The announcement of the country’s first rail auto hub, to be established in Tamil Nadu, was made in this year’s railway budget. To come up in Walajabad near Chennai, the project aims at shifting the transportation of cars to rail rather than road. Spread over 5,000 sq.m., the facility will cater to over 1 million units of four-wheelers manufactured every year in the Oragadam-Walajabad micro-market area. The rail auto hub can also be used as an ideal distribution centre for the transport of Tata and Honda vehicles to various parts of the city and country.
Any such major infrastructure project will obviously boost real estate in the area. But with Walajabad already being a predominant industrial area, the challenge lies in developing the residential realty market there. The proposed station is located near the major auto units of Oragadam, Sriperumbudur, and Singaperumal Kovil, which have manufacturing facilities of top auto companies such as Nissan, Hyundai, Ford, and Daimler Chrysler. To facilitate the functioning of the hub, the connectivity between Walajabad and these areas will need to be strengthened, says A. Shankar, National Director, JLL India. Logistics and warehousing hubs in these areas will also be further developed. Once employment opportunity is generated, the demand for residential activity will also surge. The rail-road hub is proposed to be developed in two phases. Phase I, expected to be operational by the second quarter of 2016, will have a loading capacity of 300 four-wheelers. Phase II, which is expected to commence in the early fourth quarter of 2016, will be scaled up to 800-1000 four-wheelers.
A residential project in such a region will be a kind of value-add to the area. Pooja Jain, Partner, Atikramya, says this particular industrial belt is well-connected by rail, road, (Outer Ring Road and national highways), water (Ennore port and Chennai port), and air (the airport is close-by). “These areas have good ground water and new power plants are coming up that could ensure uninterrupted power supply. If drainage and metro water facilities are also developed, faster growth can be ensured.” Now, however, the existing infrastructure is insufficient. The road connectivity is the highlight of the region, and is expected to expand to four- or six-lane roads.
Presently, the area consists of plotted developments and experts believe that after the announcement, a number of residential projects — apartments, villas — could come up. Plots hold 85 per cent of the market share here, but the trend of apartments is also emerging. Large-scale projects with organised retail developments are expected to come up as well.
Prevailing land prices in the region vary between Rs. 350 and Rs. 799 per sq. ft. and the market would clearly like to see this increase to the Rs. 900-Rs. 1,400 sq.ft. range in the next 5-10 years. Says S. Nataraja, GM-Commercial, Navin’s. “The rail auto hub will generate employment opportunities that will, in turn, create a demand for housing. We can also expect more freight forwarding companies to set up operations around the hub.”
Owing to its proximity to Oragadam, Walajabad is expected to benefit. Mallika Ravi, CEO, Lancor Holdings, says, “The rail connectivity from Walajabad to Chennai, Chengalpet, and Tambaram is a positive factor.” Since there will be a large population of blue-collared workers employed in the hub and in surrounding auto companies, residential projects in and around Walajabad are expected to cater to the low- and mid-income groups as well.
T. Chitty Babu of Akshaya says smart developers will look at picking up good land parcels now, but it is still too early. The mid-size realty players will wait for more development before taking the plunge. Says Babu: “You will find individual buyers looking at either building homes or holding land, which can be sold at a higher price later. It will be at least two years before anything concrete happens that will be of interest to large developers.”
