CHENNAI: As Chennai eagerly awaits the advent of the city’s Metro rail services, the real estate industry too, watches with bated breath. As the rapid transit services roll out in phase after phase in city after city, both transport corridors and real estate have had a love-hate relationship with each other.
During the construction phase there is a dip in rental values as the noise and diversions of the localities adjoining the segment makes the experience less than the best for consumers.
As the projects near completion, the impending ease of use pushes users to start considering these areas and there is a bump-up in the rental values. After services roll in, there is up to 25 per cent rise in residential rental values along the immediate corridor, with a cascading effect depending on distance from the metro corridor.
Chennai is expected to be no different and there are clear indications of the excitement that surrounds the city’s real estate market. We have picked up localities that seem to be on the radar of the city’s realtors and developers.
A corollary that any city expects before the metro actually starts functioning is the ease of congestion. However, experience has proved that while the ease of movement between the locality and commercial or business hubs are important, congestion does not significantly reduce.
The second biggest driver in Chennai city has been the hubs of economic activity. IT driven localities seem to be the major beneficiaries. We have traditionally been focusing on localities that have been evincing huge interest from the
This week we focus on Perungudi, which is a poorer and newer cousin of in-demand localities such as Velachery and Thiruvanmayur but offers options that are roughly half the cost. Therefore, since the distance is not very great from the commercial hubs it has been attracting the interest of professionals working here.
Since the IT and the manufacturing hubs draw professionals from across the country, these users do not have established biases in favour of or against any locality. As a result, the entire choice is based on distance from the most frequently visited commercial hub as well as the social infrastructure such as schools, hospitals, entertainment and retail facilities that can be accessed from here.
However, as is usual in the Indian context, new hubs are built around what the developer thinks will sell rather than what the consumer is demanding. IT professionals have a track record across the country of demanding secure, gated communities with high-rise apartments of international proportions being in vogue. However, developers have stuck to the Chennai mode of low-rise apartments in the single floor format on small plots.
Given the interest in high-rise apartments in such localities, it is only a matter of time before some of the national or large real estate players catch on to the trend and come up with formats that are in demand.
Is the slow economy a concern in the city? Given the current trend across the country, real estate is not booming in Chennai either. Having said which, the strong fundamentals of the Chennai market are keeping the market afloat. According to the MagicBricks.com PropIndex, Chennai has a robust addition of stock. Transport connectivity remains the key. Those localities that are easily accessible by road, rail or now metro emerge the winners.