A recent study indicates that of the 360 projects launched in the city last year, less than 3 per cent were in north Chennai. Despite the Metro Rail and development of the Ponneri smart city, the realty market in the north lags behind other areas. This is mainly because projects are being launched ahead of time and the demand in this micro-market is yet to pick up, says Kanchana Krishnan, Director – Chennai, Knight Frank (India). “The unsold inventory is as high as 30 months, and this needs to be fixed. North Chennai, with its proximity to the city and schools and hospitals, attracts developers. If projects are launched in the right sizes and prices, the demand will surely increase,” she says.
Simon Selvaraj, Associate Director - Strategic Consulting, JLL, points out that despite infrastructure growth, there are not too many takers for north Chennai due to limited employment opportunities. “The lack of vacant land parcels closer to the city is the prime reason for the sluggish real estate growth in this region,” he says. Unlike south Chennai where the majority of demand comes from white-collar workers, areas such as Perambur, Purasawalkam and George Town are preferred by blue collar workers — industrial, port and public sector.
While these factors contribute to the low demand, developers are still aggressively promoting projects in the area. An integrated township is being planned at the Binny Mills complex in Perambur and high-rise apartments by noted city-based developers are also underway. So, with an existing overflow of projects, why are developers launching new ones when there are few takers? Manoj Sai Namburu, MD, Alliance Group, who has recently launched a 20-acre gated community in north Chennai, says, “While the overall market has been sluggish for the last 18 months, there is keen interest among customers looking at investing in the north. Land owners are anticipating a surge in prices and holding onto land waiting for the Ponneri smart city to be launched. Developers are also banking on infrastructure development (the Padi-Ambattur flyover) and acquiring land parcels.”
Attracting buyers and assuring them value for money is crucial keeping in mind the limited demand. “Since the demand comes from a closed set of buyers, most projects cater to specific needs such as designated residential towers for vegetarians, community halls, etc. Compared to the south and west parts of the city, properties in the north are reasonably priced and improvement in connectivity and infrastructure would lead to steady growth,” says Selvaraj, JLL. “With an overall positive sentiment, expectation of interest rate cuts, and an overall economic boost, we expect this micro market to stabilise in the medium term,” says Krishnan of Knight Frank.
Infrastructure development is key to accelerating housing demand. With the expansion of two major ports and a large special economic zone being planned, north Chennai, often considered an industrial backyard, is expected to witness a spurt in real estate activities in the commercial and residential space, says Suresh Jain of Vijay Shanthi Builders. “The price of land is cheaper by 20 per cent in the north prompting several builders to develop properties here. A string of initiatives like the Metro Rail up to Ennore and Manali, the Chennai-Bangalore freight corridor, the elevated expressway from Maduravoyal to Chennai Port, the development of new port Kattupalli, and the new bus terminus at Broadway, have attracted developers,” he says. Rajesh Babu of RECS Group, says, “There is demand for new projects with facilities specific to large townships. There are potential locations like Mannadi, Tondiarpet and Tiruvottiyur with demand for mid and lower-mid end categories and locations such as Perambur, Purasawalkam, and Thiru Vi.Ka. Nagar with a demand for upper-middle and high-end categories.
Considering these factors, a price rise happens even before the actual development. So, a further increase in price could make these areas out of bounds for many. Hence, residential developers plan to reap the benefits of low investment.
Alongside infrastructure, improving civic amenities such as ensuring water supply, sewage management, maintaining roads, street lighting and waste management will go a long way in enhancing investor sentiment. “Projects should be developed with schools, shopping centres and healthcare facilities to make them more appealing,” says Selvaraj.
Locality | Cost (INR in lakh per ground) |
Perambur | 150 – 300 |
Purusawalkam | 350 – 500 |
Kilpauk | 350 – 500 |
Madhavaram | 50 – 70 |
Kolathur | 90 – 100 |
Anna Nagar | 400 – 600 |
Ayanavaram | 250 – 300 |
Vepery | 200 – 300 |
Villivakkam | 175 – 300 |
Courtesy: JLL |
