Chennai Real Estate

Chennai Property

Chennai Property prices have been on a high throughout the last few years and after the global economic depression and the general financial crunch, prices appear to stabilize and hold for now. Commercial rentals especially in the OMR have plummeted to some extent. Just a few months earlier, Chennai property prices saw an increase of about 8 - 15 % in the last few years.

Cost of construction in Chennai or for that matter anywhere in India has seen a massive increase in the last few years. High Steel and timber prices along with rising labor costs resulted in extra ordinary building costs - almost as high as Rs.4000 per square feet for some gated communities type of residences. After the economic meltdown, steel prices appear to come down. But as of now - situation is still nebulous. Many real estate developers have to tide over the financial crunch and as a result, some even offer affordable flats at less than Rs.2000 per sq.ft. With many companies giving pink slips, and the world wide economic slump will have a cascading effect on real estate prices too.

Investment on the real estate has been on the rise especially with the volatile Sensex situation at the moment. With the talk of satellite townships coming in the outskirts of the city, the avenue for investment in real estate has never been this good.

Eden Park is a new project from L&T South City projects. As is common with this group, they develop an integrated township under the name of Eden Park with an investment of over Rs.12 billion. The location of this massive project (around 100 acres) is near Siruseri on the OMR (old Mahabalipuram Road). The promoters have announced a new concept - villapartment - in which they combine the luxury and privacy of an independent villa with the convenience, maintenance and security of an apartment. The project started on 18th January 2008 will be completed in several phases.

Project Estancia is a new Integrated Township Project from Larson and Toubro (L&T) Urban Infrastructure Ltd in association with Arun Excello of Chennai. This project is an ambitious one considering the scale - 78 acres and an estimated cost outlay of around Rs.1800/ crore. Estancia - literally refers to a Latin American Ranch in Spanish language, will eventually house 2000 apartments, an IT Park, hotel, shopping mall and even a school. Vidya Mandir of Chennai has offered to open its school here. Being a CBS education system, this school will match the kind of people eventually taking residence here. L&T, noted for its civil engineering expertise will provide the construction and project implementation for this Estancia venture.

The ITES and BPO industries are a primary reason for this boom in the real estate market of Chennai. Not only has it increased the capital and rental values of commercial property, it has fuelled a demand for housing for its workforce. The IT corridor along Old Mahabalipuram Road is seeing a facelift. A six-lane highway stretching 20 kms is home to many MNCs who are setting up operations here. This has pushed property prices in this area of Chennai sky high. Typical prices in Sholinganallur are in excess of Rs 2.5 crores an acre.

The Tamil Nadu Government has also announced the setting up a marine biotechnology centre near Mahabalipuram. But OMR is still facing problems of supporting infrastructure; such as adequate transport facilities. But this issue will change once the Siruseri IT Expressway is completed. The bottleneck of traffic from Madya Kailash on the way to Taramani via Tidal Park is likely to reduce after this section is finally completed.

Property prices have already skyrocketed in the ECR (East Coast Road) almost upto a few kilometers short of Pondicherry. This tips the scale in favor or older industrial estates. Land prices in the industrial areas of Guindy and Ambattur are also seeing climbing rates. A ground costs anywhere between Rs. 40 - 50 lakhs in Guindy. The relaxation in FDI rules are estimated to propel the property market and see the growth of mega townships.

Residential property prices in Chennai have also seen an upswing due to increased demand for premium housing apartments as well as budget flats. The property market in Chennai has been buoyant since 2004 Consequently rental prices have also shown an upswing. Certain suburbs are seeing increased real estate development activity.

Builders have entered into joint ventures to promote housing apartments. The apartment sales have increased in volume. The city's horizon has been changing with many an independent house giving way to apartment buildings. The second-hand market for flats is also catching up. With housing loans being offered at attractive rates, people are looking at real estate in Chennai as investment opportunities too. The tsunami of 2004 has not dampened the sales of properties in the coastal areas of the city anyway.