Realty unplugged: Welcome to greater Chennai

The advent of important corridors of Chennai -- Old Mahabalipuram Road (OMR), East Coast Road (ECR) and Grand Southern Trunk (GST) Road -- has provided a gamut of opportunities to home seekers in selecting properties under different types and budgets, writes K Ramanathan.

With almost 80 per cent of residential and commercial developmental activities being centered around these southern corridors, OMR and its surrounding areas, take the lion’s share offering wide range of residential properties - from affordable, luxury, villas to single floor residential apartments and commercial floor spaces.

However, poor planning towards future development along the corridor is casting a shadow on the prospect of OMR becoming a satellite town, says Dr R Kumar, Managing Director of Navin Housing, a leading developer in Chennai.

“Real estate activity is happening at a break-neck speed along OMR. Several housing and commercial establishments have already been established on both sides of the road. But it is only a ‘ribbon development’. Interior areas on both sides are still undeveloped with acres of land being lying vacant. As there is no proper connectivity to the OMR, government should take measures to lay interior roads for a planned development,” said Dr Kumar, who is also Chairman of Confederation of Real Estate Developers’ Association of India (CREDAI), Tamil Nadu chapter.

Area specific growth

Real estate activity in Chennai has always been area-specific. In 1998, it was Velacherry. The 2006 boom brought in OMR to limelight and later ECR, which is still continuing. Next, it will be GST Road or Sriperumbudur, according to realty experts.

Being an IT hub of the southern metropolis, local and global companies along OMR have created thousands of employment opportunities here, which in turn has triggered residential and commercial activities. Though there has been a slump in IT/ITeS services across India for the last two years, absorption has been satisfactory so far on this stretch as residential demand remains at par with the available or created stock.

Tamil Nadu Housing Board (TNHB) has created a township at Sholinganallur with IT Parks, arterial roads, schools, play grounds and bus service. The township has 4000 dwellings and situated next to the upcoming 200 acres Rs 1000 crore National Maritime university complex. To add to the development of OMR and its periphery, the government has recently sanctioned Rs 500 crore for the proposed 55-km-long elevated corridor from Taramani to Mamallapuram on OMR.

The unprecedented development here has transformed the once sleepy towns/villages along OMR such as Tharamani, Thoraipakkam, Siruseri, Sholinganallur, Perumbakkam, Thaiyur etc. into vibrant realty hotspots today, with state-of-the-art facilities and amenities making it a mini city in itself. Starting from Madhya Kailash on Rajiv Gandhi Salai, the realty development on OMR has spread beyond Thaiyur.

However, Dr Kumar feels that to make the reality growth along OMR sustainable, developmental activities should be systematic and uniform. “We have seen a good traffic on this stretch already. The government should extend the MRTS services beyond Siruseri, improve infrastructure and also broaden the stretch to avoid traffic congestion,” says Dr Kumar.

According to an estimate, there are about 70,000 people employed in the IT and BPO companies along this corridor and about one lakh more people will get employment in the IT belt in the next one to two years.

Property prices have gone up by 50 per cent in the whole belt in the last two years, and an unbelievably 80-100 times since a decade. “In 1999, the cost of a plot measuring 2400 sq ft in Thoraipakkam was about Rs 150000 which is now selling at Rs 40-50 lakhs depending upon the location,” says Durairajan, a real estate consultant and building contractor in Taramani.

Some of the leading builders who have built or are making homes here, are Akshaya Homes, Hiranandani, Mantri Developers, XS Real, Puravankara Projects, L&T Constructions, DLF Group, Appaswamy Builders, Olympia Group, Radiance Realtors, Vijay Shanthi Builders, Aayush Builders, Naveen Construction, Millennium Foundations, Suryavardhan Estates Private Limited, Jain Housing & Constructions, RAMS Builders, Singapore-based Ascendas, Bangalore-based RMZ, Arihant, Doshi & Doshi, Rajyog, Prince foundations Ltd and many more.

Almost every residential development has been offered with health clubs, sports facilities, supermarkets and other logistic supports so that the residents don't need to travel to the city. Construction of a state-of-the art shopping mall with a hotel and cinema is also in progress at many projects.

Welcome to greater Chennai

So, what has kept this 35-km long stretch from Adyar to Siruseri and beyond selling at fast pace, despite economic slowdown?

“OMR is strategically placed between ECR and GST and so, areas in between these roads are also developing. More so, many parts of OMR are well connected to Central Business

Districts of Chennai,” says Sathish Kumar, Managing Director of Anandam Foundation, a city based developer.

Having four projects at various places along OMR, he says, “With several IT giants setting up homes within the SIPCOT IT Park, it is only natural that people working there would want to move in nearby. Builders see this as perfect opportunity to set up large-scale projects like integrated townships and gated communities. To their advantage, large land parcels are still available for building such projects on OMR.”

DABC has an integrated township Acacia, which provides residents with a number of amenities like medical facility, eateries, club, bank and ATMs. The builder is also providing an international style mall and amphitheatre, to meet the entertainment needs of residents.

Not to lag behind, L&T is planning to being in the third branch of Padma Seshadhri Bala Bhavan Senior Secondary School, a leading CBSE chain of schools, to its new project ‘Eden Park.’ The project also has supermarket, polyclinic and swimming pool among other facilities.

Residential properties on OMR were part of luxury bracket, with square foot was selling as high as Rs  4000 and above. But today, after surviving global meltdown, the real estate here now toes the more affordable line.

Builders on the stretch have pegged their rates between Rs 2500 and Rs 4000, in response to the change in buyers' sentiments. “Today, people are looking for affordable homes here and want to settle down,” says Sathish.

Affordable housing

Of 7,000 housing units developed in Chennai Metropolitan Area (CMA) annually, more than 95 per cent were made in the suburbs and fifty per cent of them belong to low-income group.

 

Still, the city is facing a shortfall of more than one lakh houses. Going by the present pace of development, this shortfall could be increased to eight lakh units in the next 15 years.

Homebuyers belonging to lower income group feel that there isn't enough supply of affordable houses as builders are finding affordable housing a nonviable option to make profit. However, whenever a builder promotes a budget housing project, it gets sold out fast. Akshaya MD T Chitty Babu has said that he had to sit in his office till late night to accept bookings when he launched a budget housing project on OMR last year. Plaza group, which launched a 176-apartment project at Perumbakkam, off OMR, early this year, sold out the entire stock in just five hours.

Projects at a glance on OMR:

Projects	Place	Category	No of Apts	Size
Sobha Meritta	Kelambakkam	Luxury	556	537 to 2179 sq ft
Vishwakarma-In town	Kelambakkam	Mid-segment	352	950 - 1250 Sq. Ft.
Bollineni Hillside	On OMR	Integrated township	4500	708 - 2346 Sq. Ft
Marg Savithanjali	Kalavakkam	Luxury	702	1157 sq.ft to 1636 sq.ft.
Alta Vida	Thaiyur	Mid-segment	397	570 - 1275 Sqft
Pacifica Aurum	Kelambakkam	Apts and Villas	1714	1149 - 4251 sq.ft.
Elegants Pinnacle	Semmenchery	Mid-segment	178	533 - 1661 sq ft
Akshaya Today Akshya January	Kelambakkam Kelambakkam	Mid-segment Mid-segment	3790 688	630 sq ft - 1360 sq ft 610 sq ft - 1412 sq ft
Marg Pushpadruma	Kalavakkam	Mid-segment	466	847 sq ft to 1140 sq ft

On commercial side

Housing development has triggered unprecedented growth in commercial realty too on OMR. According to Badal Yagnik, Managing Director – Chennai and Coimbatore, Jones Lang LaSalle India, “OMR is fast turning into an epicenter of commercial property development. Over the years the area has turned into a new mother lode of opportunity, thanks to excellent ‘Grade A’ office space availability for a spectrum of multinational tenants, he says.

As per a Cushman and Wakefield’s analysis, in the second quarter of 2013 approximately 2.4 msf of new office space came into supply in OMR, which is more than six times compared to previous quarter.

Key IT Parks along OMR are Ascendas IT Park, SP Infocity, Prince Infocity, RMZ Millenia, Tidel Park etc. This corridor also hosts IT SEZs such as Chennai One BPO Park and Ramanujan IT City along with ELCOT SEZ and Siruseri SIPCOT.

The excellent connectivity and transportation network have augmented OMR’s status as an important IT / ITES hub. In fact, the commercial real estate projects along OMR attract not only domestic players, but also foreign investors.

“In the current fiscal, we expect the highest demand for office spaces to continue focusing on the pre-toll micro-market of OMR. Two reasons that attract the occupiers are locational advantage and competitive rentals,” he further added.