After floods its business as usual for Chennai real estate

The recent unprecedented floods in Chennai has indeed put a spanner in the works of the real estate firms in the booming southern metropolis and its fledgling outskirts, albeit briefly.

After almost two weeks of hibernation and bright sun shine for almost ten days now, it is business as usual for real estate firms which are using innovative means to lure people to sell their projects.  While some draw people’s attention by claiming that the areas where their residential projects are coming up are safe as they have not been affected by floods, others are making indirect attempts to sell their projects in worst affected areas in and around Chennai by becoming good Samaritans.

The floods have virtually stopped all construction activities in the southern city and its outskirts. The real estate sector, which is already reeling under stagnation and negative growth for the last few years due to sagging economic growth, will find it hard to withstand the effects of the recent floods.

Several residential projects in Chennai’s most sough-after fringe areas on OMR, ECR and GST Roads and other prominent locations such as Maraimalainagar, Perungalathur, Thoraipakkam, Porur, Poonamalle,  Ambattur and Avadi were remained unsold and the floods have made the situation even worse. People may go choosy in selecting the areas now and most of the ground floor apartments will likely to find ‘no’ takers, feel real estate experts.

Under pressure, the developers and builders are worried to sell their homes. Take for example, the areas in west Tambaram and Mudichchur, which have several independent homes and villas bore the maximum brunt, with almost all of them went under water sinking the silt and ground floors inundating several cars and destroying properties worth crores of rupees.

Before the floods, these areas were one of the hottest destinations for home seekers in Chennai and real estate firms were making no mistakes in tapping the opportunities.  But now, there is not even a single real estate advertisement appearing on national dailies giving details about housing projects in Tambaram, Mudichchur, Nandambakkam or Velacherry. 

All these areas were the worst affected as several lives were lost here and several well-to-do-families virtually came on roads after losing their belongings due to the burgeoning Adayar River on the fateful night on December 1 when officials suddenly opened the flood gates of Chembarambakkam reservoir near Chennai.

After more than ten days now, some areas in KK Nagar, Valasaravakkam, Madippakkam are still under knee-deep water.  But sun slowly has started shining again on real estate firms in Chennai.

One can see a lot of real estate ads making their way in local and national dailies luring people with discounts and goodies to sell flats and plots, and in another month or so, people may even go for sight visits in areas of west Tambaram, Madipakkam, Keelkattalai or Mudichchur to purchase properties forgetting the fact that these areas were once the water bodies and now busy residential areas, thanks to the “efforts” taken by real estate sharks and corrupt officials.

With the state government, private organizations and enthusiastic individuals taking efforts to help the affected people, real estate firms in Chennai are now busy as usual, trying to reach out to their customers by all available means to sell their projects taking advantage of Chennaiites eternal affinity of owing homes.

K Ramanathan

Also published in Merinews.com.

Make way for PG homes

Builders in Chennai have found a new market for their product, particularly for single bedroom tenements. 

Thanks to the burgeoning floating population of professionals belonging to IT and ITeS, automobile, education and engineering sectors from various states and within Tamil Nadu, the city has been witnessing huge demand for PG accommodation and 1 BHK flats on rent. The rental too has hit the roof due to the high demand.

Since the city is also home to several colleges, both within the central business district and on the outskirts, students from outside Chennai generally look for safer places to stay, where their food and other basic needs are taken care of much to the relief of their parents. And, builders and house owners are taking advantage of this unprecedented rush for smaller homes.

“Students and professionals from other states prefer Paying Guest (PG) accommodation.  These units are well furnished with basic facilities. They too provide homemade food for tenants. Most of them have facilities such as Wi-Fi connectivity, LCD television with DTH connection, refrigerator, magazines, furniture, etc. Each room is being provided with a single bed, study table, wardrobe and dressing table,” says Niharika Kapoor, an IT professional working in Taramani, who stays at Velachery.

The hubs for PG accommodation in Chennai are Mambalam, Nungambakkam, Velachery, Kodambakkam, Tambaram and Mylapore. Some of the places where IT professional look for homes are Thiruvanmiyur, Thorapakkam, Sholinganalur, OMR, Karaipakkam, Medavakkam, Porur and Iyyappanthangal.

The rates too vary as per the facility available. For non A/C accommodation with hosts of other facilities homeowners are charging anywhere between Rs 6000 to RS 10,000 per month and for non A/C rooms without sharing, one has to shell out between Rs 3500 to Rs 5.500, says Gopal Menon, a student, who stays in Tambaram West.

Majority of the demand for PG accommodation is in locations, which are closer to the IT corridors of the city. However, maximum supply is concentrated in Thorapakkam, Thiruvanmiyur and Sholinganalur, which is close to IT corridor, since it has cheaper transportation towards work places.

“People, who may be professional or student come to the city from other states. They look for safer place to stay for few months. Hence, they prefer PG accommodation rather than renting small-sized apartments, where they have to pay huge security deposit,” says  Sridharan, who let out PG rooms exclusively for girls in Velachery.

The unprecedented demand for PG accommodation or independent single bedroom apartments has forced many denizens to convert their homes into PG accommodation for better earning. ‘We have a few projects for joint development for PG accommodation- cum-single-bedroom apartments from owners in Tambaram, Thoraipakkam and Porur. We have making one in Iyyappanthagal, where the demand is more since it is closer to DLF IT Park and Sri Ramachandra Hospital, says Somesh Verma, Senior Marketing Manager of Om Ganesh Construction.

Needles to say, the real estate prices are going up in certain pockets of the city where it has huge demand for such accommodation. In places like West Tambaram, Kattupakkam, Ramapuram, Kundrathur and Chrompet, the demand is more for single room tenements being sought by college students, nurses and IT professionals.

Akshaya launches new project in Thoraipakkam

 Chennai: Akshaya, the real estate developer, has recently announced the launch

of its latest project ‘Tango’ at Thoraipakkam, OMR. The project is spread across 3.87 acres of land that houses 250 apartments and many more world class amenities, the company said in a statement.

The homes will be built with modern contemporary style of architecture having innovative Tango-themed landscape. The apartments will be 2, 3 and 4 BHK that range from 676 Sq ft to 2355 Sq ft in four blocks with 13 floors each, apart from a 10-floor tower housing retail, commercial and recreational spaces.

Tango connects with Madhya Kailash, Adayar, Tidel Park, and Thiruvanmiyur, the thriving IT hubs of Chennai and is said to be having an easy accessibility to educational institutions, hospitals, hotels and recreational centres.

T Chitty Babu, chairman and CEO, Akshaya Pvt Ltd said, this project would be one of the fine residential projects in Chennai to provide all the amenities within the city limits. The project is elder-friendly and disabled-friendly with specially designed ramps, grab bars in common areas. There would be no sharp corners in the construction and floors will be anti-skid, he reminded. This is said to Akshaya’s 155th project.

Hayat Invest gets into realty business in India, launches homes near Chennai

Chennai: Kuwait-based investment company Hayat Investment as part of foraying into the domestic real estate business has announced its commencement of first residential project near Chennai with its Indian partner XS Real Group.

"Hayat Invest would pledge about USD 100 million in next couple of years. For the first two projects it will invest about USD 25 million," XS Real Group Chairman S G Prabhakaran told reporters here.

"The money came in around October 2013 at the time when uncertainity prevailed in the (real estate) industry," he said.

The two companies, in which Hayat Invest holds the majority stake, have jointly launched a special purpose vehicle -- Jacaranda Properties -- to manage the real estate entity.

The first project to come up on a 14-acre land at Siruseri near the SIPCOT Industrial Park would have about 1,500 apartments.

"The first phase is expected to be rolled out by June 2014," he said, adding the apartments would be positioned under the mid-segment category in which prices would range from Rs 20 lakh to Rs 50 lakh.

"For the second project we are still looking at land. It will also be a residential project," he informed.

The reason for setting up the maiden project on the Old Mahabalipuram Road, was the logic behind XS Real Group, which has already undertaken a similar project belonging to Government of Singapore Investment Corporation, Prabhakaran said.

Hayat Investment Company, Founder-Chairman, Nabeel Al Mannae said the two companies were in discussion for a year and last October the financial transaction was made.

"It is just a start from our side. We have the common understanding (through this partnership). We are eager to look forward for more projects in future...," he added.

The two companies are eyeing to clock revenues of USD 120 million through the real estate business, a company statement said.

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.

IT/ITeS and SME sectors to drive Chennai office market in 2014

The Chennai office market has managed to beat the absorption level achieved during the post-recession recovery period of 2010 by 13% with a fair amount of transaction activity in 2013, although it fell behind the peak level of 2011 by 22%, according to a Knight Frank analysis.
 

The resurgence in office space demand from the IT/ITeS sector bodes well for the city's office market, it said, adding, 'While the past few years saw developers of all grades joining the fray in developing office space to attract IT/ITeS occupiers, the stringent economic conditions have dampened the enthusiasm bringing in a sense of realism into the market.'
 

IT/ITeS companies, although recruiting, are behaving prudently and taking up genuine numbers for employment. Along with occupiers, the developers have also become cautious and are presently adopting a conservative approach to their project completion timelines.
 

The year 2014 has been ear-marked as a very important period, owing to the impending formation of a new central government at the helm. Sentiments are expected to improve, but they need to sustain for some time in order to bring in the required confidence in the market.

While IT/ITeS sector will continue to drive demand, the Small and Medium Enterprises (SME) sectors with requirements of smaller office spaces will show increased activity, providing an opportunity to the developers to tap this demand. The manufacturing industry is expected to gain momentum in 2014.

Going forward, office projects in OMR post toll and GST Road will evince interest from occupiers having large floor plate requirements at lower rentals. Pre-toll OMR do not have much supply planned, barring SP Infocity in Perungudi. The IT/ITeS sector will be the driving force for office space demand.
Guindy is poised to emerge as an alternative to CBD and off-CBD locations, catering to the demand of the non-IT/ITeS sector with a smaller office size mandate.

The upcoming Metro Rail would be an added advantage to this office micromarket. Meanwhile, considerable supply is in the pipeline along the post-toll OMR which will be released into the market in phases over long intervals. Among the upcoming areas of growth, Porur holds much potential, although it depends on the developers whether they would be willing to live with the fact that residential development would fetch a better price.
 

On the other hand, the CBD will continue to remain an important market in terms of value with non-IT/ITeS sectors contributing to office space demand here. On the rental front, values are expected to remain stable in most micro-markets, although marginal appreciation is envisaged in projects
witnessing occupier interest.

Villa Boutique – Individual Bungalows in OMR

Villa Boutique

Chennai: XS real properties has unveiled 23 individual bungalows in OMR offering lifestyle alternative amidst sylvan surroundings.

The company said that a rapidly developing metropolis has its own share of demands when it comes to residences and these demands are best answered in their latest project ‘Villa Boutique’ at Kazhipattur.

“We have ensured the creation of such homes in the form of independent villas that promise privacy, luxury and identity. All the 23 bungalows are exclusive and refreshingly different offering lifestyle alternative amidst sylvan surroundings, the company said in its website.

The villas in OMR provide a refreshing alternative to the packed apartments in the city that makes for the jaded urban landscape.

Villa Boutique has been designed to receive plenty of natural light and cross ventilation,  besides each of the villas also comes with two car parking spaces.

Location features

Villa Boutique

Close to Siruseri in Kazhipattur – Just 22 Km from Madhya Kailash,  the project is coming up on the IT corridor which starts from Madhya Kailash and extends up to Thiruporur.

The Government of Tamil Nadu has established Special Economic zone in Siruseri (SIPCOT – a 1000 acre IT SEZ) which boasts of big corporate giants like TCS, CTS, Patni Systems, Syntel and many more.

Exclusive amenity area with a Terrace Swimming pool, indoor games and fitness centre are some of the features awaiting for the residents.

Now Akshaya launches Today Plus on OMR

Chennai: Leading home developer Akshaya Pvt Ltd today announced launching of their next level of premium homes ‘Today Plus’ on OMR. The company announced their next project on the eve of the Bhoomi Pooja of its 151^st project ‘Today’ scheduled on Friday.

The People’s Mini-City on OMR adds a lot of pluses with a well defined assortment of two and three bedroom apartments that offer a picturesque choice of views like sea-facing view homes, banyan courtyard facing abodes, clubhouse & pool facing dwellings and habitats facing lush greenery. Spread over 20.70acres, Today ‘Plus’ is a CRISIL 5-star rated and Green Home Rated project, the company said in a release. 

Today Plus will be nestled alongside the beautiful ‘Right Sized Homes’ which created a record sale of over 1000 units in the 3-day launch marathon recently. ‘Today Plus’ will offer a choice of plus sized homes in a mix of 2 bhk size between 986 - 1061 sft & 3 bhk size between 1246 -1335 sft with access to all the modern and luxurious amenities in the mini-city. 

Speaking on the new project launch,  T Chitty Babu, CCEO of Akshaya said, “While ‘Today’s success has been iconic, with ‘Today Plus’ we hope to offer irresistible pluses in one of the most sought after property location in Chennai, it is also a way thanking our customers who helped create a record breaking sales when ‘Today’ was launched in November’12. It is our way of sharing our Plus sized happiness with our customers, patrons and well-wishers.” 

The offer price for the 3-day drive-in booking marathon opens at Rs.3250 per sqft with a booking advance of Rs 2 lakh, free chauffer driven site tour comes as part of this plus sized realty opportunity. 

Commenting on the Bhoomi Pooja celebration on January 18, Srikanth Koorapati, Vice-President - Sales & Marketing  of Akshaya further added, “Our Bhoomi Pooja is going to be a one-of-its-kind gala celebration with over 3000 plus customer participating in it. The pooja area is spread over 15000 sft space with a spacious 26000 sft area set for dining arrangements at the Today site. To make this celebration a milestone, we are also attempting to get into the Limca Book of Records for the 'Largest Bhoomi Pooja Celebration of a Residential Project in India.”