In any city, the effects of a steadily-improving office market are bound to rub off on the residential market as well. In Chennai, OMR that is dotted with many IT/ITES developments from Taramani to Siruseri has the highest residential inventory as compared to any other growth corridors in the city. A large number of retail and hospitality projects outline the area that in-turn boost the residential market. Vijay Ganesh, office director, Chennai, Cushman & Wakefield, says the city started witnessing the development of integrated townships, gated communities, apartment high rises and villas near the IT corridor in the early 2000’s. This was to cater to an emerging white collared population in Perungudi, Taramani, Kandanchavadi, Sholinganallur, Thoraipakkam, Kelambakkam and Siruseri. “In the last five years, localities such as Pallikarnai, Medavakkam, Perumbakkam and Pallavaram-Thoraipakkam Road have started gaining traction due to increasing supply and new planned office space developments on IT Corridor,” he says.
Locations on the Pallavaram–Thoraipakkam road that are well connected to IT/ITeS office hubs on OMR with improving social infrastructure, are expected to see increasing market activity in the coming months. A. Shankar, national director, JLL, says localities such as Padur, Navalur, Kelambakkam, Siruseri, and Thalambur have mainly developed due to the presence of SIPCOT IT Park at Siruseri. “The expansion of IT parks has created a good demand for residential developments in these localities. Similarly, the presence of ELCOT IT SEZ at Sholinganallur has given thrust to residential demands in Pallikaranai, Perumbakkam, Sithalapakkam, Medavakkam, Ponmar, Semencherry etc,” he says.
Siruseri and Sholinganallur have witnessed absorption rates of 64 per cent and 68 per cent respectively. Moreover, the expansion of Phase-II OMR and gradual improvements in the commercial market in OMR (post-toll) will improve the residential market sentiments further. Localities such as Porur, Manapakkam, Moulivakkam, Ramapuram have witnessed rapid improvements in the residential sector due to the presence of DLF IT SEZ, L&T Infotech and other IT parks along Mount Poonamallee Road at Manapakkam. Shushmul Maheshwari, chief executive, RNCOS, says, “New launches in the city will be majorly concentrated in the peripheral markets especially along the IT corridor and Central Business District (CBD). In spite of a drop in new projects and bookings of residential units in the last two years, the interest of private equity and realty funds seems to be unaffected.”
Despite the anticipated growth, Ganesh says residential development in the peripheral areas hasn’t kept pace with other metros such as Delhi-NCR (Gurgaon and Noida), Mumbai (Thane and Navi Mumbai) and Bengaluru (Whitefield, Outer Ring Road, Sarjapur Road) due to relatively lower demand for office spaces and lack of social infrastructure. “It was only after the success witnessed by some developers in these cities that modern housing concepts such as high rise living, luxury housing, themed developments and gated communities started finding their way in the future developments envisaged by real estate developers in Chennai,” he says.
This clearly explains the need for infrastructure development to keep pace with realty growth. Maheshwari says that home buyers, especially those who want to invest in mid-segment and luxury units are always on the lookout for infrastructure in the vicinity. After the IT boom, the development of social infrastructure started taking shape in and around OMR due to the increase in FSI. Shankar adds, “In the coming months, retail and entertainment avenues will play an important role in the decision making process of buyers. With Phoenix Market City in Velachery being the only commercial centre in the vicinity, the area is not geared up to meet the social needs of its current and future residents.”
Developers have now sensed the demand and hence there are upcoming projects in a vision to capture the future and retain the current demand. There is great scope for the development of schools, colleges, malls, entertainment centres and hospitals in these areas. Ganesh points out that OMR has only one cinema complex and shopping mall in Navalur which is around 10 kms away from prominent locations. “Despite the spurt in residential realty, many localities along the IT corridor lack basic civic amenities such as drinking water, drainage and roads. The pressure on existing social infrastructure is only set to increase with enhanced connectivity via Outer Ring Road and Velachery-Tambaram Road,” he says. Mallika Ravi, CEO, Lancor Holdings, says, “Though OMR was originally designed as an IT expressway, the road on both sides has not been laid completed. With the area witnessing traffic jams already, it would be a good idea to extend the Metro Rail up to Siruseri.”
