A suburb that was once recognised as the city’s industrial growth corridor has gradually evolved into an emerging residential market. Oragadam is home to numerous IT and automobile companies such as Renault Nissan, Nokia Siemens Network, Moser Baer, Komatsu, Ashok Leyland, Toyota, Apollo Tyres, TVS, which makes it the preferred destination for self-contained real estate projects.
Its close proximity to the proposed green field airport, NH-45, NH-4 (Chennai-Bangalore Highway) and good connectivity channels to Chennai, Kanchipuram and other districts, has led to an increase in the number of residential projects in the area, says A. Shankar, National Director-Strategic Consulting, JLL. “Over the last five years, real estate prices have more than doubled owing to a huge demand for residential units. There is a cumulative supply of 20,000 units in this region and the absorption rate is about 65 per cent. Most projects were launched in 2011 and the average capital price appreciation is about 11 per cent. However, the highest appreciation was 31 per cent during 2011.”
The average capital value here is about Rs. 3,500 per sq. ft and projects vary between Rs 18.8 lakh and Rs 35.7 lakh, depending on size and type of unit and location. Large industrial parks in this corridor have boosted jobs, which is pushing the demand for residential units.
Chandan Jain, Joint MD, Vijay Shanthi Builders, says Oragadam’s image of a distant suburb offering plotted developments and projects for those who cannot afford to invest closer to the city is changing. “Companies encourage employees to purchase homes in the vicinity in order to cut transportation costs,” he says. “Industrial development in Oragadam has led to housing demand pools in neighbouring areas. The market can be broadly classified into middle and lower mid-income segments,” says S. Ramaswamy, director, RECS Group.
One big blow to the market here is the recent closure of the Nokia plant. Equally, in the Sriperumbudur-Oragadam region, most electronic and hardware manufacturing units have also shut shop due to low export and high domestic demand for products that do not require SEZ facility. Shankar says, “Other units which have closed fully or partially are Motorola, Flextronics, Foxconn, Tessolve etc. This is due to zero demand for manufacturing products in SEZ. Most companies doing well are those catering to the domestic market. Also, many manufacturing SEZs are in the process of getting de-notified and this has led to a decline in growth.”
Both Shankar and Chandan claim that the slowdown and impact on the residential market is likely to be temporary, as infrastructure development is raising the bar. “Rail connectivity from Avadi to Sriperumbudur, dedicated freight corridor from Chennai- Bangalore, a six-lane Chennai Peripheral Road from Sriperumbudur to Ennore port, widening of SH-57 (Singaperumalkoil to Sriperumbudur via Oragadam) to six lanes, a 350 acre aerospace and logistics park at Sriperumbudur, are just a few of the upcoming infrastructure projects in the area,” says Shankar.
Ramaswamy says that connectivity will improve once work on the ongoing flyover, a major four-road junction that connects GST Road at Singaperumal Koil, Walajabad, Sriperumbudur, Perungalathur, is completed. Residential plot developments are on the rise and upcoming projects include Hiranandani Park, Arun Excello - Temple Greens, and Casa Grande Arena.
Says Arun Kumar, founder of Casa Grande, “The potential is enormous. Builders are specialising in construction of modern homes with urban amenities.” Chandan of Vijay Shanthi adds, “The residential sector will witness mammoth growth due to the concentration of various industries. However, development of recreational facilities such as malls and multiplexes is important.” Ramaswamy of RECS says Oragadam is set to be the preferred location for mid-end residential investors who work in areas such as Sriperumbudur, Chengalpet, Kanchipuram and GST Road.
Needless to say, government intervention is crucial for the area to achieve its maximum growth potential. “The micro market is flourishing and will witness healthy absorption. We foresee a marginal increase in capital values in 2015, provided the government enhances infrastructure and manufacturing. Government permits to sub-lease, transfer interest and assignment of plots will speed up the process,” says Shankar.
Watch out for . . . - Development of Sriperumbudur industrial area at Rs. 5,000 crore - Greenfield airport (4,800 acre) at Sriperumbudur at Rs. 20,000 crore - 350 acre aerospace and logistics park - Dry port near Sriperumbudur at Rs.380 crore - Chennai - Bangalore six-lane expressway at Rs. 3,480 crore - Proposed rail link Avadi-Guduvancheri via Sriperumbudur-Oragadam - Six-lane, 162 km Chennai Peripheral Road connecting Mamallapuram to Ennore Port Courtesy : JLL |
