AAt the recently held Real Estate Dialogue (RED) — a panel discussion organised by Magicbricks and CRISIL — developers pointed out that in the last seven months, Perumbakkam has witnessed a steady rise in sales in the residential sector. Emerging as the one of the fastest growing suburbs in the city, Perumbakkam’s proximity to OMR is the biggest reason behind the high sales, says VS Sridhar, Managing Director-Chennai, Cushman & Wakefield. Shushmul Maheshwari, chief executive, RNCOS, says as OMR is home to a large number of IT companies, there is always a demand for homes. “Areas like Perumbakkam and Medavakkam offer employment opportunities and the IT sector benefits residential and commercial real estate in such areas,” he says.
With schools, colleges, and hospitals coming up in this micro market, developers have been aggressively launching projects in the last few years. Haresh Kishor, Director, KG Builders, who has projects in Perumbakkam, says, “A lot of commercial space has surfaced on OMR and it has contributed to the demand. Most of the projects launched in the last five years have been residential developments.” Almost all builders provide essential infrastructure within their project and as customers prefer homes located close to their workplace, it is a win-win situation. “With rental prices increasing steadily, it helps us builders to convince buyers to own a home,” he adds. An apartment’s basic price starts at around Rs. 3,500 per sq. ft. based on the amenities provided.
While there is a steady demand for homes in Perumbakkam, the lack of infrastructure facilities such as roads, sewage treatment facilities, etc., is apparent. So how are developers attracting a sizeable population to buy homes? Maheshwari says localities like Perumbakkam, Medavakkam, and Tambaram are yet to get access to necessary infrastructure, but as they are located along the IT corridor, the market value of properties has increased. “Developers are luring buyers on the basis of a project’s proximity to OMR, ongoing development of socio-economic infrastructure, and available educational infrastructure in the area,” he says.
Almost 90 per cent of the projects in this micro market cater to the affordable and mid housing segment and 5 per cent to the high-income group segment. “While we see most of the demand from the IT/ ITES sector who are first-time buyers, there us also a significant demand from second-time buyers,” says Sridhar of Cushman. Mid-segment housing has been the most popular segment, although now developers are coming up with luxury projects and are anticipating a high demand. Maheshwari adds, “Potential buyers are however discouraged by properties priced above Rs. 1 crore. Developers must ensure units are priced in the range of Rs. 40 lakh and Rs. 70 lakh.”
Another interesting trend to follow is that of buyers who are now expanding their budget and are willing to pay extra for projects along OMR, rather than for a home in the city. Arun Kumar, managing director, Casa Grande, who is tapping into the Perumbakkam market, says as developers now provide a wide array of amenities, buyers are keen on investing. “Developers design their projects in such a way that residents don’t need to leave the premises for basic needs such as groceries, medicines, etc. Upcoming projects are providing amenities such as a gym, swimming pool, club house, and supermarket. These amenities are no longer reckoned as a luxury but as a necessity.”
Speaking of the area’s anticipated growth in the next few years, Kishor says, “Prices have been rational will be the same for the next five years. Areas like Perumbakkam will experience a boom in rental values and this will enhance the buyer’s sentiment.” With the IT sector expanding, the demand for residential projects in south Chennai will definitely increase in the forthcoming years. “Perumbakkam will also see more infrastructure development such as better roads, flyovers, public transport facilities, and water lines to cope up with the heavy residential density. Commercial development will also take place,” adds Kumar of Casa Grande.
