested. Where the North lost, the South gained. The easy availability of land at lower rates, the growth of the IT, technology and BPO sectors have made South a more promising destination for both developers and customers.
According to most developers in the city, the pattern of growth has always been southward. T Chitty Babu, Credai president and chairman of Akshaya Homes, said, “If you look at most cities across the world, development has always headed to the South. But I cannot attribute any particular reason for this trend. New commercial developments, increased job opportunities in the IT and automobile sectors over the last 10 years have increased the requirement for homes.”
“Velachery is one place that has witnessed immense development. Proximity to the IT corridor and the Velachery MRTS Station have spurred the increase in land rates,” he added.
The OMR (Old Mahabalipuram Road) corridor, extension of the MRTS (Mass Rapid Transit System), the desalination plant on ECR have only added to the growth prospects of the South, he said, “We have built several properties along OMR, GST Road and have always found buyers. Though in terms of physical infrastructure and basic facilities like water and garbage clearance, both South and North score quite low, at least there is hope in the South. But I cannot completely give up on the North. The infrastructure, mainly built by the British, has stood the test of time,” Chitty Babu said. If the city administration does not get its together, there is no point in having facilities like Metro Rail, MRTS and BRTS, he said. “People are expected to use public transport. But how do they do that unless there is connectivity to the railway stations and the airport? Most infrastructure projects come up without any long term planning. This hinders growth. Unfortunately, the authorities do not realise this. Hopefully, the present dispensation will score better on this front,” he added.
For some developers in the city, the North is an unattractive location as they feel the purchasing power here is quite low and the demand for high-end homes hardly exists. R V Shekar, managing director of Lancor Holdings, said, “The northern parts of the city are mostly populated by blue collar workers. So there is hardly any demand for premium homes. Flats are available even at prices between Rs 15 to 20 lakh. The infrastructure is quite poor and the area is very congested. The South definitely holds promise due to the high growth rates here in recent times which has been fuelled mainly due to the IT sector.” Apart from the OMR corridor, ECR and GST Road, areas like Mogappair and Velachery have also seen major growth, he said.
The company has a huge apartment complex — Abode Valley — coming up in Potheri, of which 400 flats have already been handed over to the buyers. Lancor Holdings has already constructed and sold homes worth between Rs 75 to 80 lakhs on GST Road. According to Shekar, rates in Shollinganallur and places like Thiruvanmiyur have gone up to Rs 5,000 from Rs 2,600 and to Rs 10,000 from Rs 7,000 respectively in just the last two years. The extension of the Metro Rail, better roads and better connectivity will only increase the pace of growth in the South, he says. The firm is set to announce five major projects in the next six months, which will come up places including Nanganallur, Sriperumbudur, Shollinganallur and Guduvanchery.
But not all developers agree that only the southern parts of the city have witnessed growth. Suresh Jain, managing director, Vijay Shanthi Builders, who have constructed some high-end villas and premium apartments in the South, feels development has been almost across the city. “That the North has been left behind in the growth story is just a perception. Property prices are going up everywhere. But the difference lies in affordability. As the outskirts on the southern side are developing people are able to buy huge houses and villas at comparatively lower prices. You can buy a flat at about Rs 3,000 per square feet even now in places like the OMR corridor,” he said. The firm has constructed property in the premium category along the OMR, on Kelmabakkam-Vandalur Road and near the Tidel Park.
While he does admit that South is witnessing a lot of development, he says the North scores in terms of availability of schools, colleges, several large department stores and better railway connectivity. “Though all my projects are in the South so far, I would love to develop a project in the North,” he said.
Developers may not be in agreement over the growth potential of the North and South, but they are unanimous in saying that unless better infrastructure facilities like proper public transport, better roads and basic amenities like water and garbage clearance is provided, Chennai’s growth story may be continue to remain haphazard.
Harini Sriram and Sangeetha Nambiar, Times Property, Chennai
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