Chennai on global realty map

Chennai has been identified as one of the 12 top global cities for future real estate investment, due to the presence of wide mix of industries and high number of ultra high net worth individuals (UHNWI), according to a report.

Compiled by Candy & Candy, Savills World Research and Deutsche Asset & Wealth Management, the report has also identified the city with ‘English-friendly’ work environment, presence of new-tech industries and financial centers, favourable conditions for international companies, and a large, young and well educated population.

The report, which found 12 cities around the world having strong residential property growth in the next few years, said, "Prices in these cities are much lower than many other developed cities, which make them attractive to yield-seeking realty investors."

The list ranges from well established cities such as Melbourne and Hong Kong to cities in developing countries such as Jakarta and Chennai, that have a high number of UHNWIs.

"Chennai offers an English-speaking work zone. Also, the city is home to traditional hub driving inbound banking financial services and insurance (BFSI) businesses, which makes it stand apart from Hyderabad and Bangalore. Chennai also has high quality healthcare and education systems, a vital ingredient for growth," said Udai Shankar, a property consultant.

Yolande Barnes, Director, Savills World Research, who conducted the analysis said: "As prime real estate in many premier cities has become more fully valued, emboldened investors are now spreading their wings and looking for high yielding secondary properties in those cities and (properties) in second-tier cities in countries with strengthening economies."

“For many ultra-high-net-worth-individuals real estate has become a unique asset class, but investment to date has focused on prime property in the top tier world cities which have shown record market growth,” said Nick Candy, CEO of Candy & Candy. “Real estate will continue to play an important part in global investment with investors now looking beyond established safe havens and prime world cities,” he added.

For example, a two-bedroom apartment in prime selling areas in Chennai is priced at Rs 96 lakh and in secondary ones they sell at nearly Rs 24 lakh. "This adventurous approach will not only provide higher income returns but also an opportunity for significant capital growth. Real estate values will grow as new cities all over the globe rise on fortune's wheel. Property rents and values will rise in line with new and growing economic strength," the report further said.

“Compared other frontline cities, Chennai is growing at a faster rate despite gloomy economic condition. It is an end user driven market having good mix of trades. Chennai is also known for top-notch medical facilities, education and automobile industry, besides well established IT and IteS sector offering high employment opportunities. Because of all these, demand for homes is fairly high here. The capacity to observe LIG to high-end homes makes the city a sought-after destination for realty investors and end users,” says Partha Srinivasan, CEO of Partha Homes and Developers.

The report also noted the property purchasing habits of UHNWIs. Three markets – Germany, Japan and the United States – top the list as the global locations with the highest value of direct real estate investment by UHNWIs. Together they account for 39 per cent of all UHNWI global real estate holdings.