The Hindu : Tamil Nadu / Chennai News : Proximity to schools, vital factor in rental appreciation

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Wednesday, Nov 04, 2009
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Tamil Nadu

Tamil Nadu - Chennai

Proximity to schools, vital factor in rental appreciation

Aloysius Xavier Lopez

CHENNAI: The proximity to schools has been a conspicuous factor that has played a major role in the residential rental appreciation in and around the city.

Many parents are already busy planning their strategies to seek admission in well-known schools as the admission process in most of the schools next academic year would start by December.

However, the rate of rental appreciation has been relatively slow when compared to that of last year. The demand for new property or those available for rent near educational institutions was on the rise last year.

A rental appreciation of more than 15 per cent has taken place in the last year in Gopalapuram for two bedroom apartments, says L.Dayanidhi, vice-president of Chennai Real Estate Agents Association.

However, the high end luxury apartments in most of the residential areas irrespective of their proximity to schools have experienced a dip in rental value.

For example, a 2,100 sq. ft. luxury apartment in Gopalapuram which had a rental value of Rs.55,000 last year has takers only for Rs.35,000, according to a real estate agent.

President of Chennai Real Estate Agents Association Abdul Ravoof said the impact of proximity to school on rentals has started to differ with the size of the homes. There is a marked difference between the increase of rentals between two bedroom and three bedroom apartments in the past one year. The reason is that the supply of two bedroom apartments is lesser than the demand, says Mr.Ravoof. Most of the seekers of rental apartments near prominent schools are in the age group of 30 to 40 with school going kids and want homes with a monthly rental less than Rs.20,000.

Principal of PSBB Nungambakkam Valli Arunachalam says “Advertisers and owners are trying to gain mileage out of their property’s proximity to schools. A home closer to school is good for education of children.”

Residential areas around schools such as Vidya Mandir Adyar have experienced a rise in rentals of more than 10 per cent in the past one year, according to real estate agents.

There have been cases of people selling their houses to buy homes in proximity to prominent schools in areas including Gopalapuram, Egmore and Adyar. But the lack of new residential projects particularly with two bedroom apartments in those localities has made the demand for rentals for such homes greater.

In terms of rental accommodation in such areas in the main city, the supply is short as most migratory professionals are looking for a home next to a good school, says Ramesh Nair, Managing Director-Chennai, Jones Lang Lasalle Meghraj.

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