A journey from Madras to Chennai

For a city, transition is inevitable which goes along with the changes in its demographic status. Chennai has transformed into a modern city from what it was a few decades back, says K Ramanathan, who traces the city's journey from Madras to Chennai.

The southern metropolis has come a long way since the black and white era, registering all around development. Once a sleepy and conservative neighbourhood, the city is now full of life with liberal outlook coupled with vibrancy.  Chennai has become a city that ‘doesn't sleep’.

Chennai in 1960s

The development over the years has made visual changes on Chennai’s landscape. New settlements, roads, bridges, subways, high rises and business establishments have been added to cope with the rising demand. And one can’t deny the role real estate has played over the years in transforming Chennai into what it is today.

A look at Madras

Though the changes have made a paradigm shift to city landscape, it has brought in a host of inherent challenges as well. A few old-timers recalled that Chennai in those days was having less congested roads, quiet surroundings and blessed with fresh air and copious water, which gave the inhabitants a comfortable and quality life.

“In 60s and even earlier, though real estate was as vibrant as today’s in Chennai, only plot development was popular among realty developers. The Usman Road, which is now filled with jewellery, garment and other commercial establishments, was once occupied by real estate companies to sell plots - both within and outside city limits. The Corporation too encouraged residents to buy plots to construct individual homes. City Improvement Trust (CIT) was formed

Dr R Kumar

to develop plots. Today’s CIT Nagar and CIT Colony were the outcome of this Trust. Later, with the advent of Tamil Nadu Housing Board (1961), Ashok Nagar, Shastri Nagar, Indira Nagar, Besant Nagar, KK Nagar and Shenoy Nagar came into existence as plotted development. Anna Nagar was developed after the World Trade Fair in 1969 and Visvesvaraya tower (now know as Anna Nagar Tower), was built in the subsequent year. Later Tamil Nadu Housing Board developed residential plots, built apartments, roads, schools, commercial complexes, bus terminus and parks in Anna Nagar,” says Dr R Kumar, Managing Director, Navin Housing and Properties (P) Ltd, and one of the long-time residents of Chennai.

Loss and gain

Reminiscing about the replacement of several old landmarks due to the inevitable urbanisation, Dr Kumar, who is also the Chairman of Confederation of Real Estate Developers' Associations of India (CREDAI), Chennai, said, “We have lost very many buildings which were once the landmarks of the city to the rapid real estate and infrastructure developments. Popular yesteryears’ theatres like Saffire (1964 -1990), Gaiety (1914-2003), Wellington (1918 -2010),

Kamadhenu (1920- 2008), Nagesh, Chitra etc have been replaced with multi-storey shopping complex-cum-office structures. Hotels Oceanic, Aun, Dasaprakash and Ram Bhavan are no more now.  Breez and JW Marriott too are getting replaced with residential and commercial high-rises. But I feel that unless the buildings are architecturally important, we don’t need to worry about their non-existence anymore. Buildings, which are 30-40 years old, have to be redeveloped.”

Agreeing to Kumar, Sanjay Chugh, Head–Residential Services–Chennai, Jones Lang LaSalle (JLL) India, says, “Redevelopment has indeed changed Chennai’s landscape considerably. Egmore was the first to experience the trend in 1970s. Even today, several bungalows and independent houses are getting redeveloped to multi-storey and commercial complexes.  The trend has spread to other areas as well.”

But there are a few landmarks which withstood the time such as LIC building, which was once the tallest tower in Chennai, Fort St. George, Amir Mahal, SBI building, Chennai Central and Egmore Railway Stations, Bharat Insurance building, Chepauk Palace, Ripon building, Presidency College, Parrys Building, Theosophical Society, Madras High Court, General Post Office, Anna University, Higginbotham's, Victoria Public Hall, etc.

Madras vs Chennai

Comparing old Chennai with the modern metro city, old timers feel that in those days, the quality of life was better though they did not have technology at their disposal. The infrastructure set up available was enough to meet their civic and sociological needs.

N Nandakumar

“Though we didn’t have much motors on roads in 60s or 80s, the city landscape was filled with full of greenery and hence the air was fresh. We had sweet ground water. Though we didn’t have adequate transport connectivity, visiting far-off places was never a burden for residents. But today, even people have swanky cars, visiting a place just few kilometers away has become an arduous task. The city has grown exponentially, no doubt, but sans basic infrastructure. Hence the quality of life has gone substandard. We depend on obsolete infrastructure and sanitary system. Chennai still has open drainage at several places, which is appalling. We have acute water and power shortage. In short, the city is yet to become self-sustainable even decades after the Independence,” says N Nandakumar, President, CREDAI, Tamil Nadu.

Countering that the redevelopment of old buildings and construction of new high-rises have indeed helped to meet the city’s growing housing demand, Sanjay opines, “Such large development has narrowed the demand-supply gap. Old buildings must be redeveloped, which not only increases housing stocks, these buildings can be better planned incorporating modern facilities.” Agreeing that the increase in population density has put pressure on city infrastructure, he says, there is still room for the planners to improve the living condition of denizens.

He says, rapid transport systems like Chennai metro and mono rail would go a long way to connect far-off areas to the Central Business District (CBD). “As far as real estate in Chennai is concerned, one thing that has changed over the years is the home buyers’ conservative mind-set. Thanks to the improved connectivity, people, who once refused to think beyond Mylapore, Mambalam, T Nagar, Triplicane, Adayar, or Nungambakkam, are going beyond Ponnamallee, Kottivakkam, Kelambakkam Thiruvottiur or even Chengalpet. For instance, home buyers in those days used to give importance to location than other things like amenities and infrastructure. This has changed now. For buyers, distance is not a matter anymore.

“In those days, people even dare to think beyond Adyar River for habitation purpose. Plots on the   other side were sold for pea-nuts as no one would want to invest money there. But those who had invested in land there saw rapid development within few years. People are no more conservative as far as choosing the place for dwelling is concerned. Their outlook has changed. Even Tindivanam and Thiruvallur look nearer now,” says Kumar.

Advent of high-rises

LIC building on Anna Salai was the first skyscraper of Chennai, built in 1961. The building marked the transition from lime-and-brick construction to concrete columns. LIC remained the tallest for over 35 years before it was replaced by Hyatt Regency in Anna Salai and Arihant Majestic Towers in Koyambedu, in the mid-1990s.  TVH Ouranya Bay 1 is presently the tallest building in Chennai with 30 floors.

“People from nearby districts and states, who used to come to Chennai, never missed the opportunity to visit LIC in those days. So, when the fire broke out in July 1975 which destroyed a few levels of the building, the incident saddened everyone in the state and also made the city planners think about fool-proof fire safety methods for high-rises, says Muralidharan, a retired government teacher from Royapuram.

The CMDA building in Egmore was the second skyscraper in Chennai built in 1972. “Multi-storey buildings for residential purposes were not preferred due to non existence of demand and no private developer wanted to do a project on such a large scale. Also, buildings with sustainable features were not known to many. We built the first multi-storey ‘intelligent’ (green) building of South East Asia in Chennai at Egmore for Madras Metropolitan Development Authority (MMDA) now known as CMDA. With 12 floors, the building was made sustainability in mind. This was followed by several such buildings across the country,” says Dr Kumar, who was the Planner In-Charge of the building.

Future scenario

For Chennai, urbanization is now at its zenith, growing in all sides. Thanks to the industrialization which made the southern metropolis a major hub for automobile, IT and ITeS, Education, Engineering and allied industry and Manufacturing and Service sectors, housing needs have gone up manifold. The realty in city has no option but to grow vertically, providing homes in multi-storey and community environment. Homes are getting smaller to make affordable. “However, over the years development did not go hand-in-hand with the quality of life,” says Nandakumar, who is also the Managing Director of DevinarayanHousing and Property Developers.

The IT boom has brought in a lot of changes in terms of real estate development along OMR, ECR and GST Roads in 90s and early 2000. The rise in housing demand has produced realty hotspots along these corridors and new places were added frequently along west and north Chennai. But still, experts believe that the city planners need to do a lot of groundwork to make the city self-sustainable.

“We need to improve the basic infrastructure in Chennai to make it a developed city.  Bad roads, inadequate drainage and drinking water facility, faulty drains, frequent power outages, non-dependable public and private transport systems are some of the deterrents we need to address to make the city progressive,” Nandakumar adds.

“Chennai’s demographic picture is changing quite rapidly with multi-cultural and community living becoming the accepted norms for home seekers. The ambitious Chennai Metro Rail and Mono Rail projects will take Chennai to a new level of development in the coming years. The MRTS will bring far off places, which are now on the outskirts of the city, within the reach of Chennai’s CBD. We will see rapid reality development along the corridors of the metro and mono rail routes and this will increase the housing stocks,” adds Sanjay.

Celebrity speaks

S Ve Shekher, Actor and Playwright

“Growth without infrastructure is what I see Chennai from 60s to today. People don’t have space to park their vehicles. Roads which were once turning as ‘U’ bends have became ‘V’ bends now, thanks to encroachments. The classic example is Santhome to Thiruvanmiyur road. Subsequent governments did not bother to address this issue and the ultimate sufferers are the road users. Roads are the same today as it was a few decades back. Though we have more bridges, flyovers and subways, they failed to address the traffic congestion. Over the years, buildings have replaced the greenery and people have to fight for their basic needs.”

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.