South Chennai leads the way
While almost all of Chennai saw a dip in the number of new launches in H1 2015 (Jan – Jun), South Chennai stood tall and led from the front with a 3x increase in the number of new units launched between H2 2014 and H1 2015.
Source: Knight Frank Research
Of the ~5800 units launched during H1 2015, South Chennai locations such as Pallavaram, Perumbakkam and Kelambakkam saw most of the development interest. In the premium segment – Injambakkam, Uthandi, Palavakkam and Thiruvanmiyur led the way.
The table below gives the pricing range for key localities in South Chennai and the appreciation in the last 12 months.
Source: Knight Frank Research
What is driving the growth in South Chennai launches?
Here is what the experts in real estate have to say about why South Chennai is leading from the front in Chennai realty market
- Shankar, National director, JLL:
“Locations such as Kelambakkam and Siruseri have mainly developed due to the presence of the SIPCOT IT Park. 30-40 per cent of buyers in these areas belong to the IT sector, followed by NRIs (25 per cent). Majority of the buyers fall under the middle and upper-middle group, with a monthly income between Rs. 50,000 and Rs. 1,00,000.”
- Kavitha Krishnan Director-Chennai, Knight Frank india:
“Southern localities such as Adyar, Velachery, ECR, Sholinganallur, Perumbakkam and Medavakkam, have always been sought after for residential and commercial realty, and thus the increase is validated. Their proximity to the IT corridor, and the availability of good physical and social infrastructure and civic amenities is what makes these areas popular. Interestingly, prices in these locations are competitive compared to other pockets, and properties in these areas are expected to appreciate well in the future.”
- Suresh Jain, Managing Director, Vijay Shanthi Builders:
“Properties in these areas are comparatively cheap and stand good for long-term investment plans. The ongoing construction of Phase II of the Outer Ring Road, linking the suburbs, and the proposed peripheral ring road project, are expected to improve the demand and capital values of the projects located in far-away suburbs”
- R Kumar, Managing Director, Navin’s Housing and Properties:
“Chennai’s development has always been along the transportation corridors. This type of development is called ‘ribbon’ development. All the major arteries in the southern parts — ECR, OMR, GST Road, Arcot Road, Mount-Poonamalle Road, Pallavaram-Thoraipakkam Road, and the interlaying areas between these roads, they are all seeing varying degrees of development.”
To summarize a mix of employment growth in Souther corridor coupled with a spurt in infrastructure development (ECR, OMR, 4 lane stretch between Akkarai-Mamallapuram, Phase 2 of outer ring road, Peripheral ring road) is leading the growth in South Chennai launches. Most projects launched in these areas are integrated residential projects with good amenities. Further many of these projects are sold after construction or close to finishing stage thereby increasing confidence of buyers/ investors alike in South Chennai.
This is an excerpt/adaptation from the original article titled “South Chennai leads the way” written by Nidhi Adlakha. The original article appeared in The Hindu – Property Plus supplement on 21st August 2015.
