Retail property values remain stable in Chennai

Chennai

The trend in the absorption of retail space in malls remained dormant in third quarter as limited options in existing malls have made the city’s high street locations more attractive to retailers. However, with significant amount of mall space in the advanced stages of construction, preleasing in upcoming malls is taking place at a brisk pace. Therefore, the malls scheduled to become operational over the coming quarters are expected to open with good occupancy levels, according to a survey by Jones Lang LaSalle.

Vacancy rates in third quarter remained stable at 11.2 per cent given the lack of major leasing activity in the quarter. They have been declining for the past year as Chennai has seen no new malls entering the market for almost 12 months now.

During third quarter, Pothys, a large Chennai-based department store, leased around 60,000 sq ft at GN Chetty Road in T Nagar. In addition, retailers such as Sony Center and Blackberry ready-made store opened stores in CBD locations, while a prominent eat-out outlet, Adyar Ananada Bhavan, opened a restaurant in Chrompet on GST Road.

Retailers on Chennai’s high streets have started preparing to cater to increased demand during the upcoming festive season, erecting temporary structures to accommodate their expanded product portfolios and extra inventory.

Supply

No new supply was added in third quarter, although a massive 2 million sq ft is expected to be on the market in the short-term as Prestige’s Forum Mall in Vadapalani, the Market City Mall and the PS Grand Mall in Velachery, and the Ten Square Mall in Koyambedu are all expected to become operational over the next six months.

Domestic macro-economic conditions and, more importantly, the lack of quality mall space resulted in no major transactions in the quarter, which in turn kept financial indicators stable. Nevertheless, with pre-leasing taking place at significantly higher rates, it is expected that rents may increase in the short term as the new malls become operational.

Cautious leasing by retailers largely kept high street rents stable, although emerging high street locations on GST Road, Velachery and the neighbourhood are expected to see rental growth in the short term.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/retail-property-values-remain-stable-in-chennai

Resale property prices in Chennai reach a new high

Chennai

With Chennai’s residential property prices consistently moving north, location specific homebuyers are keen to settle for resale units available in city areas. Proximity to educational institutions, hospitals and retail facilities convince them to opt for resale properties.

Moreover, those looking at investing in larger units in city areas are also keen to dispose of their existing city units and opt for new units through bridge finance. All these compelling factors have virtually pushed the prices for resale apartments to a new high.

The price mismatch between old and new units is narrowing down to just 20-25 per cent now due to surge in demand for resale units, according to industry sources. Here again the demand varies depending on the specific location and property developers have a long waiting list from location specific customers for booking new units as and when new projects are launched at city locations.

For instance, in Kodambakkam while the new units are quoted anywhere between Rs 9,000 and Rs 10,000 per sqft, a resale unit deals took place place at Rs 6,500 per sqft, say realtors. Similar is the case in Nungambakkam at Rs 8,000 per sqft and Nolumbur at Rs 4,000 per sqft.

The demand for resale units particularly for middle class budget segment has been strong and growing, feels H Balasubramanian, Managing Director of Bhoomi Realty. The apartments coming up for resale are mostly located in gated community developments and in proximity to a range of facilities which makes life a little bit easier for Chennaites to avoid commuting long distances, he adds.

The demand for resale units is particularly strong in city areas like T Nagar, Nungambakkam, Chrompet, Nanganallur, Velachery, Nolumbur, Anna Nagar, Adyar and Besant Nagar apart from suburban locations like Sholinganallur on the IT corridor. There is a growing demand for other areas as well but the demand hinges on competitive pricing.

Even housing board flats with larger UDS are in big demand in areas like Besant Nagar and Kotturpuram as city land prices are soaring, says Murali, a realtor with Estate Points. With the redevelopment trend gaining momentum people are keen to invest in resale units now, he adds.

According to realtors, the trend is likely to continue until infrastructure development improves in suburban and peripheral areas with the emergence of more educational, health and retail amenities and connectivity levels.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/resale-property-prices-in-chennai-reach-a-new-high