Chennai real estate prices soar, builders look outside

Thursday, 28 December 2006, 06:00 Hrs
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Chennai: Real estate developers in Chennai are forced to explore the city outskirts for new business opportunities, as prices within the metropolis have spiraled to dizzying heights matching the soaring demand.

On one hand, a square foot of space in the city's upscale Poes Garden apartment - home to former Tamil Nadu chief minister J. Jayalalithaa - now costs a whooping 14,500. On the other hand, the demand for homes is only rising: by 2020, Chennai will need at least 50,000 new homes, according to market experts.

There is a huge demand for residences, just as there is a demand for office space, shopping malls and hotels - especially within a radius of 50 to 80 km around Chennai, close to the Sriperumbudur manufacturing hub, said Manoj Namburu, managing director of the Alliance group.

Sriperumbudur is now home to top multinationals like Nokia, Ford, Hyundai and Flexitron.

The 220 billion Alliance group has just announced a 300-villa project west of Chennai. "With Sriperumbudur emerging as a major industrial hub, there is no doubt the value of our products will only appreciate," said Namburu.

"Alliance's villas and apartments will cost anything between 6 million and 50 million," he said, adding: "The cost indicates value addition and ambiance, rather than just the brick and mortar."

Also among the costliest residences in the southern metropolis are Vishranti Homes' apartments - a 4,200 sq ft home costing about 60 million.

India's real estate industry is valued at $12 billion and it is growing at a compound annual growth rate (CAGR) of 30 percent. In the last six months, Tamil Nadu has drawn investment worth 30 billion in this sector. "The potential for real estate expansion here is high," he said. "Even people working abroad want to come back here as they get the same level of housing comfort."

Developers believe the city is poised to see a buzz in the building activity in 2007.

Most realtors in Chennai are small operators. The Vijay Shanthi group, for example, recently offered only 15 apartments, each costing 40.25 million. The Fern, close to Siruseri, the IT hub off the Old Mhabalipuram Road (OMR) in south Chennai, has 48 villas on seven acres of land on offer.

Alliance has 25 acres of land for its Porur project and "we hope soon to come up with a similar project in the south, on the OMR", Namburu said.

As for shopping centres, the city boasts of well-known retailers like Shoppers Stop, Spencer Plaza, Lifestyle, Westside, Landmark, Globus - all have a presence here for more than five years and are raring to expand.

Ispahani Center, with 54,000 sq ft of retail space in the city center, houses Café Coffee Day, Archies and Swarowsky.

About three million square feet of retail space is planned for Chennai's suburbs in the coming year, a market expert said, with 15 new malls coming up in the city.

Ampa Housing Development Pvt Ltd has set up Ampa Center One, a 750 million project.

"Mall-wise, it is a win-win situation in Chennai. We will house 90 leading brands," said Ampa Palaniappan of Ampa Housing. Fast food chain McDonald's will make its debut in this city at this new mall, he said.
Source: IANS
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