Look at the map of Chennai, says Mr G.R.K. Reddy, Chairman and Managing Director, Marg Ltd, to the north, west and to the south the suburbs of Thiruvallur, Avadi, Sriperumbudur and Chinglepet the focus is on industrial development.
But it is the ‘south’ that offers the best opportunity to provide good quality of life.
The city too is growing to the south with development of commercial and residential space. Chennai, in recent decades, has been steadily growing southwards – Adyar, Besant Nagar, Thiruvanmiyur – and now along the Old Mahabalipuram Road up to Siruseri over 30 km away.
Mr Reddy was talking about the prospects of growth and the current market trends to the south of Chennai after completing a quick circuit of the 600-acre Marg Swarnabhoomi SEZ and township project coming up about 90 km south of Chennai on East Coast Road.
The ECR and OMR offer scope for planned development of urban areas close to Chennai, he feels. The 30 km stretch of OMR referred to as the ‘IT corridor’ led the upswing in the Chennai real estate market till last year, and the subsequent fall during the slow down. With an estimated 20 million sq.ft of IT space in the pipeline, the slow down in the IT sector has hit the developers hard. But OMR simply cannot be ignored, says Mr Reddy, and once the revival starts, it is well set to exploit the opportunity.
Unfortunately in the short term, the development has been skewed towards commercial space, particularly IT space while social infrastructure like schools, shopping space, healthcare and entertainment facilities were slow to come.
It is this gap that has been the weak point for OMR. The rapid development also resulted in spiralling land prices which went up to Rs 20 crore an acre and literally priced the product whether office or residential space out of the market.
But that is rapidly being corrected and with that correction and the adjustment in prices that developers are concentrating on, it is only a matter of time before interest is revived, says Mr Reddy.
Residential space itself is in transition, gone are the plans for offering apartments of at least 1,200-1,500 sq.ft, the norm is now more like 750 sq.ft to make it more affordable.
Also, the market is picking up definitely, assures Mr Reddy.
Marg Ltd is into infrastructure development apart from construction and real estate development, it has just completed work on the Karaikal Port further to the south of its Swarnabhoomi project where two SEZs and an integrated township are coming up. There is definite buoyancy in the market with investments in infrastructure, demand for cement, steel, electronic hardware... companies are doing well.
Despite the worst of a slowdown no company went out of business, they just consolidated during the worst of the slow down last year, he said.
Even real estate developershave realised the need to widen their market base through more products targeting the affordable segment. That can happen only when the land cost is low, about 20 per cent of the final cost . That offers long term scope for value appreciation for the buyers. And the project should have the facilities.
Value for money
Marg Ltd has consciously focussed on the periphery of the city, it has two major residential projects – apart from Swarnabhoomi the other is Pushpadruma, a residential project at Kalavakkam on the IT corridor. Value for money and quality of life are key objectives.
Swarnabhoomi will create a `live-work-play’ environment offering value for money for business and residential space. With apartments priced at Rs 7 lakhs and going up to Rs 40 lakh, there is something to suit everyone’s budget.
In phase-I , over 300 apartments are ready for delivery and will be handed over on the occasion of the A R Rahman live concert being organised on October 11; 280 more will be, by January. Marg is getting ready to launch next phase with over 720 apartments, he said. In the commercial space companies have evinced interest in the project with projects like Exemplarr Worldwide, a 400-seat rural BPO and Grundfos taking up space, according to Mr Reddy. To businesses the office rentals of about Rs 10 a sq.ft and option of a worker base that is only a walking distance from the work spot makes it an attractive proposition, he said.
But it is important to blend in with the existing environment. As a part of its corporate social responsibility initiative, Marg Ltd has taken up development work in the surrounding areas. Marg Ltd has been doing development work in the 14 villages surrounding the 633 acre project site. Along with the Confederation of Indian Industry, has conducted skill development programmes and provided basic amenities like water supply and renovated places of worship.