FOREWORD

Mild tapering of inflation and a normal monsoon finally paved the way for lowering of REPO rate by 25 basis points, taking it to its lowest level in the last 5 years. The continued fall in both imports and exports, coupled with tepid investment demand has led RBI to pass on the cut. The Y-o-Y GDP growth rate also slowed down from 7.9% in the JFM quarter to 7.1% this quarter. The expected rise in oil prices from next year is also a major concern for the economy, which imports most of the oil it needs. High NPAs in the banking sector and construction delays in infrastructure and real estate also remain as major concerns. However, the economy remains strong despite headwinds facing the world economy and geopolitical turmoil across Asia and Europe. The Manufacturing Purchasing Managers’ Index (PMI) is still above 52 level and GDP growth forecasts till 2020 by various multilateral agencies, remain above 7%. The lowering of Repo rate is expected to bring down both project finance as well as home loan costs, lowering the overall cost of buying a house. The inevitable implementation of Real Estate Regulation and Development (RERA) Act, 2016 has led developers to hasten the delivery of their projects. This trend was clearly evident in the quarterly average prices data of Under Construction (UC) vs Ready-to- Move-in (RM) stock, where the premium commanded by RM properties came down due to increase in RM stock, as a portion of UC projects were delivered over the quarter. RERA is a step in the right direction but will bear fruit only in 2-3 years, and till then the Indian real estate sector remains in turbulent waters, and its health can only be gauged through inferential means like pricing and inflation in the sector. Price, as an end-product of interaction between the underlying demand and supply elements, incorporates all the sector related imperfections like delays and surge/dearth of transactions. Its trend also serves as a guidance to fiscal decision making by the government and RBI and investment decision making by private equity funds and retail home buyers. Real estate in every city is heterogeneous and each locality and project can be mapped to different budget segments and geographies. Each budget segment and geography corresponds to a certain share of supply and consumer preference in the market. Towards this end, Magicbricks presents a holistic price Index for each of the 14 major cities in India. The City Index reflects the price movement across localities, geographies and budget segments in the city. This bottom-up approach helps to identify factors affecting demand-supply dynamics of the city. Analysis of City Indices over a 3-year period shows that Navi Mumbai had the highest gain of 18%, while New Delhi continued to face tough market with a 21% decline. Regionally, Western India performed the best with 8.9% average gain, followed by South with 7.6% increment. North India saw an average decline of 7.4%, while Kolkata had the same average price as eleven quarters ago. It is important to note that any gains made are eroded when benchmarked against inflation in economy, in the study period. Another important sign of our times is the 8% premium commanded by the Ready-to- Move-in (RM) properties over the Under Construction (UC) properties at a pan-India level. This ratio was at 5.1% eleven quarters ago and is a reflection of the falling consumer confidence in timely delivery of projects.

These are changing times and we would love to hear from you. Do write to us at Sudhir Pai [email protected] and share yours views on this report and how we could make CEO, Magicbricks.com PropIndex even better. METHODOLOGY Realistic price discovery has been the pricing. If, on the other hand, you are The Interquartile Range technique biggest problem area in the Indian a seller looking for benchmark pricing, works through measuring variability real estate market. As consumers you will effect the fastest sale if your of each data set, while dividing the and industry struggle to arrive at a asking values are close to the buyer’s data set into quartiles. The technique realistic benchmark pricing to assess paying power. measures the value of data points on the first and third quartiles of the data the true value of their individual units, There are various co-relations of and calculates the difference between Magicbricks, as the largest repository demand and the overall real estate the two. of residential property listings, brings market as well as its future potential. you the trusted Indian Apartment Not only is demand a preceding This range, called ‘IQR’, gives the Price Index in a new and easy to indicator to supply, it is also a fairly effective extent of data set, while use format. Mirroring the Indian good indicator of actual transaction removing the first 25% and the last Real Estate scenario, this price index activity in the region. 25%. Subsequently, a test is applied presents an animated representation to each of the values in the data set. If We have aggregated the 14 cities of the real estate market. a particular data lies within an IQR of covered under the report into various the first and third quartile values, then Magicbricks publishes the quarter-on- localities. While calculating the city that data is considered part of the data quarter inflation and deflation trends level property pricing indicator, we set, otherwise not. The set of listing of the residential real estate prices in have applied demand as weight to values of each locality are statistically India. It collects real estate demand- each locality. This weight is equal to cleaned. supply data on a daily basis for more the locality’s share of the demand than 100 cities in India, of which, the being contributed to the city’s total Magicbricks, on an average, covers fourteen top cities are selected for demand. As a consequence, the more than 500 localities for Tier-I cities computing the National Property Price locality receiving higher demand for of India. Yet for the sake of analysis, Index. residential units will be given a higher we take only those localities where the The National Property Price Index and weightage. Following that, each recipient demand is at least 0.05% of its constituent indices are subjected to city’s price movement is calculated by the city’s total demand. Only localities a series of stringent steps. aggregating the price movements of with at least 50 actively traded individual localities, according to their properties have been included in the Each quarter, Magicbricks measures individual weightages. analysis. Following that process, we the individual property level price shortlisted various localities which changes, which are then aggregated at In terms of checks and balances in some sense, impact the pricing the locality level. While comparing the towards making the data and dynamics of the city. average pricing figures for the current analysis more robust and objective, quarter and comparing with the we have made sure that superfluous We then calculate the average prices of previous one, quarterly price changes information does not deviate the the city for the quarter, while applying are calculated. These price changes are desired results. Hence, we have demand weights to the average prices further aggregated at the city level applied checks and balances at the of each locality. These average prices and even further at an all-India level. locality level listing data collection and at the city level are further aggregated aggregation. to the final outcome of the ‘National As the top receiver and aggregator Price Index’. of residential demand, Magicbricks’ A statistical technique called “Inter- data provides consumers with Quartile Range” (IQR) has been used The difference in Under Construction realistic benchmarks to the assess to ensure that unintentional input and Ready-to-Move-in property has true property pricing. Where demand deviations of house size and price been assessed and included in the exceeds supply, consumers have no figures, which may distort the actual report. Rental yield and affordability chance of negotiating values. value of the house and corrupt the too has been addressed for the top 10 analysis, are addressed. The technique localities by supply in every city. These However, where demand is far lower aims to remove the outlier data sets, are critical tools which well used can than supply, buyers can look for more while securing the correct values. help with realistic price discovery. options and therefore, negotiate GLOSSARY & DEFINITIONS

1. City Property Index :This is a composite index which is a function of supply of properties as well as the average capital appreciation/drop in various localities of the city in the quarter. The City Index is the weighted average of the average rate per square foot in that locality and the supply of properties from that locality. Localities with higher supply of properties will have a bigger impact on the Index. 2. Price trend basis budget segments: To better understand the city’s price trend, the localities have been divided into budget segments basis their capital value (Rs/sq ft). We have tracked the weighted average price for each budget segment for a 2+ year period from quarter ending September 2013 to quarter ending September 2016. Subsequently, the movement of the localities in each price segment is mapped to derive respective short term and long term price change trends. The number of budget segments vary according to the city characteristics. 3. Zone wise distribution of localities: The various localities in the cities are all geographically divided into five key regions: Northern, Southern, Eastern, Western and Central. The localities are analyzed at the local zonal level to better understand the effect of the various drivers of price and demand, which are active mostly at the zonal level rather than at the city level. 4. Zone wise distribution of property budget segments: To better understand how each of the city zones contribute to the city’s supply, and how they are able to provide housing at various price points, the supply is distributed into budget segments across various geographic zones. For instance, if a zone has most of its supply in the premium budget segment, then it naturally becomes a premium destination within the city. The price changes within the various budget segments are also analyzed at the zonal level to go to the depths of the price changes across the city and to easily contribute the price changes to local factors. 5. Capital Value Tables (given in Annexures): This shows the actual range of prices within which properties are available in each locality in the quarter. Prices are shown in Rupees per square foot basis, these are the prevailing rates for properties in each locality. 6. Price trend – Top 10 localities by consumer preference: This section presents the price trend of the Top 10 localities in the city by consumer preference. These localities have the highest consumer focus and assessment of price trend in these localities assists in understanding the prevalent and future price trend in the city. 7. Price trend basis construction status: This Index looks at the movement in prices of Under Construction (UC) and Ready-to-Move-in (RM) properties across localities in the city. It is a weighted price index where weight is assigned to each locality basis its share in the consumer preference in the city. HOW TO USE THE PROPINDEX

base number, the index is said to have fallen. When it is more than that number, the index is said to have gone up. This gives users like you, who are interested in property markets, an idea of how the property market in your city has performed vis-à-vis other cities. When the economic conditions are good and the builder is actively developing and the consumer is actively buying, the index value rises above 100. When markets are flat due to lack of economic activity and therefore developer and consumer disinterest, the index values remain at 100 or drop below that. Very high index values shows a lot of investor activity and therefore severe peaking of property values. As an end user you should avoid buying when there is intense buying and speculative activity. That however, is a good time for you to sell as high property prices will give you good returns on your investment. When the index value comes down dramatically, the chances are that you will not get good returns as a seller. But if you find the property that you like in this cycle, it is a good time to negotiate the best values and buy as the chances are that there will be fewer buyers in the market. Since the PropIndex is now 5-years old, a look at how the index values have moved over the years gives you a good idea of how the market has performed in different quarters. If you are interested in how property markets have performed across a period of time, the PropIndex values give you a fair idea of Jayashree Kurup, Head content the movement. Do I get any specific Advice that helps my property decisions? What is the PropIndex? Magicbricks has a team of data scientists and researchers who are constantly studying the property markets and values to get the trends. In the past two The PropIndex gives you locality-wise property values in two forms – as locality quarters, for instance, they have noticed that ready-to-move-in property has been price ranges for sale and rent in the annexure to every city with additional significantly more expensive than under construction property. This probably information on whether it has gone up or down in the quarter, and what is the indicates that consumers do not want to buy property that is not complete and has rental yield in that locality. These prices are based on the listed prices of properties chances of delayed delivery and prefer to spend more to buy property that they can for sale or rent on the website www.magicbricks.com. This helps you to understand purchase and move into. This is useful to you as a buyer and alerts you to general the average locality price ranges and to assess whether the price of the property trends of other buyers. for sale or rent that you are assessing, lies within the average price ranges in the locality. In a market where data or information is hard to come by, this data helps What is the editorial and how is it useful to me? you to assess whether you are being quoted rational values for the property you are The editorial team of Magicbricks constantly assesses the property market considering. developments and factors such as infrastructure announcements and transport Why do I get locality sale and rent prices and how do I use them? corridor development, to figure out how they can impact values of residential real estate in your city. In each edition of PropIndex they assess what all has happened When you buy a property you must know what the average locality prices are. in the quarter and how it will impact the value of the property that you are When you buy property directly from the developer, the price per sq ft is the value interested in. This analysis gives you an idea of the issues you should consider when you pay. Then there are additional preferred location charges (PLC) such as vastu buying property in that city. related, view related or floor related. When you buy from the secondary market or from an individual seller, the price is determined basis a notional value of the How do I use the different sections of the PropIndex? property. The sale values in the PropIndex help you to establish the price you The key takeaways are useful in getting an overview of the property market in your should demand if you are a seller or what you should pay if you are a buyer. Rental city. The geographical distribution of localities allows you to assess in which areas values, similarly, are the average values that are listed on the website. They serve as property is available for sale. The distribution of properties by capital value allows benchmarks of the expected rental prices in the locality. you to freeze the price segment where you are likely to get the type of property What is rental yield and why is it significant? you are looking for. The budget wise price change helps to compute how the price range that you are looking for has been performing. If values have been rising in If you pay a certain price for a property, there is an amount you earn per annum as your budget of interest you may have to hurry up with your property decision if you rent. When the rental income is expressed as a percentage of the property value, it are an end user. If it has dropped, figure out if there is a problem in that category. is rental yield. It is a good yardstick to compute which property to select as a Buy to This exercise has been done for each part of the city. The price trend by construction Let investment. basis tells you which the best stage is at which you should enter the property Why is it called a Property Index and not Property values? market. The price changes basis construction status takes this analysis a step forward. Read it carefully and you will be able to assess exactly when you should Magicbricks has a very large number of listings. The number per locality depends enter the market as a buyer and as an investor. on market conditions and how many consumers or brokers or developers choose to post their properties for sale or rent. When we are computing values at the locality What is the Corridor of Growth? or city levels we do not want any one locality to skew the index value of the city. Magicbricks has figured that the bulk of new property in any city is developed As a result when any one or more localities have more than usual or less than usual along a few transport corridors leading out of the city. These have been identified number of listings, using the ratio of price to number of listings helps to even and studied for stock, price rise, current status, future potential and its physical out unusual spikes or troughs in the data. This gives you unbiased city or locality and social infrastructure such as water, power, sewerage and drainage facilities, averages. transport links, schools, colleges, hospitals and entertainment centres in the How do I use an index number? vicinity. Advice has been given on the basis of rental and buyer’s demand, the best configurations to buy – 2, 3 and 4BHK, past and future estimated price trends and Magicbricks Index was computed first in 2011. The values in the year 2011 have also how it figures in the master plan of the city. News updates of each corridor been used as the base value and is assumed to be 100. When the value is below that allows you to understand the drivers of those corridors. VOL 6, ISSUE 2; JUL-SEP, FY 2016-17 propindex.magicbricks.com

[Jul-Sep 2016] n line with general lack of activity in the The worst performer was the North region, 2016 quarter, as three years ago. Only two residential market, the National Property where prices fell by more than 7% in the of the top 14 cities considered for PropIndex IIndex remained stagnant at the same level last three years. The second best gains were saw a price decline in the last three years and as in the last quarter, with prices falling by a witnessed in Southern India, where prices both belonged to Delhi-NCR. While prices in marginal 0.12%. This is in continuation of the moved up by 7.6% over the same period. Ghaziabad fell by 6%, New Delhi performed inactivity seen in the last many quarters. the worst, with a whopping 21% fall in prices. In terms of historical price change, Navi NPI is the weighted average of consumer Mumbai was the best performer with a In terms of quarterly change, Hyderabad preference share of 14 cities and their significant 18% increment over the last three performed the best with a 2.8% increase over individual City Index value. years, followed by Hyderabad and Pune, which the last quarter, followed by Bengaluru at had a 10% gain each. Thane stood fourth with 2.0% and Navi Mumbai at 1.2%. Overall, the On a quarterly level, South was the only region a 9% gain, while Bengaluru and Ahmedabad Southern region was the best performer, with which inched up substantially in terms of had a 7% gain each. Next were Mumbai and Chennai also giving a 0.7% price increment prices from the last quarter while North fell Chennai with a 5% gain each. and standing fourth in the top 14 cities. the most. Although it cannot be said with certainty that prices have hit rock bottom Gains of lower than 5% were witnessed only In terms of worst performers, four cities saw and will not fall any further, any downward in the North and Eastern regions, with Noida price drop, with the highest drop in Greater movement, going forward, will be restricted. and Greater Noida showing the maximum gain Noida of 1.7%, followed by Noida witnessing in Delhi-NCR of just 4% each. Both, Gurgaon a drop of 1.2%. Mumbai and New Delhi were On a three year scale, Western India has done from Delhi-NCR and Kolkata from the Eastern the other two cities noting a price drop, better than all other regions, with its cities region, had the same price in the Jul-Sep amounting to 0.8% and 0.7%, respectively. having 8.9% price increment, on an average. propindex.magicbricks.com 02 VOL6, ISSUE 2; JUL-SEP, FY 2016-17

[Buyers looking for an exit] he realty sector in India has been tepid for This is reflected in the price differential India level, 69% of RM properties are in the the past few years with low transaction between Under Construction (UC) and Ready- resale bracket while balance 31% are offers of Tvolumes and stagnant price level. Weak to-Move-in (RM) properties. Magicbricks fresh booking or ‘New Properties’. The graph economic scenario, perceived high price tracks the weighted average price for UC and gives the share of resale and new properties level and lack of consumer confidence in the RM properties on a pan-India basis covering for each of the 14 cities analysed. developers with respect to project completion 14 cities. It compares the 3 year trend from Sep The predominance of resale options under led to transaction volumes reducing 2013 to Sep 2016 where Sept 2013 has been RM properties category indicates that many drastically. taken as the base. It also shows the premium buyers who had made purchase from an (discount) of RM properties over UC properties. Magicbricks research shows that consumers investment perspective are looking to exit are willing to pay more for Ready-to-Move- Our national level index for tracking prices their investment. With end-users looking for in (RM) options as compared to under- of RM and UC properties shows that at a RM options to protect themselves from project construction (UC) properties. They’re willing pan India level, RM properties command an completion risk, it is likely that many investors to pay a premium on completed projects average 8% premium over UC properties. This with RM properties see this as the best rather than expose themselves to delivery level of premium for RM properties has held opportunity to liquidate their asset(s). risk. Project delay leads to consumers having for the last three quarters. Most of the investors looking to exit at this to bear additional financial burden of paying Analysis of actively traded properties on point are unlikely to make any gains. In many rent over and above applicable home loan Magicbricks shows that when it comes to cases, when the return is indexed to inflation, instalments for an extended period. All this RM properties, an overwhelming number of the return might actually be negative. This is has made consumers wary of putting money options are in the resale segment. At a pan- because the prices have either been stagnant in Under-Construction projects. or have seen insignificant increment over the last few years. The following graph shows percentage change in the City Price Index for 14 cities from Sep 2013 to Sep 2016. As is evident from the graph, the weighted average price across most cities has seen marginal increment over the last three years. In case of cities like Delhi and Ghaziabad, the price levels have declined. In all other cases, when the price increment is indexed to inflation, there is an implicit price decline. Regional wise analysis of the ratio of ‘New’ and ‘Resale’ options under RM segment shows that VOL6, ISSUE 2; JUL-SEP, FY 2016-17 03 propindex.magicbricks.com

from Under-Construction projects. One set of inventory is getting sold multiple times while another set with the developers remains unsold. This is adding to delay in completion of projects as developers are not keen to complete projects where unsold inventory is on a higher side

l In the prevailing market scenario, large resale inventory also impacts the price level in a project as well as overall market. Price quote in the resale market is lower than the builder’s price and this impacts saleability of the unsold inventory with the developer. Further, the developer cannot increase the price and out-price his inventory vis-à-vis markets which historically had high investor resale options to end-user ratio have corresponding higher l New project launches also have to be percentage of ‘Resale’ options in this segment. sensitive to the prevailing price in the resale Major North Indian markets like Gurgaon and segment in their price segment Noida, which have seen large scale residential development, have 80% or higher ‘resale’ options in the RM segment. Similarly, all Conclusion Western Indian cities have a high share of Ideally, transaction activity in the resale such options in the RM category. Opposite segment gives depth to the primary segment. phenomenon was seen in case of all South It allows investors to book profit and unlock Indian cities – Bengaluru, Chennai and their capital. However, in the present Hyderabad. These markets have had high scenario where transaction activity is low and end-user participation and this reflects in the Market Impact consumers are looking for Ready-to-Move-in Presence of a large number of resale options ratio of ‘New’ and ‘Resale’ options. Both these options, the resale segment is likely to do puts pressure on the market in multiple ways: options have almost equal share in the RM better than the primary market and continue to put pressure on the primary market. segment in these cities. l First, these resale options add to the unsold inventory available with developers, thereby These statistics also indicate that supply in Given the large percentage of resale properties exacerbating an already difficult scenario markets with high ‘resale’ versus ‘new’ options available in the market, this situation is likely to persist in short to medium term. in the RM category was in excess to demand at l Large number of resale options in Ready- the given price points. to-Move-in projects take the demand away CHENNAI propindex.magicbricks.com 04 VOL6, ISSUE 2; JUL-SEP, FY 2016-17

[PROPINDEX - CHENNAI] [Key Takeaways] The City Index moved up by 0.65% 1.1%. The lower budget segments in an increase of 1%, which was the this quarter, after remaining the Rs 3,000-5,000 per sq ft range, highest for any region stagnant in the previous quarter. which accounts for half of the city’s Price in the Northern zone of the city The Jul-Sep 2016 quarter had more consumer demand, witnessed price increased by 0.6% while that in the localities with price increment than increment of more than 1% Western zone of Chennai having low price decline On an average, prices in South cost housing witnessed a marginal Around 65% of the localities Chennai, which accounts for most decline in the quarter witnessed price increase averaging of the new development activity Analysis across 41 localities 3.0%, while the balance 35% and has more than 60% share of shows that on an average, Under localities witnessed an average price consumer preference in the city, Construction properties were 14% drop of 2.1% witnessed a price increment of 0.5% more expensive than the Ready-to- Price movement across most budget in the quarter. Move-in properties in this quarter segments has been positive with the Although, Velachery, which is the The average difference in prices Rs 9,000-11,000 per sq ft and largest locality by demand in the has remained almost at the same Rs 5,000-6,000 per sq ft segments Southern region as well as in the level for the last seven quarters. witnessing an increment of 1.8% whole of Chennai, witnessed a price While the weighted average price of and 1.9%, respectively decline of 3% Ready-to-Move-in properties was Rs The greater than Rs 11,000 per sq ft Average price level in the centre of 5,873 per sq ft, the same for Under was the only price segment which the city, which consists of prime Construction properties was witnessed a price drop, averaging residential localities, witnessed Rs 6,838 per sq ft

Good investment environment for buyers EDITORIAL

ase of conducting transaction plays a key architects and licensed builders to submit office-retail complexes are emerging as the role in real estate dynamics. To boost the drawings for planning permission. Applicants alternatives to high streets and even malls are Esector, the state government is making can check the status online using a reference gaining popularity. technological advancements to make the number. Following scrutiny, the results of While talking about the Smart City project, the process easy, quick and convenient for buyers. building plans will be sent to the mailbox of current status is that Special Purpose Vehicles Early September, the state government declared the applicants. Apart from the convenience have been established. With the highest the launch of software which will allow online factor, this will help in increasing productivity number of Smart Cities (12) approved, Chennai preparation and submission of registration and accuracy of the drawing result, speed up received the most funds - Rs 2,936 crore for the documents to the sub-registrar’s office by the scrutiny process, reduce delays and manual Smart City Mission, Rs 7,082 crore for AMRUT, consumers. This will prevent impersonation and errors during the process, etc. Rs 340 crore for SBM, Rs 45 crore for Hriday registration of fake documents. A major trend spotted in Chennai market and Rs 1,796 cr for Housing Mission. Greater Ease for buyers was again reflected when was the emergence of office and commercial the amount of funds received, greater is the CMDA simplified the process of obtaining plan transactions which had a positive ripple effect responsibility. The state government needs to approvals, wherein the authority itself would on the residential segment. Office space was pull up socks and accelerate work pace. carry out verification of land records. Another absorbed by MNCs and big IT/ITeS companies Infrastructure push such as completion of example of ease in business – the DTCP has in areas such as Mount Road and OMR which Chennai Metro Phase-II is being seen as a big gone online with the approval process. The pepped up consumer sentiments of nearby plus for consumer sentiments. online building plan scrutiny module helps localities. Also, co-working spaces and Magicbricks Bureau VOL6, ISSUE 2; JUL-SEP, FY 2016-17 05 propindex.magicbricks.com CHENNAI

[Geographical distribution of localities] The map shows the geographical spread of South Chennai dominates the development landscape localities considered for calculating the City Price Index. The localities have been grouped together to understand the zone wise price trend in Chennai The city has grown in a 180 degree arc along major roads emanating from it towards north- west, west, south-west and south. Of these, most of the development has happened along the Old Mahabalipuram Road (OMR) towards the south and NH-45/GST Road towards the south-west. For the purpose of this report, these two roads are clubbed under South zone Most of the IT/ITES office space clusters in Chennai are located in this zone. Many IT/ITES and other sector SEZs have also come-up here. Residential development is also highest in this corridor, attracting home buyers to invest here It accounts for 62% of consumer preference and 63% of actively traded properties in Chennai

Properties distribution by capital value (Rs/sq ft) The adjacent graphs shows the distribution of actively traded properties Apr-Jun 2016 to Jul-Sep 2016 by their capital values. The lower budget segments of homes worth less than Rs 60 lakh, account for most of the supply in Chennai Nearly 64% of properties are in the two lowest budget segments which cover Rs 3,000-5,000 per sq ft range. The share rises to 76% if Rs 3,000-Rs 6,000 per sq ft budget range is considered Individually, the Rs 4,000-5,000 per sq ft range is the largest segment with 43% supply. This is followed by Rs 3,000- 4,000 per sq ft and Rs 5,000-6,000 per sq ft segments with 21% and 14% share each. Other budget segments have approximately 22% share The overall price movement in the city is determined mostly by the lower budget segments. Given the supply in these segments, large scale transaction is required for meaningful price movement CHENNAI propindex.magicbricks.com 06 VOL6, ISSUE 2; JUL-SEP, FY 2016-17

The geographical spread of various budget segments shows that the South zone has presence of properties in a large range, starting from Rs 3,000 per sq ft and going up to Rs 7,000 per sq ft. In almost all the budget segments present in the zone, it has the highest or second highest share of supply in Chennai South zone has an overwhelming share in the Rs 3,000-4,000 per sq ft and Rs 4,000-5,000 per sq ft brackets. Within the Rs 4,000-5,000 per sq ft segment, more than 85% of the supply in the secondary residential market is in this zone. Similarly, more than 75% the supply in the Rs 3,000-4,000 per sq ft in the secondary market originates in the southern zone. South Region has 65% of the total supply in city Higher budget segments in the Rs 9,000 per sq ft and above are present exclusively in the East, North and Central zones. These localities are located close to the traditional centre of the city

[CITY INDEX] The City Index moved up by 0.65% this Jul-Sep 2013 to Jul-Sep 2016 quarter, after remaining stagnant in the previous quarter. The Jul-Sep 2016 quarter had more localities with price increment than price decline. Almost 65% of the localities saw price increase averaging 3.0%, pushing up the Apr-Jun 2016 Index value by 1.8%. The balance 35% localities saw average price drop of 2.1%, pushing down the Apr-Jun 2016 Index by 1.1%

The City Index for Chennai reflects the traded properties. The weight assigned price movement across 41 prominent to each locality is its share of consumer localities. These localities have been preference in the city. This makes for a chosen using the twin criterion of share comprehensive Index for localities with in the overall consumer preference in high consumer preference and high Chennai as well as share of actively number of actively traded properties VOL6, ISSUE 2; JUL-SEP, FY 2016-17 07 propindex.magicbricks.com CHENNAI

To understand the contribution of various Budget wise price change budget segments and localities in the Apr-Jun 2016 to Jul-Sep 2016 Index movement, we have grouped 41 localities under the Index into budget segments on the basis of their capital values. A further micro picture of price movement is presented by looking at price change across different geographies and their budget segments Price movement across most budget segments has been positive with the Rs 9,000-11,000 per sq ft and Rs 5,000-6,000 per sq ft price segments witnessing an increment of 1.8% and 1.9%, respectively The greater than Rs 11,000 per sq ft was the only price segment which witnessed a price drop, averaging 1.1%. The lower budget segments in the Rs 3,000-5,000 per sq ft range, with half of the city’s consumer demand, saw price increment of more than 1% The price movement across zones: Geographic and budget wise price change East Apr-Jun 2016 to Jul-Sep 2016 East zone has few localities assumed in this report and these fall in the higher price segments of Rs 9,000-11,000 per sq ft. This segment in the zone saw 1.1% increment in prices over the last quarter This increment was on account of localities like Adyar witnessing a major increase in capital values North All the budget segments except the over Rs 11,000 per sq ft segment witnessed price increment. The highest increment of 3.2% was witnessed in the Rs 9,000- 11,000 per sq ft budget range The above Rs 11,000 per sq ft budget segment fell by a significant 4.5% over the last quarter West West zone has the presence of properties mostly in the lower budget segments. Overall the zone saw a marginal decline of 0.2% in the average property values CHENNAI propindex.magicbricks.com 08 VOL6, ISSUE 2; JUL-SEP, FY 2016-17

with prices falling more for these lower Price change – Top localities by consumer preference priced properties Apr-Jun 2016 to Jul-Sep 2016 South Overall, this zone recorded an average price increment of 0.5%. Surprisingly, all five budget segments in the Southern region witnessed a price increase, indicating an upward pressure on the prices here Velachery, which is the biggest locality by demand in the South region as well as whole of Chennai, witnessed a price decline of 3% Centre All three budget segments in the Central zone of the city saw price increase, reversing the last quarter’s trend. The cheapest budget segment of Rs 5,000- 6,000 per sq ft had the highest price increase, averaging 3.5%

Price trend basis construction status Jul-Sep 2013 to Jul-Sep 2016 VOL6, ISSUE 2; JUL-SEP, FY 2016-17 09 propindex.magicbricks.com CHENNAI

The graph shows the trend in the prices Under Construction properties it was The prices of UC properties has steadily of Ready-to-Move-in properties (RM) Rs 6,838 per sq ft increased over the last 11 quarters and Under Construction (UC) properties. While average price of RM properties The graph below shows price trend in the Analysis across 41 localities in Chennai increased marginally by 0.1% over the top 10 localities of Chennai by consumer shows that on an average, UC properties last quarter, UC property prices moved up preference. Key localities in terms of price were 14% more expensive than RM by a significant 1.3% increase were Tambaram, Porur, Adyar properties in this quarter and Anna Nagar, where both UC and RM In terms of overall price increase, UC The average difference in prices has prices increased significantly. Velachery properties posted a price increment of widened by 100 basis points from the was the only locality which witnessed 26% over the last three years, starting Apr-Jun 2016 level. While the weighted significant price decline for both UC and Sep 2013, while RM property prices average price of Ready-to-Move-in RM properties increased by just 2% in the same period. properties was Rs 5,873 per sq ft, for

Price change basis construction status Top localities by consumer preference in Jul-Sep period CHENNAI propindex.magicbricks.com 10 VOL6, ISSUE 2; JUL-SEP, FY 2016-17

Capital values LOCALITY CAPITAL RENTAL YIELD

Adyar 8347-14239 20000-30000 2.6% Alwarpet 11513-20116 22000-38000 2.4% Ambattur 3545-5627 9000-14000 3.00% Anna Nagar 7954-12537 17000-27000 2.5% Chromepet 3750-5756 9000-14000 3.00% Egmore 12464-17786 27000-44000 2.6% Guduvancheri 2746-3838 6000-10000 2.9% Iyyappanthangal 3486-4789 8000-12000 3.00% Keelkattalai 4245-5692 10000-13000 3.00% Kelambakkam 3159-4298 8000-13000 3.3% Kilpauk 8613-14102 18000-29000 2.5% Kodambakkam 6476-11549 15000-22000 2.6% Kolathur 4129-6092 9000-15000 2.9% Korattur 5064-7828 12000-20000 3.00% Kovilambakkam 3889-5151 9000-14000 3.1% Madipakkam 4134-6334 9000-14000 2.8% Manapakkam 4488-6269 12000-18000 3.5% Medavakkam 3695-5392 9000-14000 3.00% Mogappair 4964-7302 11000-16000 2.7% Mogappair West 4965-7094 11000-16000 2.5% Mylapore 11621-19850 23000-36000 2.5% Navalur 3855-5645 11000-20000 3.9% Nungambakkam 11156-20312 20000-32000 1.9% OMR 3380-5767 10000-18000 3.7% Padur 3529-5021 10000-15000 3.6% Pallavaram 3955-5393 10000-15000 3.4% Pallikaranai 4074-5714 9000-13000 2.8% Pammal 3358-4901 8000-12000 3.00% Perambur 4774-6839 11000-16000 2.8% Perumbakkam 3415-4983 9000-14000 3.5% Perungalathur 3402-4990 9000-13000 3.3% Perungudi 4588-7365 13000-20000 3.3% Porur 4910-7401 13000-21000 3.4% Saligramam 5746-9005 12000-20000 2.7% Selaiyur 3763-5313 9000-14000 3.00% Sembakkam 3850-5226 9000-13000 3.1% Sholinganallur 4099-6359 11000-18000 3.3% Siruseri 3145-4789 8000-13000 3.1% T Nagar 8355-13912 18000-27000 2.7% Tambaram 3332-5540 8000-14000 3.00% Tambaram East 3586-5215 10000-15000 3.1% Tambaram West 3370-5362 7000-11000 2.9% Thiruvanmiyur 7532-12153 18000-27000 2.7% Thoraipakkam 4844-7426 13000-21000 3.2% Urapakkam 2878-4065 7000-10000 2.9% Vadapalani 5891-9682 15000-24000 3.1% Valasaravakkam 5241-7734 11000-17000 2.6% Velachery 5551-8835 14000-22000 2.9% Virugambakkam 5417-8176 14000-21000 2.8%

CHROMEPET - TAMBARAM

Corridor Description and Rating Areas Included: Chromepet, Tambaram, Velachery, Pallavaram, Medavakkam, Madipakkam, Pallikaranai, Nanganallur, Nanmangalam and Selaiyur

Fig 1: Map of the corridor 13 Corridor of growth (COG)

About the Corridor hromepet-Tambaram is a preferred once the new bridge is constructed over the The corridor is mostly preferred by end users residential locality situated south of Buckingham Canal. Most of the people looking to buy property in Chennai in and around the GST Road. A Central Chennai find this corridor affordable C The Chennai Beach-Tambaram Suburban Line very well connected and developed corridor as prices are low and also because it is a well- passes through this corridor. The trains run at with good social infrastructure which has developed corridor with good water supply a frequency of one in every 10 minutes while made it the most sought-after residential compared to other corridors. The supply of from Tambaram to Chengalpet the trains run corridor even though there are not many office property is predominantly in the range of Rs at a frequency of 30 minutes interval. spaces here. With the growth of key localities 40-80 lakh with almost 52% in this category. such as Velachery as the most sought after Most of the outstation inland trains running The corridor has a good supply of 2BHK units retail destination, the area has evinced interest towards South Tamil Nadu and Kerala also pass with almost 71% supply. from investors and end users from Central through this station. The corridor has more low lying areas wherein Chennai as property prices are much more a part of the corridor is along the valley affordable here. The domestic and international terminals of the Chennai International Airport at zone of the Palar River. Large parts of the This is the most well connected corridor in Meenambakkam are in this corridor and about corridor are beside the Pallikarnai Marshland, Chennai as it is very close to Central Chennai. 4-km from Chromepet. which is a large area of wet wasteland and The Chennai Byepass Road at Perungalathur the Cherambakkam fresh water lake. This connects it to highways leading from Chennai The corridor is equally well connected with causes flooding and water logging during to Bengaluru (NH-4), Chennai to Tirupati (NH- MTC and TNSTC buses, making this well the monsoon season and has prompted 71) and Chennai to Kolkatta (NH-5). The Outer connected through all modes of transport. some residents to move to higher areas such Ring Road (ORR) connects the GST to NH-205, Velachery in this corridor is the most sought- as the GST Corridor. This was evident during NH-4, NH-5 and to Minjur. It also connects after retail hub of South Chennai with most the floods of 2015, when the Tambaram- to the OMR and ECR through the 200-feet of apparel and jewellery shops having their Chromepet area was cut off from the rest of Pallavaram-Thuraipakkam Ring Road. The branches here. Chennai for almost three days. road is proposed to reach ECR at Neelankarai

Overall Connectivity Social Infrastructure Security/Water

Properties available in the corridor he corridor offers a wide range of of Rs 20-40 lakh and the rest above Rs 60 looking to live close to Central Chennai at properties in all price segments from lakh. Fig 4 shows that about 71% properties prices that are affordable. It is also observed Taffordable to luxury. Over 40% properties are 2BHK units and 22% are 3BHK units. The that almost 60% of the property available in fall in the category of Rs 40-60 lakh followed supply is mostly targeting the middle class and the corridor is the ready-to-move-in category. by around 37% in the affordable segment upper middle class families who are typically Only about 3% of the entire supply in the

Fig 2: Distribution of properties by price Fig 3: Distribution of properties by delivery status Fig 4: Distribution of properties by bedroom configuration 14 Corridor of growth (COG)

Table 1: Sizes and prices of flats available for locality is priced above Rs 1.20 crore which ranging from affordable to luxury apartments various room configurations shows that there is not much demand for with sizes of more than 1600 sq ft for 2 and Sales Price Covered Area ultra-luxury projects. 3BHK segments. There are many plot projects ( Lacs) (Sq.ft) by developers with world-class amenities in The corridor offers properties in all price 1 BHK 18-136 500-1493 the price range of Rs 1.2 – 5.5 crore. Mid to segments wherein property is more affordable large size plots closer to OMR on the east and 2 BHK 21-200 520-1922 in Selaiyur and the neighbouring locations but towards Perungalathur and West Tambaram 3 BHK 25-400 620-4000 Velachery, Medavakkam and others are priced on the west are more preferred by investors. 4BHK and Above 65-650 1400-4600 high. There is a wide variety of sizes available Best sectors to invest in a home Based on rental demand in sectors

Fig 5: Top localities by consumer for renting a house ental demand is also fairly constant healthy demand in all localities that are close localities in the sector is fairly constant at 3%. in most localities of the corridor but is to GST and the Pallavarm-Thuraipakkam Link Pallavaram has a slightly high rental yield as Rslightly higher at Pallikarnai as there are Road. Rental yield shows the amount of rent there is good demand for property after the mostly independent homes which slightly that can be generated from a property in a Pallavaram-Thuraipakkam Link Road was reduce the supply. It is seen that there is year in terms of sale price. Rental yield in most opened up. Based on home buying demand in sectors

Fig 6: Top 10 localities by consumer for buying a house 15 Corridor of growth (COG)

n the case of demand for home buying, established residential area with good the range of Rs 4,500 per sq ft as compared Medadvakkam has the highest share. social infrastructure. As property prices are to Rs 8,000 per sq ft and above at Velachery. IThis is mainly due to its connectivity and high in Velachery, people prefer to buy in Chromepet which is the center of the corridor proximity to Velachery, which is a well- Medavakkam where the average prices are in has the next highest demand.

Best bedroom configurations to buy Preferred buying and renting options

Table 2: Demand distribution for buying and renting t is observed from the given tables that have more of 2BHK properties and consumers Buying Renting either for rent or buy, the number of 2BHK are also showing immense interests in the Total (BHKs) Total (BHKs) Iapartments are highest with around 60% 2BHK category. The areas such as Medavakkam 1 BHK 8% 12% of the total demand in buying and 63% of the and Velcahery have independent homes and 2 BHK 60% 63% total demand in rentals concentrated for the builder floor apartments with 2 and 3BHK 2BHK format. The second most preferred is the units. There is less distribution of demand for 3 BHK 31% 1% 3BHK category in the corridor. This means that 1 BHK and 4 BHK units in the corridor. 4 and Above 1% 23% the localities in and around Nanmangalam Price changes and future prospects Historic Price movement Corridor Average Price Rs/sqft Table 3: Historical Price changes

6 monthly change Yearly change -1% 0% hromepet-Tambaram corridor has seen that property prices have remained Cstagnant over the last one year. Also due to the impending elections in Tamil Nadu in the month of May 2016, there had been low interest levels among investors as well. Although average prices went up slightly during the January month close to the festive season of Sankranthi and breached the Rs.5000 per sqft mark, it has been only a marginal increase which is less than 1%. Residents of the corridor had a difficult time during the flooding of December 2015 and this has also affected end user interest in the locality. It has been seen that the demand was highest at areas closer to the GST road. Lower lying areas such as Tambaram, Chromepet and Velachery have seen a marked reduction in Fig 7: Historical Price changes of corridor property prices and consumer demand. 16 Corridor of growth (COG)

Price movement for top localities by Consumer Preference rices have not appreciated in this corridor over the last one year. Most of the localities have seen a reduction Pin the average prices due to subdued demand. Also since the corridor has mostly builder floor apartments, the developers are ready to offer discounts to offload inventories at the earliest. All the localities in the corridor have seen that average prices have reduced and areas such as Chromepet and Tambaram have seen that prices have gone down by 3-5%. Only Pallikarnai has registered a marginal increase but this does not affect the overall pricing in the corridor.

Fig 8: Price changes in top localities by consumer demand

Master Plan

s per the Comprehensive Development Plan released by ACMDA for Land Use for the year 2026, the corridor has a good mix of residential and institutional land. Tambaram also has a large land area earmarked as non-urban area near Tirusailam. This area will present good opportunity if there is a decision to make it urbanisable and add more land to the residential realty sector. Vangalvasal, Fig 9: Land use of various localities in the corridor Madambakkam and Pallikarnai areas have a portion of land earmarked for reserved forest that will provide some green cover to this corridor. 17 Corridor of growth (COG)

Infrastructure Updates l The corridor is now connected through the During our site visit it was observed off for almost three days. Although there is Chennai Metro which ends at Alandur. Work that the corridor is currently having some work happening with the de-silting is in progress to connect the current metro good demand as it has the best social of the drains, canals and river beds in some line from Koyambedu to the airport. Once infrastructure. There is some concern that areas much has to be done to allay the fears completed it will increase connectivity to not much is being done by the government among the residents that the 2015 floods the corridor regarding the drainage and storm water will not be repeated again. management even after the flooding The area still sees a strong demand from l The government has proposed to construct of 2015. three elevated roads to decongest long the retail sector which has seen a steady distance travels. The proposed elevated This was one of the worst affected areas inflow of new outlets in and around the roads are: during the floods and Tambaram was cut Velachery region. IN NEWS The rise of Tambaram realestate market and its arterial lifeline the Pallavaram-Thoraipakkam 200-feet radial road. The link road connects the IT corridor to GST road and hence Though Tambaram started developing late in comparison to immediately connects the two prime areas of Chennai. There are Chrompet, its infrastructure has improved in the last few years and is already several swanky residential complexes springing up in this now at par with its neighbour. The area has many places of interests area and home buyers are also preferring to stay here. such as super markets, banks and schools along with IT companies. It is situated about 27 km from the centre of the city. It is home to one n Source: The Times of India of the busiest railway terminals of the Chennai Suburban Railway What makes Tambaram a popular area in Chennai? Network. It is very popular among IT professionals, Non Residential Indians (NRI) and High Net worth Individuals (HNIs). The locality is The biggest turnaround for Tambaram has been due to the attracting home buyers due to its connectivity factor. continuous development of its civic infrastructure. The Tambaram Municipal Corporation has several new initiatives that are not only n Source: Magicbricks Bureau making the locality better. Despite being one of the oldest localities Adyar, Velachery are top investment hotspots in Chennai, Tambaram is one of the top ten preferred locations to buy a home in Chennai for close to a year now. This demand has led to a The overall real estate market of Chennai has remained sluggish for consistent appreciation in property prices. The area has good solid quite some time now, making it difficult for investors to earn profit waste management programme and the residential development is in the city. Situated amidst Besant Nagar and IIT Chennai, Adyar is picking up in this locality. one of the developed localities of South Chennai. The area has been hit by the redevelopment drive happening in the central localities of n Source: Magicbricks Bureau Chennai. Adyar is the starting point of Rajiv Gandhi IT Expressway and Why first time buyers can prefer Nanmangalam falls close to the Tidel Park where several big and small IT companies have set base. Another South Chennai’s locality, Velachery also The locality provides all amenities required for a congenial witnessed rise in property prices and considered as a hot investment livelihood such as schools, colleges, hospitals, shopping complexes, destination. petrol pump and MTC bus connectivity. It is in proximity to IT corridor and Velachery situated within 7-9 km, which is an added n Source: Magicbricks Bureau advantage. Tambaram and Chrompet are the neighbouring areas of Pallavaram: An ideal realty hub Nanmangalam situated at the distance of 9 km. The area has easy accessibility to Old Mahabalipuram Road and Grand Southern Trunk When people look out for property in Chennai, the stretch along Rajiv Road. The housing options available in the area include apartments, Gandhi Salai on Old Mahabalipu ram Road (OMR) has become much builder floor apartments, residential houses and plots. sought after by the new generation buyers. However, in recent years, investors have begun focusing on the developments in Pallavaram n Source: Magicbricks Bureau GRAND SOUTH TRUNK ROAD (GST)

Corridor Description and Rating Areas Included: Perungalathur, Mahindra World City, Guduvancheri, Madambakkam, Urapakkam, Kelambakkam, Maraimalai Nagar, Singaperumal Koil, Old Perungalathur and Chengalpet

Fig 1: Map of the corridor 19 Corridor of growth (COG)

About the Corridor rand South Trunk Road is the NH-45 that SEZ are some of the other SEZs set-up and The Chennai suburban train runs the South runs from Chennai to Theni in South operational in this corridor, where major IT line from St Thomas Mount to Chengalpet, GTamil Nadu. Popularly known as GST companies have set-up their delivery centres. parallel to GST. Some of the trains also run it is a linear growth corridor. Although the until Kanchipuram, thus providing a very Also, unlike the OMR Corridor, this corridor road is 472-km in length, it has been split robust and cheaper travel alternative to people has a good mix of IT and manufacturing into two corridors - the GST Corridor and the residing in this corridor. companies. Chromepet-Tambaram Corridor. The GST Corridor has maintained a good Ford India’s manufacturing plant at the The GST Corridor in consideration extends from demand for different configuration of Maraimalai Nagar Industrial Area, educational Perangalathur to Mahindra World City. The properties. institutes such as SRM University and road alternates between 4-lane and 6-lane proximity to Sriperumbudur and Orgadam are The area has a good mix of affordable and is one of the busiest roads in Tamil Nadu. all demand drivers for the GST Corridor. apartments in multi-storey buildings and There are residential and commercial plotted developments. Due to the availability The corridor is well connected to the rest of establishments on both sides of the road and of large open tracts of land there are a lot of Chennai as GST passes through Guindy and there is emphasis on SEZs in this corridor with affordable plots developed in this corridor and connects to Central Chennai. almost five of them already set-up and a few there is good investor demand for these. more are in the process of getting approvals. The Chennai ORR connects GST at Vandalur to The corridor has a few shopping destinations Mahindra World City at the south end of NH-4, NH5, NH205and Minjur. Thus it provides and about two malls. The social infrastructure the corridor in Chengalpet is a 1550-acre an alternate road to connect GST to other is developing but has been slow and not kept integrated township and has many IT/ITES highways entering Chennai so that the city pace with the residential projects coming up in companies operating from there with Infosys traffic can be avoided. this corridor and this has slowed new people having set-up its largest development centre moving here. here. MEPZ which is the oldest SEZ in Chennai, The Chennai Bypass Road is a 32-km long road Shriram’s Gateway SEZ, Estancia SEZ and ETL that can be used by traffic wanting to shift across NH-45 (GST) to NH-4 NH-5 and NH-205.

Overall Connectivity Social Infrastructure Security/Water

Properties available in the corridor he corridor offers a wide range of 20-40 lakh followed by around 21% in the Rs 74% properties are 2BHK units and 17% are properties from ultra-affordable plots 40- 60 lakh segments. ig 3 shows that almost 3BHK units. Since the corridor mainly caters Tto affordable apartments in all price 70% of the homes in the corridor are ready to the affordable segment, almost 82% of the segments from affordable to ultra-luxury. for possession, which means that currently, property in the corridor comprises of 1 and Over 70% properties fall in the category of Rs this is a buyer’s market. Fig 4 shows that 2BHK units.

Fig 2: Distribution of properties by price Fig 3: Distribution of properties by delivery status Fig 4: Distribution of properties by bedroom configuration 20 Corridor of growth (COG)

Table 1: Sizes and prices of flats available for GST Corridor offers properties in different price unlike the OMR Corridor where the demand various room configurations segments where areas such as Perangalathur is mostly from people working in the IT/ITES Sales Price Covered Area and Urapakkam have high prices and as one segment, here the demand is from people ( Lacs) (Sq.ft) proceeds towards Chengalpet prices reduce. working in both IT/ITES and manufacturing 1 BHK 10-30 500-850 segments and hence, the preference is for It is also seen that there are very few units that homes that are in the affordable and ultra- 2 BHK 11-90 518-1440 are more than 3BHK and most of the larger affordable segments. 3 BHK 30-110 920-1956 units available for sale are mostly independent 4BHK and Above 62-200 1185-2580 houses. This is mainly due to the fact that Best sectors to invest in a home Based on rental demand in sectors

Fig 5: Top 10 localities by consumer for renting a house ithin the corridor, the locality areas such as Guduvanchery and Vandalur. The The rental yield in the corridor is between with the highest rental demand is area with the highest rent is in the integrated 2-6% with Madambakkam giving the highest WUrapakkam. The locality is very close township of Mahindra World City as it offers yield at 6% as it is closer to the Tambaram to the Vandalur-Kelambakkam Link Road good accommodation for employees working Corridor, which has better social infrastructure connecting GST to OMR, as well as it is close to in the IT/ITES companies within the campus. than other areas in the GST Corridor. Based on home buying demand in sectors

Fig 6: Top 10 localities by consumer for buying a house 21 Corridor of growth (COG)

n the case of demand for home buying, Ford Plant on GST Road. The area has a healthy other localities. Urapakkam, located next to Guduvancheri has the highest share. This rental yield of about 4%. It is observed that Guduvancheri, has the next highest demand Iis due to its proximity to SRM University, there are more number of ready-to-move-in in the corridor owing to the same reasons as Estancia IT Park and about 10-km from the apartments in Guduvancheri in comparison to Guduvancheri.

Best bedroom configurations to buy Preferred buying and renting options

Table 2: Demand distribution for buying and renting t is observed from the given tables that (PG) accommodation. These fetch good ROI as Buying Renting either for rent or buy, the number of 2BHK compared to conventional rental options and Total (BHKs) Total (BHKs) Iapartments are highest with around 70% of also have good demand from all the IT/ITES 1 BHK 11% 11% the total demand for buying and about 56% people working in the many SEZs and IT Parks 2 BHK 70% 56% of the total demand for renting. It is also seen on this corridor. Many people who own land that there is a good demand for independent here are constructing 4BHK and above houses 3 BHK 18% 2% houses with more bedrooms for renting as and handing it to people who operate PG 4 and Above 1% 32% these are usually converted to Paying Guest accommodation. Price changes and future prospects

Historic Price movement Corridor Average Price Rs/sqft Table 3: Historical Price changes

6 monthly change Yearly change -5% -2% s per the table, it is seen that the property prices have been fluctuating Aon this corridor over the last one year. Although prices have increased as compared to the last year’s prices, it is still less compared to the price before six months. Although prices were on the rise during the 3rd quarter of 2015, it did not sustain and has fallen by almost 5%. With no much change in the governance after the elections, the same investor mentality should continue and prices should be able to recuperate. It is also observed that most of the demand was from end users who preferred areas closer to the city rather than on the outskirts and this in turn has led to more demand and hence a rise of property prices as one moves towards the city near Tambaram as these areas have Fig 7: Historical Price changes of corridor better social infrastructure compared to other localities on GST. 22 Corridor of growth (COG)

Price movement for top localities by Consumer Preference t has been observed from Fig8 that a plot of price change over the last quarter shows clearly that prices have dropped in most localities of Ithe corridor. Although there has been a constant demand for the GST corridor, most of the developers of multi-storey apartments have tried to clear inventory by reducing prices. The trend also shows that prices have appreciated the highest, almost by 4% at Madambakkam. This could be due to the start of operations of many companies at the Estancia IT park which is very close to Madambakkam and also the plans for setting up a satellite bus stop at Guduvancherry. Perangalathur also witnessed marginal price rise in the corridor.

Fig 8: Price changes in top localities by consumer demand

Master Plan

Fig 9: Land use of various localities in the corridor

he entire corridor is spread in the district bodies and this is a cause of concern as this Regional Development Authority) but this is of Kanchipuram across the Panchayat usually leads to unplanned development and at a very initial stage and not much progress Tof Perungalathur and Kattankulathur unregulated growth. is seen. There is a vast area of reserved forest and the Taluks of Chengalpet and Tambaram. earmarked in the Chengalpet area that Although there are talks to include the entire Developments in these localities are currently provides a big green cover to areas surrounding Kanchipuram district into the CRDA (Chennai approved by the local panchayat and DTCP the Mahindra World City. 23 Corridor of growth (COG)

Infrastructure Updates l Currently a feasibility study is being During our visit to the corridor we noticed that will ensure that vehicles moving towards carried out for an ORR passing through GST is a very busy road right from Guindy area, Tambaram reach the ORR and then bypass Singaperumal Koil in this corridor. This where it is a 6-lane highway all the way to Chennai city, taking a diversion and reaching road will connect the EnnorePort to Chengalpet. Sriperumbudur, Chennai-Bengaluru Highway Mahabalipuram and pass through ECR, GST, etc without adding to the traffic on GST. There are many critical junctions on the road Chennai-Bengaluru Highway, Chennai- which are important bus stops as well, where The area has also been a favourite investment Tiruvallur Highway and the (Grand North traffic comes to a standstill especially on destination for most people living in Chennai Trunk) GNT Road weekends when a lot of people are going back who are looking at a long term investment l There is also a proposed extension for to their hometowns in southern Tamil Nadu. perspective of 5-6 years when GST will have all the current trains which run between There is no parallel road to GST and that has social infrastructure and fetch good returns on Chennai Beach-Tambaram all the way until been the reason for most of the traffic blocks. their investments. Chengalpet A ring road running from Singaperumal Koil

IN NEWS Potheri is a rising rental hub along GST Road 4 reasons to invest in Chennai’s Perungalathur Highly driven by students and working professionals, Potheri is a Perungalathur is the southern gateway to the city and is in proximity rising rental hub along the GST Road. With the development in the to the Outer Ring Road (ORR) that offers connectivity to North real estate space, this has helped in the growth of several small and Chennai. Industrial estates such as Guindy, Maraimalai Nagar, medium-sized businesses in the area. Potheri has seen a sudden surge Paddapai, Oragadam and Sriperumbudur are easily accessible via in residential developments in the last few years. The area is situated road or rail. Residents of adjoining areas such as Peerkankaranai, about 2.5 kilometer from Guduvanchery and is close to many colleges Sadanandhapuram, Old Perungalathur and RMK Nagar avail transport and industries. Potheri is also well connected to the main city through facilities from Perungalathur. The locality is part of the Phase 1 local trains. Also buses from Tambaram heading towards Maraimalai of the Chennai Monorail network. Apart from this, the Highways Nagar and Chengalpet pass by this place. The locality is witnessing Department and the Southern Railway will construct a road over- potential investors’ interests. bridge and a pedestrian subway to replace two level crossings near the Perungalathur Railway Station. n Source: Magicbricks Bureau n Source: Magicbricks Bureau Perungalathur - The southern gateway GST Road - A prime destination Perungalathur gives us various reasons to invest. Located on the southern gateway to the city, it is in proximity to the Outer Ring Road GST Road, in many ways, is the city’s lifeline. Not only is it the gateway (ORR) that offers connectivity to North Chennai and National Highway to the city, linking it with many important places, it is also gaining 24. It has good connectivity with Chengalpattu and Kanchipuram. The ground as an important investment option, as far as residential real Perungalathur railway station is about 30 km from Chennai Central. It estate is concerned. Maraimalainagar located along GST Road is 40 is near the Tambaram railway junction. Southern Railway is currently kilometer away from the city, has been on the development radar renovating and expanding, including extension of platforms. The for quite some time now, both in terms of residential and industrial Perungalathur Lake is located behind the Vedanta Desika Srinivasa growth. Orangadam and Outer Ring Road in GST Road are some Perumal Temple. Presence of good schools, banks and medical facilities of the prominent localities that offer wide property options to the cater to the need of the residents. consumers. n Source: Magicbricks Bureau n Source: The Times of India RAJIV GANDHI IT EXPRESSWAY (OMR)

Corridor Description and Rating Areas Included: Thuraipakkam, Taramani, Semmancherri, Siruseri, Thalambur, Navalur, Kelambakkam, Thiruporur, Padur, Perumbakkam, Perungudi, Sholinganallur, Okkiyam-Thuraipakkam

Fig 1: Map of the corridor 25 Corridor of growth (COG)

About the Corridor he Rajiv Gandhi IT Expressway – better Adyar and all the way till Pre-Toll, the one with connects at Panaiyur. Finally, the Vandalur- known as Old Mahabalipuram Road highest demand as this part is close to Central Kelambakkam Road provides another T(OMR) - is an IT corridor developed by Chennai and Velachery which have good social connection between GST and OMR. the Government of Tamil Nadu under the infrastructure. The toll area and the road until Since the OMR is the only main road ITEL-IT Expressway Ltd which is responsible Sholinganallur Intersection has the highest connecting all the localities in the corridor, it for implementation and maintenance of the concentration of office spaces and hence, good is generally crowded during peak hours and corridor. Although the corridor was initially demand for rental residential spaces. The last long traffic jams before the toll are a common planned for IT/ITES companies only, a number part of the corridor is less populated with sight. A metro train line running parallel to the of residential complexes have come up. The large tracts of empty spaces. The demand in OMR will reduce traffic here. A detailed project 45-km long corridor stretches all the way this region is low due to which property from report is being prepared to propose a metro upto Mahabalipuram with a new 1500 acre prominent developers is available at a very from Madhavaram to Siruseri. Although this Japanese Township being setup there. lower prices. line will not be running parallel to the OMR, Apart from residential and office spaces, the In terms of connectivity, currently, the OMR, it will reduce travel time between the SIPCOT corridor also has large hospitals, residential a 6-lane highway is connected to the rest of SEZ in Siruseri to the Chennai CBD. schools and shopping establishments coming Chennai through the Madhya Kailash in Adyar. The corridor is preferred for residential purpose up along the OMR. It is well connected to the The 200-ft Pallavaram-Thuraipakkam Road by mid-level employees working in the IT/ ECR, which runs parallel to OMR, and GST with connects the corridor to GST. There are plans ITES segment who prefer 2 or 3BHK units only. four main link roads running across. Since the to extend this road to ECR by building a bridge Luxury and premium projects are generally entire corridor has been promoted and setup over the Buckingham Canal and connect it not so much in demand (5%). The corridor has in the last decade, it has the highest demand at Neelankarai, which will help commuters. almost 57% of the current inventory in stage. among all corridors. The Perumbakkam Main Road connects to This has prompted many developers to slash Medavakkam and the Velachery-Tambaram prices and also offer freebies on purchase in a Property prices have appreciated almost Road connects to GST near Tambaram Railway few projects. 200% since the corridor was setup. This can Station. This road continues to ECR and be divided into three parts: Areas closer to

Overall Connectivity Social Infrastructire Security/Water

Properties available in the corridor he corridor offers a wide range of the Rs 20-40 lakh segments. People buying shows that 57% of properties in this corridor properties in the affordable to premium properties here are in the mid-level positions are in the ready-to-move-in category which Tsegments. Over 37% properties fall in and have their offices here. Fig 4 shows that means that it is a buyer’s market as many the category of Rs 40-60 lakh followed by 50% properties are 2BHK units and 39% are developers would be willing to dispose the around 15% in the Rs 60-80 lakh and 32% in 3BHK units available here. Interestingly, Fig 3 ready-to-move-in inventory at the earliest.

Fig 2: Distribution of properties by price Fig 3: Distribution of properties by delivery status Fig 4: Distribution of properties by bedroom configuration 26 Corridor of growth (COG)

Table 1: Sizes and prices of flats available for As explained prices in the corridor move north on this road is catering to mid and premium various room configurations as one moves towards south of the OMR. So segments, there are a few penthouses and Sales Price Covered Area an investor will get better value for money at ultra luxury apartments which are available ( Lacs) (Sq.ft) areas beyond Siruseri, as prices are affordable. upwards of Rs 4 crore. As one moves south of 1 BHK 14-45 500-1000 So, typically a Rs 40 lakh which will buy a Sholinganallur, it is observed that the floor 2 BHK 18-200 525-2231 1BHK near the start of OMR close to Adyar, will area/built-up area of apartments is typically 3 BHK 30-250 900-2800 be able to buy a 2BHK closer to Sholinganallur. larger and there are 2BHK units with super It is seen that although much of the offering built-up area of 1800 sq ft. 4BHK and Above 75-560 1600-6700 Best sectors to invest in a home Based on rental demand in sectors

Fig 5: Top localities by consumer for renting a house ithin the corridor, the locality and two SEZs. Rental yield shows the localities, ranging from 3-6%. From the graph with the highest rental demand amount of rent that can be generated from a it is evident that properties at Sholinganallur, Wis Sholinganallur. This has good property in a year in terms of sale price. The that has good connectivity to Medavakkam as demand as it is very close to two big colleges OMR Corridor has high rental yields at some well as to the ECR, offers highest rental yield. Based on home buying demand in sectors

Fig 6: Top 10 localities by consumer for buying a house 27 Corridor of growth (COG)

n the case of demand for buying homes, 2BHK properties here fetch good rental returns has good social infrastructure and hospitals. Sholinganallur has the highest share. and have limited availability in the corridor. Perumbakkam has good water supply IThis is mainly due to its connectivity to Perumbakkam, located next to Sholinganallur, compared to other localities in the corridor as Medavakkam and ECR. It is also observed that has the next highest demand as the locality it has a 200 acre fresh water lake located here.

Best bedroom configurations to buy Preferred buying and renting options

Table 2: Demand distribution for buying and renting t is observed from the given tables that 1% of the people are looking to rent out 3BHK Buying Renting either for rent or sale, the number of 2BHK units. Interestingly, although only 2% of the Total (BHKs) Total (BHKs) Iapartments are the most preferred. About people are looking at buying 4BHK and higher 1 BHK 8% 8% 55% of the people looking to buy and 63% units, about 29% of the people looking at 2 BHK 55% 63% of the people looking to rent are considering rental properties are considering this category. 2BHK units. It is also observed that most of the The property options available in this corridor 3 BHK 35% 1% 3BHK apartments that are purchased in the are for all types of property but the demand is 4 and Above 2% 29% corridor are mostly for self-occupation as only overall for 2-3 BHK. Price changes and future prospects Historic Price movement Corridor Average Price Rs/sqft Table 3: Historical Price changes

6 monthly change Yearly change 1% 0% ajiv Gandhi IT Expressway corridor has seen that apart from a slide of prices Rfrom the Q4-2014 levels, prices have remained largely stagnant over the last one year throughout the corridor. Prices dipped to an all-time low in the 2nd quarter of 2015 but has risen since then and reached back to Q1-2015 levels. Demand has been steady in this corridor and is mainly from the employees working in the IT/ ITES companies in this corridor who are keener to purchase 2-3 BHKs in the mid segment price range. Prices have also been lower in areas that were highly affected due to the floods of December 2015.

Fig 7: Historical Price changes of corridor 28 Corridor of growth (COG)

Price movement for top localities by Consumer Preference he last quarter has witnessed the prices moving up for four out of the top five localities by consumer demand. Areas such as Kelambakkam, TNavalur, Sholinganallur and Padur have seen about 2-5% increase in prices over the last quarter. The demand in all these areas is due to the employees working in the IT/ ITES companies in these localities who are looking at 2 BHKs in the mid segment price range. Lower lying areas such as Perumbakkam have seen reduction in prices by 1% as buyers fear that the area may be prone to water logging during the monsoon season.

Fig 8: Price changes in top localities by consumer demand

Master Plan

t is observed that large tracts of OMR are designated for the pupose of High Tech development which includes Ispaces for IT/ITES industry. Vast localities in the corridor are also designated green areas and semi-water bodies such as the Pallikarnai marshland have all been marked as Green areas in the corridor. Although the corridor stretches till Mahabalipuram, but in its current state residential complexes Fig 9: Land use of various localities in the corridor start reducing after Kelambakkam and post Thiruporur the road becomes a 2-lane highway to Mahabalipuram. 29 Corridor of growth (COG)

Infrastructure Updates l One Hub at Chennai which is a 1500 l A detailed project report (DPR) is being infrastructure. The flooding in December 2015 acre Japanese Township setup in carried out currently to setup a new metro has prompted a few companies to rethink collaboration with Ascendas, a Singapore- line between Madhavarm-Siruseri which their expansion plans in this corridor and based industrial and commercial space is a 41-km long proposed metro line to are looking at GST as a more secure location. developer; Ireo, a real estate developer; connect Red Hills residential area within Water, sanitation and better connectivity have JGC Corporation, a Japanese engineering the OMR been the top prioity for most of the builders company; and, Mizuho Bank, Japan, will in this location. Hopes are also pinned on the A recent visit to the corridor has revealed that also have residential areas earmarked. 1500 acre Japanese Township coming up in there is a lot of activity happening in terms Once this area will be developed and more Mahabalipuram and that the realty market of residential and commercial spaces coming clients setup their plants in the township, will see some upward movement when more up. But there is a slight insecurity among the southern parts of OMR will see rise in clients start moving to One Hub and when the consumers regarding the current state of demand proposed 100 acre residential project kicks off. IN NEWS Thoraipakkam emerges as a real estate hotspot Siruseri, is just 4 km from Navallur, while the ELCOT SEZ located in Sholinganallur is situated 10 km from the area. The area has good Okkiyam Thoraipakkam is emerging as an attractive location for properties for home finders looking for rent. property buyers. The area is connected to Chennai’s very first six-lane IT Expressway on the OMR is the new address for most of the IT n Source: Magicbricks Bureau global giants and has gained significant importance in the real estate Know Chennai’s fast emerging hotspot for investment market. Located very close to the Pallikaranai marsh, Thoraipakkam is spread across a stretch of three kilometers, starting from Perungudi. The development of social and physical infrastructure has transformed This area has seen substantial growth in the last 10 years. The area is Velacherry into one of the most sought after areas for realty growing fast and there is an immense opportunity for home buyers in investment. The area is in the close proximity to the IT corridor, this locality. established social and physical infrastructure and civic amenities makes the area popular. Velachery in South Chennai dominates n Source: The Times of India the property buyer’s preference for all property types and budget Velachery considered being the most preferred locality segments. The area has good railway connect and flyovers providing road connectivity. Velachery is located in South Chennai and is close to IIT Madras. There are multiple factors due to which the area soars high on popularity. n Source: Magicbricks Bureau Velachery is a very good location to live as it is well-connected Know the affordable, premium rental markets in Chennai to all significant parts of the city such as Pallavaram, Tambaram, Thiruvamyur, Madipakkam, Guindy, Medavakkam and Thoraipakkam. The rental market of Chennai seems to be faring better than the Velachery has evolved as one of the well-developed residential capital market. Which means, if you have a property leased out then localities of Chennai offering everything a buyer wants. Right from the monthly returns have increased over the course of time. The high-end commercial set-ups, to proximity to IT hubs, retail stores, localities such as Old Mahabalipuram Road (OMR), Kelambakkam and and residential homes is exactly what the area is offering. Thoraipakkam are the most affordable places to stay on rent. Renting in the premium localities as mentioned can be a tad bit expensive. So n Source: Magicbricks Bureau instead it is advisable to consider investing. Local bus transport gives Navalur offers highest rental returns way to smooth accessibility. Shared autos are also a popular transport facility and reduces the cost . The capital values of properties in these Much of the demand both for renting and buying apartments comes localities are higher and it makes sense for people to opt for rental from the IT professionals. SIPCOT IT Park, the largest Information housing units more than buying properties at this point in time. All Technology Park in Asia, located in Padur, Siruseri, is just 4 km from three localities have a developed social and physical infrastructure. It Navallur, while the ELCOT SEZ located in Sholinganallur is situated has closeness to the IT corridor, City centre, schools, hospitals, parks 10 km from the area. Much of the demand both for renting and and markets. buying apartments comes from the IT professionals. SIPCOT IT Park, the largest Information Technology Park in Asia, located in Padur, n Source: Magicbricks Bureau

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