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Chennai- Peaking Demand for Residential Apartments

Delhi East - Friday, March 30, 2012 9:44:04 PM


Central and South Chennai are the most active real estate markets in the city because of Information Technology and manufacturing have become the two main drivers of property markets across Chennai. Large- scale developments are taking place in both these areas. The areas most in demand are along IT and manufacturing corridors leading to the commercial hubs. As a result, the Old Mahabalipuram Road, Velachery Road, Sriperambadur, Porur and Medavakam are all in the list of top 10 localities by demand and supply.

Urupakkam, another key developing area, is the entry point to South Chennai. It has started witnessing development in last two years. Majority of the projects are under construction. Builders are mostly small scale and are offering projects in this area within the range of ` 2,500 to `2,800 per sq ft. There are also malls in the planning stage in the area.

The Velachery IT corridor is driving the residential rental values. The new lot of buyers is largely young professionals who have been flocking to the city’s IT and manufacturing hubs. Since they are new to the city, they have no defined notions of traditional hubs. As a result, the residential units near commercial hubs are being occupied by young IT professionals. This is reflected in the steady rise in values across the IT corridors.

According to industry sources, OMR and GST road together have 6 non- captive IT/ITES SEZs with 83per cent occupancy levels. And GST road has 5.1 million sq ft of operational captive space including Shriram Gateway and L&T Estancia.

So what does this spell for property development in Chennai in 2012?

IT and manufacturing will continue to drive property development across the city. The residential segment is likely to spur retail development as young professionals are expected to seek property that matches their lifestyle requirements.
 
Infrastructure and transport connectivity are going to be key issues in the city. This is reflected in rental value trends which have shown stagnation along the OMR despite good lifestyle developments along the corridor. However, the offsite experience does not match the onsite luxury and lifestyle and this mismatch is detracting from the rental trends.

Even as demand for apartment living is peaking among the young professionals, there is a revival of interest in plotted living in the city areas and also some suburbs. Plotted sales in suburban areas have now begun along the East Coast Road and are expected to grow.

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