Major Infrastructure Growth

Infrastructure growth plays a vital role in the growth of property values. Such development projects even at the announcement level leads to speculative growth of 15-25 per cent in the capital values. In Chennai, the upcoming infrastructure is expected to do the same. Let’s take a look at the existing strength of the various zones in Chennai:

Main residential areas in North Chennai are the Chennai Port and Ennore Port, Tondiarpet, Madhavaram and Perambur. The demand for real estate in North Chennai is predominantly driven by the business community and public sector employees residing in the region. The development of port infrastructure at Ennore and improved road connectivity to North Chennai is expected to drive employment opportunities and provide the necessary push for growth of real estate in this belt. In the long run, the automobile industry and locomotive workshops dotting Perambur and the surrounding regions will help drive demand for residential real estate in North Chennai. Perumbur is witnessing the development of an integrated township project. Property prices in this region are in the price-band of INR 5,130 psf-INR 7,016 psf depending on the builder, location and specifications. This micro market is expected to remain stable due to inherent demand from local end users irrespective of current price levels.

The Central Business District areas of Boat Club, Mandevali, R.A. Puram, Nungambakkam, T. Nagar and Alwarpet houses smaller projects in the premium segment, catering to High Net Worth (HNW) individuals. The demand for individual bungalows, plots and re-sale of properties remain robust. This area attracts some of the highest property prices in the city. High-rises have also cropped up recently in areas like Anna Nagar and Alwarpet. The presence of reputed financial institutions, corporate workspaces, good social infrastructure and excellent connectivity to the various parts of the city will drive growth in the region. Velachery has transformed into a prime residential destination. Presence of social infrastructure, connectivity to the key arterial roads and proximity to the CBD has made it an attractive residential location. The properties are in the price band of ₹ 3,991 - 11,108 / sqft depending on the builder and specification. The Off CBD location of Velachery is witnessing the infusion of mall space in the coming months. This will provide a further push for the growth of real estate along the region.

Real estate demand in West Chennai has soared after the saturation of localities in Central Chennai with price benefit still maintained. Due to lack of organised retail, residential housing is also limping when it comes to growth. However, office growth is being banked upon to pull in the buying crowd into these areas. Rapid industrial growth over the years can be witnessed in Sriperumbudur, with major global players in the manufacturing segment venturing into the region. It's connectivity to the Chennai Port, improved infrastructure, the establishment of SEZs and Software Technology Parks (STP) has provided the necessary boost to the growth of real estate in this region. Sriperumbudur is strategically located along the Chennai-Bangalore Highway and is approximately 40 km from Chennai City. The availability of quality manpower, improved infrastructure and the presence of major manufacturing industries will continue to drive real estate prospects. The proposed Bangalore-Chennai expressway, the multi-modal logistics hub and the Greenfield Airport at Sriperumbudur will change the real estate dynamics of this region in the years ahead. The 200 foot wide Chennai-Bypass road along the western corridor of Moggapair and Ayanambakkam is developing into a residential hub with prominent builders foraying into this region. Presence of social infrastructure, connectivity to the key arterial roads, proximity to the industrial belt of Ambattur and the developed neighbourhood of Anna Nagar is driving real estate activity in this belt. Oragadam is being developed as an industrial corridor with automobile majors foraying into this region. The improved infrastructure, presence of quality living spaces and connectivity to the city, would help this region evolve into a self-sustaining micro market in the years ahead.

The southern zone’s wealth is its commerce along the Old Mahabalipuram Road and the Grand Southern Trunk Road. It is home to a large number of IT/ITes facilities as well as special economic zones. Perungudi, Siruseri, Sholinganallur, Tambaram and Mahindra World City pull in a large workforce also giving a boost to residential space demand. IT/ITES corridor of OMR is developing into a self-sustaining hub with the presence of good schools, colleges, hospitals and organised retail. Further the infusion of mall space will provide the necessary boost to real estate activity in the region. It has also been observed that IT companies are consolidating their operations from various parts of the city, into a single premise located along OMR. Such a development would help create a greater end-user segment for real estate activity in this belt. The GST is a vital connecting link between Chennai and the city of Trichy. The region has several SEZs, IT Parks, educational institutions, premium hotels and also serves as a gateway to the industrial hubs of Oragadam and Sriperumbudur. The south of Chennai, primarily houses end-users employed in the IT/ITES and manufacturing segment. An improvement in the economic scenario would help drive growth in this region, backed by an inherent need to cater to the housing needs of the growing population.

The upcoming infrastructure development projects in the city such as the Outer Ring Road II and the Metro, monorail and mass rapid transit system will play a vital role in the growth of real estate.

Outer Ring Road II

The arterial road network connecting Nemilichery, Nallur and Minjur will connect NH-205 (Nemilichery) with the Chennai-Kolkata Highway (NH-5) and TPP road at Minjur through a six-lane highway. Land acquisition for the same is still in progress. As per reports, the metropolitan area is set to have satellite townships, each of around 1,000 acres, along the stretch of ORR and the Chennai Metropolitan Development Authority (CMDA) has already started the survey.

The Chennai Metro Corridor extending from Washermenpet to Chennai Central station to Chennai International Airport will improve the connectivity between the airport and Central Chennai via Guindy. “The entire 22 km Corridor 1 or Green Line stretch will be put into operation by the end of this year and, then, the remaining 14.5 km Blue Line or Corridor 2 from Washermenpet to Little Mount will be opened,” VK Singh, Chief General Manager, Underground Construction said. The stretch from Nehru Park to Chennai Central is expected to at the end of 2017.

The Chennai Central to Anna Nagar and Vadapalani to St. Thomas Mount corridor will decongest the city centre and St. Thomas Mount. Metro rail's first line was launched in June 2015 between Koyambedu and Alandur, covering 11 km through an elevated corridor and was followed by a 9 km elevated line from Little Mount to the airport in September 2016.

Chennai MRTS will connect Velachery to St. Thomas Mount and the Metro lines at St. Thomas connecting GST Road and locations such as Alandur, Guindy to Perungudi and Central Chennai. Chennai Metro Rail has opened the St Thomas Mount station for the public, but Southern Railway is yet to complete the long-pending work to connect Velachery station with St Thomas Mount. The work has been stalled as the state government is engaged in a legal battle with local residents over land acquisition.

With an aim to connect Vandalur to Kathipara, this monorail corridor will boost real estate demand along the route especially Tambaram as it enhances the connectivity to city centre via Velachery. The share of public transport in the urban transport system of Chennai is currently 27 per cent which is eventually proposed to be increased to 46 per cent by 2026 as per a proposal sent to the government at the Centre reiterating the importance of infrastructure projects in the city.

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  As per the Tamil Nadu Real Estate (Regulation and Development) Rules, 2017, all real estate projects and real estate agents have to register with RERA, if they are involved in development and sale of any real estate project having built up area of 500 sq.m or where the number of units exceed eight. No sale in a real estate project can be made without registration of the project with RERA.
  
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  About 70% of the amount collected from the allottees shall be deposited in a separate escrow account to cover the cost of construction and land cost.
  
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  Not more than 10% of the total cost of the unit can be collected from an allottee without a specified written agreement and the total cost of the unit shall be specified in the written agreement.
  
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  The developer of each project has to certify through an affidavit that he has legal title to the land on which the project is being developed free from all encumbrances and the period within which the project will be completed.
  
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  All units have to be sold mentioning the carpet area of the unit. It is obligatory on the part of the promoter to obtain completion certificate for the project from the prescribed authority. The promoter is liable to rectify any structural or workmanship defect or defect in quality or provision of service or any other obligation if brought to notice within five years from the date of handing over of the possession at his cost within 30 days.
  
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  It is mandatory for a promoter to upload complete and true details of the proposed project on the website of RERA, including details of registration, types of plots or apartments booked and list of approvals taken.