Real Estate

All eyes on North Chennai’s realty market

The area’s real estate growth in 2020 banks on multiple infrastructure projects, says Sanjay Chugh

Once a collection of fishing hamlets, North Chennai is one of the oldest and most historic parts of the city. Over the decades, its economy has revolved around port-related businesses such as fishing, transportation, and logistics. As Chennai evolved, the economic profile of this region has also developed. While South Chennai has become the IT centre of the city, the population in the north has been mostly employed with public sector and industrial enterprises.

With their superior infrastructure, the southern and western markets of Chennai have successfully attracted many industries including IT-ITeS, automobiles and manufacturing. After waiting in the wings for many years, North Chennai’s housing sector is yet to take off. With the state government rolling out multiple infrastructure projects to improve the region’s connectivity, the area may finally realise its real estate potential.

Realty report card

Spanning from Ambattur in the north-east to Washermanpet, Tondiarpet and Thiruvottiyur in north-west, several areas of North Chennai have shown slow but steady development. As per Anarock research, around 5,150 units have been launched in North Chennai between 2015 and 2019-end — which is approx. 7% of the total supply of the city during these years.

Perambur, Purasawakkam, Puzhal, Ponneri, and Tondiarpet areas were top in the list in terms of real estate supply since 2013. These micro markets are also expected to gain traction in future due to their strategic location. On the absorption side, the North region has sold approx. 4,060 units in the last five years which accounts for just 5% of Chennai’s total residential sales.

The market sentiment improved towards the end of the year 2019 as launches started gaining momentum. In the last quarter of 2019, North Chennai ranked second in the number of new launches just behind South Chennai.

In another positive, the unsold inventory in this region is way lower than its southern and western counterparts which together consist of 92% share of the total 32,020 unsold units in the city. On the contrary, as on December 2019, the north region has merely 2,300 units unsold, which is approximately 7% of the total unsold stock in Chennai.

Growth drivers

North Chennai’s economy has been traditionally driven by industrial and port-related activities due to the presence of two major ports: Chennai port and Ennore port and a private port in the vicinity, Adani Kattupalli port. The region’s strategic location and burgeoning export industry has also provided impetus to the warehousing sector. North Chennai also hosts an industrial area – Manali Industrial Area - which is home to major petrochemical companies such as Manali Petrochemicals, Balmer Lawrie, Chennai Petroleum Corporation and, Indian Oil Corp. The IT-ITeS sector is yet to make inroads here with office rentals in the range of ₹70-80/sq. ft./month.

Infra initiatives

For North Chennai to compete with the economically vibrant southern and western markets of the city, sound infrastructure and connectivity is imperative. The good news is that with the completion of phase 1 of metro rail, North Chennai’s connectivity has significantly improved. Corridor 1 of metro rail starts from Chennai Airport and ends at Washermenpet, providing connectivity to areas such as Washermenpet and George Town. Corridor 2 runs through Kilpauk and Purasaiwakkam.

A slew of projects have been further planned by the State government to scale up the region’s connectivity and augment its development potential:

1. Chennai Peripheral Ring Road (CPRR): The road will run through Thamaraipakkam, Thatchur and Kattupalli areas of North Chennai and will also connect the strategic Poonjeri junction of ECR to Ennore Port.

2. Outer Ring Road (ORR): North Chennai will enjoy seamless connectivity to South and West Chennai via the remaining stretch of the ORR from Nemilicherry to Minjur.

3. Metro Rail: Metro corridor 3 is expected to improve North Chennai’s connectivity with South Chennai through Central Chennai whereas metro corridor 5 is expected to improve the connectivity through West Chennai.

Going forward, the timely completion of these projects will decide the fortunes of the region’s growth and real estate market.

The writer is City Head and Senior Vice President, Anarock Property Consultants

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Printable version | Feb 18, 2020 11:52:57 AM | https://www.thehindu.com/real-estate/all-eyes-on-north-chennais-realty-market/article30641950.ece

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