Realty market of north and south Chennai Introduction Chennai, located in the Southern state of Tamil Nadu, is one of the important metropolitan city in India. Being the capital of the state, the city garners high demand for housing across different segments of the realty market. Other economic factors driving realty growth include the manufacturing industries, tourism and IT industries. Currently, the suburbs have emerged as major hotspots for real estate activity in Chennai. Data suggests that there has been a steady increase in demand for residential realty in these suburbs mainly driven by people migrating here for work. As a result, there has been a proportionate hike in prices over the years. This price rise can be attributed to various reasons such as decreasing land parcels in these areas and increasing cost of raw materials and labour. Nevertheless, there is high demand and a number of projects are in the pipeline. Through this report, we have tried to highlight the realty trends of localities in north and south Chennai. We have selected four localities each from both north and south parts of the city, having maximum number of projects and are in close proximity to each other. These localities include Medavakkam, Pallikaranai, Madipakkam and Velachery in the south and Kolathur, Ambattur, Oragadam and Perambur in the north which are nearly neighbouring locality to each other. Figure 1 South Chennai Map showing location of the localities South Chennai Medavakkam: Well connected to all the surrounding localities in the south, Medavakkam is a suburban micro market which has high demand for apartments. The Velachery main road connects Medavakkam to the OMR and Medavakkam - Mambakkam road runs through the heart of the locality connecting Medavakkam and Mambakkam. The locality is littered with bus stops on the main road. As seen in Fig. 1, the locality is in close proximity to Chromepet, about 6 km away. Further, it is about 12 km away from the international airport. Strategically located, Medavakkam is in close proximity to micro markets such as Chromepet, Tambaram, Pallavaram which accelerates the infrastructural development in this locality. The area is well suited for those looking to make
investments for profitable returns. The demand in the locality is driven by the IT hub located in the vicinity which houses companies such as Tata Consultancy Service (TCS), Cognizant Technology Solution Limited, etc. Pallikaranai: Located close to the OMR, Pallikaranai is another hotspot for realty development in Chennai. The locality has a robust supply of 2BHK and 3BHK residential units. The 200 ft. wide road runs through the heart of the locality connecting it to Alandur and termination at the Grand Southern Trunk (GST) road. The other parts of the city and the international airport are easily accessible through the GST. Additionally, the OMR also connects the locality to outer southern suburbs and enhances intercity connectivity. The locality has varied-sized apartments ranging from 500 sq. ft. to 1500 sq. ft. with prices ranging from 20 lakhs to more than a crore. There is maximum supply in the mid-segment (of around 33 per cent), priced between Rs 40-60 lakhs. In the luxury segment (priced between Rs 60 lakhs 1 crore), there is 29 per cent supply for apartments. Data suggests that there is high demand for decently-priced rental apartments as well. The key reason for increasing housing demand here is its geographical location. The area is located close to the OMR which makes it highly accessible to IT hubs near suburbs like Medavakkam, Velachery and Sholinganallur. Other factors driving demand in the area include good connectivity and frequent public transportation service which makes the area accessible from all ends of the city. Madipakkam: This is another prominent suburb in Southern Chennai which shares boundaries with Velachery and is in close proximity to the OMR. Here again, the demand for housing is driven by the IT professionals working in multinationals located along the OMR. These professionals prefer to live close to their workplace so as to have a more comfortable and faster accessibility. Accessible both by GST and OMR, Madipakkam is yet another suburb that offers residential units at affordable price in comparison to other neighbouring localities. Infrastructure development is happening at a rapid pace in the area. Data suggests that every quarter there is a constant increase in demand for property here. And, interestingly, the supply has also kept pace with the increasing demand. Velachery: The locality, situated in south Chennai, is also in proximity to the OMR. This suburban locality can be cited as one of the most coveted real estate hotspots in Chennai. The demand is driven by the IT industries and the fast developing infrastructural developments in the locality. Velachery has a very good liveability factor with numerous shops, commercial spaces and malls. The OMR and the GST are two roads connecting this locality, enabling both inter and intra city accessibility by these roads. The apartment sizes for 2BHKs varies between 900 sq. ft. to 1250 sq. ft. while for a 3BHK it is anywhere between 1150 sq. ft. to 1450 sq. ft. The general trend seen is that the prices of apartments in these southern suburbs are comparatively cheap when compared to those in the north part of the city.
North Chennai Chennai Bypass Road Poonamalle High Road Figure 2: North Chennai map showing location of the localities Kolathur: Kolathur, a suburb located in north Chennai, has a fast developing social and physical infrastructure. This is one of the key reasons for the growing popularity of the area. The locality is connected to the Chennai - Hyderabad highway via the GST road. Additionally, well-established road network and frequent bus transportation make the locality highly accessible. The MRTS (Mass Railway Transit System) also connects the locality to different parts of the city. The sizes of 2BHK apartments varies from 410 sq. ft. to 1200 sq. ft. while 3 BHKs range up to 3500 sq. ft. Besides having good social infrastructure facilities such as hospitals, banks, schools and colleges, the locality is also witnessing high demand due to its proximity to Ambattur. The workers from this industrial belt are the main source of housing demand in the locality. Oragadam: Oragadam lies between two national highways namely NH-4 and NH-45. It is 26 km away from Chennai Meenambakkam international airport and 20 km away from Tambaram, an important train terminus in the city. There is huge demand for residential plots in Oragadam. However, one of the major challenges seen here is lack of proper infrastructure. But demand at present is rising due to its proximity to the industrial belt in anticipation that infrastructure will soon develop. The social amenities are 15 minutes away from the locality and are connected by Surapattu road which joins the Chennai Bypass road.
Ambattur: Ambattur is a suburb located in north Chennai which boasts of good connectivity to other parts of the city. The locality is well connected by the Chennai bypass road which passes through the heart of the locality. There are other several important roads that pass through the locality like Vanagaram main road and Chennai-Tiruttani highway. It connects the industrial belt and SIDCO industrial estate with the locality and also to other areas across the city. Add to this, there is the presence of a railway line with three connecting stations in Thirumullaivoyal, Annanur and Ambattur. Frequent bus connectivity is an added advantage and one can fetch a bus at a frequency interval of every 5 minutes. The key factor driving housing demand here is the working population in the industries located in close proximity. One can fetch a 2BHK for a monthly rental of Rs 6,000 Rs 11,000 with sizes varying between 800 sq. ft. to 1300 sq. ft. It has low prices compared to nearby areas like Anna Nagar where the same house rental would be not less than Rs 15,000 per month. Ambattur is one of those localities which offers affordable rental properties in North Chennai. Perambur: Perambur can be referred as one of the costly suburbs situated in north of Chennai. It is located in proximity to the GST road and is one of the key railway junctions in the rail network of Chennai. It is also served by LRTS which connects different parts of the city. Market trend analysis between the localities: Figure 3 Average price per sq.ft. Figure 4 Average size for 2BHK Figure 5 Average size for 3BHK Figure 6 Average price of 2BHK
Figure 7 Average price of 3BHK Conclusion: The graphs above indicate different values of price per sq. ft., area and price in different localities in north and south Chennai. It is fair enough to say that almost every locality has the same price except for a few. For example Velacherry and Perambur are comparatively high due to the presence of various high priced apartments. While the price is lower in Oragadam due to the lack of infrastructure development and larger availability of land. As for average price, Velachery has the costliest apartments. To conclude, south outshines north in terms of residential realty by a narrow difference. Both have their demand pulling factors and as long as this demand factor strives, the city will expand due to urban sprawl and more projects will be constructed. South Chennai The urban sprawl extends towards the south along the OMR and ECR. The apartments are costlier in this zone The demand is oriented towards IT sector. Supply and demand are higher. Connectivity is driven by the GST, OMR, ECR and LRTS. Investor sentiments are high due to more profitable returns. North Chennai The Urban sprawl is comparatively stagnant. The apartments are cheaper comparatively to the south in this zone The demand is oriented towards port related activities and manufacturing industries. Supply and demand are lower than the south. Connectivity is driven by the southern railway network, Chennai Bypass, LRTS and minor arteries. Comparatively lower investor sentiments.
CommonFloor.com maxheap Technologies Pvt Ltd #298,299 SGR Towers 7th Cross, Domlur, Bangalore - 560071. ---------------------------------------------------------------------------------------------------------------------------------------------- Authors Antone Aravind T Research Associate antone.aravind@commonfloor.com Bangalore Gaurav Gupta Research Analyst gaurav.gupta@commonfloor.com Bangalore Meha Singla Manager Research meha.s@commonfloor.com Bangalore ---------------------------------------------------------------------------------------------------------------------------------------------- Disclaimer: The document above is written by the Domain Research Team at Commonfloor.com, India s fastest growing real estate website known for its unbiased prognosis in Real Estate sector. The information provided in this report is based on CommonFloor data which is collected from various publicly known sources viz, websites, documents and maps. It should be considered as a guideline and not in absolute certainty. While care has been taken for groundwork, no responsibility is accepted for the accuracy of whole or any part. This information is confidential and the sole property of CommonFloor.com. It should not be reproduced in any form, in part or whole, without prior permission.