Chennai Real Estate – Long Term Prospects Intact
Reports of Chennai realty market facing slowdown aren’t deterring investors. Property builders seem unfazed with these reports and are going ahead with their planned construction.
Chennai real estate is driven by the end-user. Recent property reports suggest that investors don’t have much play in Chennai’s property market. Currently, the city’s real estate segment is going through a lull. The number of transactions have come down by 10-15% and the supply of residential and commercial spaces has also come down significantly. A recent report by Jones Lang LaSalle Meghraj (Chennai) reveals that 1.6 million sq ft of commercial space in Chennai was absorbed in between January-March 2008. This is marginally down from the demand of 2 million sq ft space for quarter of January-March 2007.
Chennai Property brokers say that it is a temporary phase. PBEL Property Development (India) Pvt Ltd has invested Rs180 crore in Chennai, to build a residential and commercial township. PBEL Property is a consortium of three real estate developers. PBEl will build a hi-tech residential complex on a 42 acre plot of land at Old Mahabalipuram Road.
Another property developer, Unitech in partnership with SSI and Arihant Foundations, have launched an integrated township at Chennai. This township will be spread over 7.6 million sq ft and will have residential, commercial and retail units. Emaar MGF has announced plans to invest $3 billion at 10 cities in south India. It plans to develop over 31 million sq ft area in key cities like Chennai, Hyderabad, Tirupati, Coimbatore, Cochin, Mysore and Mangalore.
Mumbai-based Hiranandani Infrastructure and Real Estate Company recently finished building its residential project in south-west Chennai. The promoters claim that this project, Hiranandani Palace Gardens, has been sold out and has many takers from the Gulf. Many of these buyers are investors who buy property at strategic location and sell it at a time when the property fetches best buy rates.
Overall, the property market isn’t affected by the slowdown reports. The interest level of property buyers, investors and builders remains unfazed.