A rise in plotted development projects in and around Chennai

Chennai

Industrial growth, better connectivity and infrastructure development have led to a spurt in the number of plotted development projects in and around the city. While there is a constant demand for apartments, villas and other housing projects, over the years, there has been a rise in the demand for plots as well. S Ramaswamy, Assistant director, RECS Group, says, “GST Road, Sriperumbudur-Oragadam belt and ECR are the top three growth corridors that have seen a surge in the demand for organised plots. There is a good demand for plots in and around Chennai due to factors such as good road connectivity and the horizontal industrial development in the suburbs. The availability of transportation facilities plays a major role in the organised plot development market, especially on the outskirts of Chennai.” S Mohan, MD, Wisdom Properties, says, “Individual plot development in and around Chennai is on the rise.”

Mohan says, “The primary areas include the Southern Suburbs comprising Chengalpattu, GST Road, Oragadam till Kanchipuram and the Eastern Suburbs – areas till Mahabalipuram. Development in the Central suburbs that include prominent localities such as MRC Nagar, Triplicane, Teynampet, Nungambakkam and T Nagar will gradually pick up over the years.”

He adds that with the number of software and manufacturing industries foraying into the city, the demand for plots in peripheral and suburban areas of Chennai has increased manifold. “There are a number of employment opportunities in the city, and people migrate not only from other states but countries as well. This has further increased the demand for plots,” he adds.

Highlights of the three primary growth corridors

GST Road

- Proximity to already developed areas such as Tambaram and Guduvanchery

- Connectivity by rail and road to localities such as Oragadam and areas along OMR

- The presence of a number of industries such as the Maraimalai Nagar Industrial Estate, for instance

- A viable investment for future developments, thanks to the kind of residential and industrial development along this belt

Sriperumbudur-Oragadam

- Hub of industrial development in the city – An affordable alternative to investing in apartments

ECR

- Good connectivity and proximity to the city centre – Proximity to OMR and prominent IT establishments – Scenic beachway with good social infrastructure

Source: The Times of India, Chennai

Chennai’s residential property market buoyant

Chennai

Chennai’s residential property market has witnessed a steady growth in terms of pricing, demand and supply in the past two years post the economic recession. The city has typically been a base for the automobile/auto ancillary industry and is one of the premier port cities in the country.

With the advent of the IT sector, Chennai’s residential real estate market has become increasingly dependent on its growth and expansion for continued residential demand. The current scenario of job stability in this sector is at a much better position than it was during 2008- 2010, according to a recent survey by Knight Frank India.

Despite the subdued economic conditions, developers have gone ahead with their plans and several large scale projects have been announced during FY 2012. The period witnessed the launch of approximately 14,900 units which are scheduled to be completed in the next 2-3 years. This optimism shown by developers may be due to the fact that the Chennai market is primarily self-sustained and not much affected by the upheaval in global markets.

On the pricing front, nearly 74 per cent of the total number of residential units launched in FY 2012 fell within the Rs 5 million ticket size categories. Several prominent developers strove to tap the affordable housing segment with their new launches. Another 14 per cent of the residential units launched in FY 2012 belonged to the Rs 5.0-7.5 million ticket sizes, catering to the needs of the upper mid-end segment. On the other hand, just 9 per cent of the total units launched in FY 2012 surpassed the ticket size of Rs 10 million to fall into the premium segment.

As of March 2012, nearly 82,000 residential units are under various stages of construction in the Chennai market. While southern region will account for a significant share of around 59 per cent, west Chennai will contribute 33 per cent, followed by the northern region with 5 per cent and central Chennai with 3 per cent.

An important trend witnessed is the change in the preference for unit size. The preferred size for 3BHK flats has increased from 1250 sq ft to 1450 sq ft while for 2BHKs from 900 sq ft to 1150 sq ft. The vacancy level as on March this year was recorded at approximately 31 per cent with the southern part alone constituting 30 per cent while north and west Chennai have vacancy levels of 32 per cent and 33 per cent respectively. Central Chennai has a lower vacancy rate of 22 per cent.

Chennai’s residential market has been quite resilient to the looming threat of global economic turmoil but the market witnessed a dip in sales velocity in Q3 FY2012, compared to the previous two quarters. It has been envisaged that the corridor between Sholinganallur and Tiruporur in the southern belt will be the next investment destination for residential property in the city. Yet another option is the Sriperumbudur-Oragadam belt towards the west which is one of the best options with large manufacturing companies and MNCs expanding their footprint there.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/chennais-residential-property-market-buoyant

Empee Group to foray into real estate business

Empee Group, which is currently into the businesses of hospitality, liquor, sugar and power, is planning to foray into the real estate sector. The company is planning to set up two residential projects with an investment of around Rs 400 crore in Chennai, according to a top official of the company.

The company would start two projects on a land bank of around 20 acre in Kuthumbakkam, between Poonamalle and Sriperumbudur in Chennai, to offer around 1,000 apartments in the next three years.

This includes a 1.25-million project comprising around 800 house units and the other with 250,000 sft with around 200 units . The projects, targeted at the medium-segment customers, are expected to go on stream by the end of 2012.

“With the land bank we have, we thought of entering into real estate way back in 2007. However, the market was not good then and hence we had to hold back the proposal. Now, with think it is time to start our real estate operations,” said Nisha Purushothaman, vice-chairperson of the Empee Group.

The projects would be executed through the group's building construction arm, EDL Properties Private Limited. The project management team of its hospitality business, which includes the Hilton Hotel that was opened last year, would share its expertise in addressing all the issues concerned in detail.

“The location of the land bank and its access to the highway and the main road would give us an advantage in sales. Real estate is an area which we would develop our expertise into. We look at it seriously and plan to be in it in the long-term,” she added.

The company also has another 25 acre, mainly in Chennai, which would also be used for real estate development in future. Initially, the focus would be on residential projects.

The Rs 1,500-crore Empee Group has recently revealed its plans to set up a mega thermal power project of up to 1,320 Mw in Tamil Nadu with an investment of around Rs 6,500 crore. The company has also reentered the beer market.

Source: http://www.business-standard.com/india/news/empee-group-to-foray-into-real-estate-business/480498/

Chennai witnesses rise in demand for villas

Chennai

According to a recent survey conducted at a property fair at Edison, New Jersey, an estimated 31% of the visitors preferred Chennai for investment. The report also revealed that the Chennai real estate market is witnessing a growing demand for villas as compared to conventional apartments.

Rajesh Babu, Founder of RECS Group, a city-based real estate consultancy firm says the main advantage of owning a villa is having complete ownership of land. “Such properties have better resale value and, if not bound by a clause, the owner has the right to demolish and reconstruct a structure in the future as well. When compared to apartments, a villa does cost more, as the cost of land is involved, but they are ideal investment options and come with a range of amenities.”

S Ramesh, a city-based business professional feels investing in a villa is beneficial in the long run. “I have been on the lookout for viable investment options in the city and I have booked a villa on an upcoming project on OMR. The range of amenities that they offer cannot match any apartment,” he says. Elaborating on the preferred locations for villa projects, Rajesh adds, “The top locations include ECR, OMR, Sriperumbudur/Oragadam and GST Road. Suburban and peripheral locations are preferred for villa developments and there is limited development of such projects within the city due to the non-availability of land parcels inside the city and their high costs,” he says.

Considered a viable investment option, there is a rise in demand for villa projects on the outskirts of the city, especially among NRIs (mainly the US, South Asian countries). The Town and Country Project, being developed by Lancor Holdings at Sriperumbudur, is said to house over 400 villas and caters to this very niche segment. R V Shekar, Managing Director, Lancor Holdings, is confident that the first phase of the project will witness 50% investment from NRIs. “The trend of NRIs investing in villa projects within the city is on the rise and they make for perfect summer homes, besides being great investment options.”

Each villa comes with its own exclusive garden, two car porches, terrace, sit-out areas and combines the luxuries of an independent home with the advantages of a the lifestyle of a gated community ,” he says. Suresh Jain, Managing Director, Vijayshanthi Builders, says villa projects cater to a premium and niche segment of buyers. “Investing in a villa has a range of benefits such as amenities, privacy, no overhead costs and security. With land prices being on the rise, villa projects fare better than conventional apartments, from an investment perspective,” he says.

Highlighting the advantages of such projects, Rajesh adds,”Well-made roads, gardens/landscaping, parking areas, play areas, swimming pools, gymnasiums and club houses are common amenities found in any such project. Different formats are available to suit the needs of different categories.” Pratish Devadoss, Managing Director, VGN Properties, says the concept of mixed development caters to a wider segment of buyers and has its own benefits.

“Constructing apartments and villas as part of the same project offers buyers a range of options. Villas are mainly purchased by individuals from high income groups. Chennai is catching up with the trend after cities such as Delhi, Bengaluru and Hyderabad.”

While most villa projects are developed in the outskirts, Naresh Jain, Managing Director, Influence Infrastructure, decided to set up a project in the heart of the city. “Apart from two similar projects on ECR, the current project ‘Masterpiece’ is coming up at Nungambakkam. There is a huge demand for such projects even within the city and thus I decided to venture this untapped segment.

People are willing to invest 15-20% more than a conventional apartment and the wide range of world-class amenities that we offer make it a wise investment option. Also, the per sq ft usage is more in a villa rather than an apartment which is a hidden advantage,” he says. Each villa sprawls across 4,250 sq ft and will cost Rs 9 crore on an average. “In my opinion, the amenities offered in a villa project make all the difference. An underwater gym, snorkeling bay, indoor gaming arena, swimming pool, spa are some of the amenities that will be part of every villa,” he says.

Nidhi Adlakha, Times Property, Chennai

Source: http://content.magicbricks.com/chennai-witnesses-rise-in-demand-for-villas

Oragadam gets a facelift

Chennai

From a docile suburb to an industrial hub of Chennai, this is how Oragadam has been transformed in a brief span of five years. With the state government signing MoU for setting up auto majors’ expansion plans, Oragadam has been driving the attention of both ancillary industries and real estate developers to change the skyline of the city.

The city appropriately called as the Detroit of South Asia has six global car manufacturing companies. A few years ago the entire country produced less than a million cars. Today, six car manufacturing plants in the corridor alone account for 1.28 million cars to make Chennai as one of the top 10 global car manufacturing centres.

A number of MoUs have recently been signed by the state government with the auto majors. Ashok Leyland-Nissan joint venture will invest Rs 4,150 crore to set up a commercial vehicle manufacturing plant in Tamil Nadu and most of the investment would be for the greenfield plant in Oragadam. Daimler India which has a plant in Oragadam will double its investment in the state to Rs 4,000 crore. Allotment of 50 acre of land has been made in Oragadam by the government to set up a two wheelers factory by Royal Enfield, a unit of Eicher Motors at an investment of Rs 350 crore creating 300 new jobs. The proposed new investments would create 3,000 new job opportunities and additional 20,000 indirect jobs.

An estimated 120,000 people are currently employee in the Oragadam-Irungattukotai-Sriperumbudur corridor. This is expected to go up to 200,000 as more and more ancillary companies become operational in the coming months.

There are not many housing projects to cater to the mid-segment and lower mid-segment in the area. Arun Excello has launched affordable housing project in Oragadam.

Whereas Hirco has undertaken development of over 369 acres in the area. More developers like Prince Foundations, Inno geo city, KGS, True Value Homes, ETA Properties, Vijayshanthi Builders, and Tata Housing are developing residential projects. The state highways en route to Padappai will witness a number of residential projects in the coming months. Land values are inching high due to surge in demand.

A number of state highways from GST road and Sriperumbudur are now leading to the Oragadam junction and with the expansion of roads, connectivity levels will further improve. However, retail and entertainment centres, schools and hospitals are the need of the hour to encourage more people to shift to suburbs.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/oragadam-gets-a-facelift