Chennai Strikes REAL(TY) Gold: Here’s the Plot
Development of various industrial parks, large-scale investments from auto manufacturers, infrastructure upgrades and industrial-friendly policies from the State Government have contributed to the growth of Chennai. The presence of two ports, an international airport and major railway stations make Chennai an important industrial hotspot. Home to some of the biggest IT Parks, the IT/ITeS sector has contributed significantly to the economic growth of the city since the 90s.
Major Growth Drivers
- Industrial parks (especially manufacturing) and two ports are the backbone of Chennai’s economy.
- Development of state-of-the-art industrial parks attracted Indian and Global automobile giants to set up their facilities.
- These auto giants also attracted huge investments, which impacted associated sectors like infrastructure and real estate. Some of the major auto companies include BMW, Hyundai, Ford, Hindustan Motors and Mitsubishi etc.
- Chennai is also a base for Electronic Hardware industry and some of the industrial zones are specifically dedicated to them for eg. Sriperumbudur Industrial Park.
- Chennai is the 2nd largest exporter of IT and IT-enabled services after Bangalore. The OMR Corridor has witnessed development of several IT Parks while several others are in the pipeline.
- Emergence of various Industrial and IT Parks catapulted realty growth and urban sprawl between western and southern regions of the city.
- However, the development of proposed projects like Ennore SEZ , Mahindra – Sumitomo Industrial Park and Sricity etc. are expected to provide the much-required impetus to the dormant Northern region.
Real Estate Overview
Chennai real estate market is gradually attracting buyers’ interest post the economic slowdown of 2012- 13 owing to its affordability and positive industrial outlook. Traditionally dominated by plots and villas, apartments here took precedence post the IT boom in 90s. While apartments continue to dominate the new launch units, there has been a decent drop in its supply in 2015 as compared to 2012. Talking about numbers, the share of apartments decreased by 16 per cent in 2015 while the plots and villas registered an increase in their supply in the same year. This clearly indicates buyers’ preference for plots due to aspirational value attached to it. Interestingly, the IT corridor of Old Mahabalipuram Road (OMR) is witnessing the launch of large number of villas whereas plots are being developed along the industrial corridor of Grand Southern Trunk (GST) Road. The detailed analysis of typology split has been shown below.
Top Micro Markets , 2012
- New Launches concentrated in Southern and South Western Regions
- Growth Corridors – OMR, GST and ORR
- New supply of plots and layouts were scattered between western and southern regions of the city
- IT Corridor of OMR witnessed launch of all property types.
Top Micro Markets, 2015
- While Southern region retained its top position in the new launch supply, it is interesting to see the Western region witness major launches in all property types.
- Growth Corridors – OMR and GST Corridors
- Interestingly, the launch of plots and layouts is concentrated along the major industrial pockets of GST Road and Tiruvallur.
- While apartments continue to dominate the property spectrum along the OMR Corridor, villas and row houses also saw a decent supply in the region in 2015.
