Chennai Real Estate 2010 - Latest trends

Chennai, a city in Tamil Nadu on the Bay of Bengal; formerly known as Madras is among the most beautiful of cities in India with its inspiring intellectual inheritance and shrine architecture. Situated in a region with many rivers and brooks and with a healthy population of 6.9 million, Chennai is distantly situated from the national capital Delhi and has been an important and one of the four metropolitan cities since the historical times. Chennai is the fifth most populous city in India and fourth most populous metropolitan. With the materialisation of Multi National Companies in India, Chennai’s economy today has broad base in car, computer, technology, hardware manufacturing, and healthcare industries. The city is in fact India’s second largest exporter of software and has caused an increasing first choice of the city as a big business centre by most important international companies, who have invested immensely in the financial system. The Chennai property market has seen an escalation of almost 200 percent in the last few years but with the global slump in the real estate industry, Chennai real estate has slowed down. The residential real estate prices in Chennai have grown by leaps and bounds making it difficult for buyers to purchase a home in the city. People are awaiting the market to stabilise further despite recent corrections. This has caused a 90% drop in demand for residential projects since the start of the year. The commercial sector is not being spared either having seen a 15% drop according to media reports. The IT MNC’s largely drive the demand for Chennai properties but due to the current recession, many companies have postponed their expansion plans. Experts however predict that the market will bounce back. Besides global inflation, the home loan rates have been steadily increasing, coupled by increasing input costs which have resulted in slump property transactions in Chennai. Quite notably, Old Mahabalipuram Road, the most blistering real estate destination in Chennai is also experiencing a downfall blaming the effect on lack of infrastructure facilities and real estate agents admit that there have been only a few transactions in the areas for quite some time. A few of the eminent developers in India have shown their interest in increasing real estate in Chennai while property builders at the moment are constructing properties of the highest standards to pick up on the current slump.

DLF to open Luxury malls in Hyderabad and Chennai

Real estate developer DLF Ltd that currently operates luxury mall -- DLF Emporio -- in the Capital is considering to start similar projects in other big cities, including Hyderabad and Chennai, that are seeing traction for high-end brands. "We are looking to open more luxury malls in cities like Hyderabad and Chennai," DLF Malls Business Head Savitri Devi Singh said. The company is currently in talks with the existing tenants at its DLF Emporio for the same. "There are some 10-12 anchor brands we are in discussions with to bring up similar models in other cities," she said. According to Singh, who did not disclose the investment planned by the company in future projects, developing malls for housing luxury brands is an attractive proposition. "DLF Emporio has already broken even and is doing very well in terms of revenue generation. It is a very viable business," Singh said, although she declined to divulge the amount, developer invested on the mall. According to her, the mall is currently operating at a conversion rate of about 70 per cent. Some of the brands in DLF Emporio include Giorgio Armani, Salvatore Ferragamo, Louis Vuitton, Cartier, Fendi, Dior, Just Cavali, Aigner, Tods, Tiffany’s, Burberry and Hugo Boss, along with some leading Indian designers. "Even Chandigarh has good potential for selling luxury goods, but we are not sure whether it would be right to open another mall there due to its proximity to Delhi," she added. Cities like Bangalore and Mumbai already have luxury malls such as the UB City and Galleria, respectively and entering there is a much lesser attractive option. If experts are to be believed, there is a dearth appropriate retail space in India that is keeping many luxury brands away from the country. "There is a serious need to have more retail spaces for luxury brands to expand or enter India," AT Kearney Principal Neelesh Hundekari. According to a CII-A T Kearney report, India's luxury market, which is small compared to global standards, is likely to grow three times and touch $14.7 billion by 2015. In 2009, the luxury industry, including products, services and assets, was estimated at $4.76 billion.

Tata Housing plans new residential project in Chennai

Tata Housing, the real estate developer for all consumer segments, has forayed into the Chennai residential market. It plans to invest nearly Rs. 2,000 crores in current fiscal. It proposes to develop nearly three to four million sq. ft in the few years. Addressing a press conference here on Tuesday, Brotin Banerjee, Managing Director and Chief Executive Officer, Tata Housing Development Company Limited, said the proposed investment includes Crescent Lake, an integrated township project, spread over in 25 acre of land at Oragadam, an industrial hub of Tamil Nadu. The company proposed to develop 2,200 residential units in the next four years. The price range of the flats would be around Rs 14 lakh to 35 lakh. The project cost was estimated to be Rs. 650 to700 crore. Mr. Banerjee said the phase I, which would have 960 apartments with six high rise towers offering 1BHK, 2 and 3 BHK apartments with a minimum size of 570 sq ft and the maximum of 1,406 sq. ft. The cost of the apartments would be Rs. 2,500 sq. ft. The second phase would have row houses and 3 and 4 BHKs. The company was planning to tie up with the local land owners and develop projects in Chennai. It was planning to take up two more projects - large value home townships on 40 to 50 acre, priced around Rs 6.5 lakh to Rs 35 lakh and a premium project in Chennai city. Apart from Chennai, the company was planning to develop a residential project at Hyderabad on 30 acres of land. The project would be developed along with a joint venture partner, who would bring land for the project. Mr. Banerjee said the company was talks with various State Governments to promote affordable housing projects. It had initiated talks with the government to promote affordable housing projects through public private partnership (PPP) model. Already the company had entered into a MoU with the Assam Government to create commercial developments in the state. The first MoU was signed between THDCL and The Department of Industries and Commerce of Assam for creation of commercial space, including business parks and IT buildings in the state. The second MoU was signed with the Guwahati Metropolitan Development Authority (GMDA) for developing a township and other infrastructure projects under the PPP model within the State. He said the company was in decision with other State Governments to promote affordable housing projects.