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CHENNAI RESIDENTIAL MARKET UPDATE JULY - SEPTEMBER 2020

Market Sentiment WHAT’S INSIDE?

• Impact of COVID-19 on Indian Real Estate • National Outlook Snapshot of real estate ambience across top 8 metro cities • Market Movers News that impacted ’s realty market in Jul-Sep 2020 • Commercial real estate outlook • Residential demand and supply dynamics • 99acres’ Outlook Our perspective on the current market sentiment • Key trends in the buying and renting landscape • Price trends across key micro-markets

FROM CBO’S DESK

The Jul-Sep 2020 quarter set the pace for the recovery of Indian developers have further fueled the penchant for ready or near-ready residential real estate market. Post an initial lull in sales and new housing units. There seems to be a newfound demand for independent launches in the previous quarter, the current quarter came as a breather houses and builder floors, which offer increased privacy and scope for as sales resurged by almost 2.5 times of the pre-COVID levels. Both Delhi social distancing, as opposed to residential apartments. NCR and Mumbai saw a significant improvement in transactions, QoQ, as end-users flocked to leverage the lucrative deals floating in the market. A gradual improvement in the realty market was also evident from the Price correction, unlike anticipated, remained a far cry; however, with owner listings posted on 99acres, which went up by seven percent against a negotiation window of up to 10-15 percent, the deals closed in at a the pre-COVID times. Buyer responses also reported a 30 percent surge in reduced price of 2-5 percent of the pre-COVID levels. the same time period.

New launches went up, QoQ, but remained lower than the previous year. On the policy framework front, a fiscal stimulus of Rs 10,000 crore for Majority of the developers focused on completing the ongoing projects, Maneesh Upadhyaya stuck realty projects, along with the sustenance of Repo Rate at four which were stuck during the nationwide lockdown. While work on Chief Business Officer percent, an all-time low, are likely to push the market towards a revival almost all housing projects resumed in the current quarter, a lot of them 99acres.com in the ensuing quarters. The upcoming festive season may see a further continue to face delays spanning quarters. Liquidity constraints with the improvement in the absorption of residential units, across cities. COVID-19 AND REAL ESTATE NATIONAL OUTLOOK

IMPACT ON HOMEBUYERS IMPACT ON INDUSTRY HOME BUYING SENTIMENT PROPERTY PRICES

After an initial set back amid pay cuts Even as supply chain reopened in Home buying sentiment improved The resale segment remained under and job losses, homebuyers were seen Jul-Sep 2020, a ban on Chinese imports as public sector banks and private pressure with deals closing at a returning to the market in Jul-Sep 2020. impacted the cost of development in players slashed home loan interest 2-5 percent discounted rate on average. Reduced home loan rates, sweetened the realty landscape. Developers cited rates to a 15-year low. This, along Developers also kept new unit prices deals by developers and more scope of increased expenses, and thus, little with resumption of construction unchanged even as some spoke of negotiations in the resale segment were scope to reduce prices in the primary work, helped take the enquiries up by increased costs amid a ban on Chinese seen as the key drivers. The quarter market. Yet, in a bid to offload the 80 percent of the pre-COVID times. imports. However, initial speculations of continued witnessing the popularity existing inventory, several schemes Developers reported a 50 percent hefty price corrections did not hold true of ready housing units, and improved were introduced in the quarter. recovery in the number of transactions. for either of the segments. demand for independent houses and Digital transformation continued as builder floors in most metro cities. developers took to the online medium RENTAL LANDSCAPE SUPPLY Window shoppers exited and genuine to interact with potential homebuyers Rental market remained in doldrums With an addition of over 31,000 units homebuyers were seen leveraging at various stages of the buying cycle. despite the opening up of the in metro cities, new launches went up the discounts available in the market. Several governmental procedures nationwide lockdown. Tenants avoided by 4.5 times, QoQ. The resale segment, Noticeably, the quarter reported shifted online as organisations adopted moving as the majority of offices too, reported an improvement as renewed interest from the NRI homebuyer to the new normal. The infusion of continued with the work-from-home several property owners returned to community against the backdrop of Rs 10,000 crore to aid the completion model. Resultantly, the rental rates the market after lockdown restrictions depreciating rupee and attractive deals of stuck realty projects was hailed by did not see any movement and offtake were gradually lifted. Unsold inventory in the new home category. the industry. was meek in both residential and stood at 4.40 lakh units at the end of commercial segments. September 2020.

KOLKATA 1% DELHI NCR 3% SHARE OF NEW LAUNCHES AHMEDABAD 16% MUMBAI The quarter witnessed the launch of about 240 new residential projects in top eight metro cities. Despite being 25% severely hit by the Coronavirus pandemic, Mumbai led all cities with a 25 percent share in new and re-launched projects. Pune, Hyderabad, Bangalore and Ahmedabad followed suit with a 16-19 percent share, each. Delhi NCR made a meagre three percent share of the total new launches, with a few projects in Greater Noida, Ghaziabad and Gurgaon. CHENNAI Kolkata and Chennai reported minimal new activity from developers. 1% BANGALORE 17% PUNE 19% Note: The data depicts share of new launches across metro cities in the studied quarter The numbers include re-launched projects HYDERABAD 18% MARKET MOVERS COMMERCIAL REAL ESTATE OUTLOOK Civic body commences Work on Washermenpet- re-laying of 2,600 roads Wimco Nagar Metro • Office space leasing fell to • Increased demand for e-commerce The Greater Chennai Corporation corridor back on track 0.7 million sq ft in Jul-Sep 2020 led to a spike in rentals of from 3.2 million sq ft in warehouses, which jumped by 30 (GCC) commenced re-laying of Delayed by the COVID-19 pandemic, Jul-Sep 2019. percent, YoY, in Jul-Sep 2020. The around 2,600 internal roads in the city, the construction work on the which would cover all 15 zones of average rent of storage spaces went 9 km-long Washermenpet-Wimco • Between April and August 2020, Chennai. Under the first phase of up from Rs 20 per sq ft to Rs 25 sq Nagar Metro corridor in North more than 12.55 lakh sq ft of office the project, around 750 internal ft during Jul-Sep 2020. Chennai has resumed. Expected space in Chennai has been lapped roads covering , to become operational by the end up, predominantly by IT/ITeS • One of the prominent upcoming , , , of 2020, the metro stretch will companies. deals in the warehousing space is , Thiru-Vi-Ka Nagar, connect northern end to the central by Avigna Space, which will develop and Adyar would be revamped. • The Central Government plans to parts of Chennai. Grade-A warehousing capacity build a multi-modal connectivity of two million sq ft in Chennai by hub in Chennai. For this, the December 2021. Government will acquire land parcels at a distance of 20-30 km from the main city. Water supply in Major road stretches to to improve be widened Under Chembarabakkam water supply The State government approved the scheme, Chennai Metropolitan Water proposal to widen Grand Southern Supply and Sewerage Board would Trunk (GST) Road till , and provide a daily water supply of 135 the existing four-lane road from litres per person to around 2.5 lakh Guduvanchery to Paranur. The residents of Pallavaram. The move has road projects would ease traffic significantly impacted home buying movement between the city and the sentiment in the locale. southern region beyond .

acres ’s No.1 Property Portal CHENNAI’S REALTY AT A GLANCE Property Prices Rental Rates Demand Supply

BUDGET-WISE DEMAND AND SUPPLY Key micro-markets across budget segments

Budget Localities based on Average Average Rental Jul-Sep 2020 Range Consumer Demand and Property Prices Rental ‘Asks’ Yield Active Listings (Rs per sq ft) (Rs per sq ft/month)

Within Rs 40 lakh 3,100-3,700 11 3.30% -28% Urapakkam 3,300-3,900 11 3.50%

Rs 40 lakh - Rs 1 crore 3,800-4,500 11 3.10% 4,600-5,818 13 3.19% 20% 4,700-5,700 18 3.67%

Rs 1 crore and above 6,200-7,500 18 2.77% 8% Thoraipakkam 6,400-7,300 18 3.02% Demand 5,700-6,800 15 2.77% 66% 38%0% 22% 42% 12% 20% Supply Note: Rental Yield has been calculated for a 1,000 sq ft apartment. Within Rs 40 lakh Rs 40 lakh - Rs 1 crore Rs 1 crore and above Average property prices and rental rates have been calculated as per listings posted on 99acres.com in the studied quarter. The range of property prices may vary by 10 percent depending on the age and furnishing status of the residential apartments.

BHK-WISE DEMAND AND SUPPLY Key micro-markets across BHK-configurations

Configuration Localities based on Average Average Jul-Sep 2020 Consumer Demand and Unit Size Property Prices Active Listings (Sq ft) (Rs per sq ft)

-15% 1 BHK 500-610 4,500-5,600 West 450-480 5,400-6,400 2 BHK Porur 900-960 4,700-5,700 830-950 4,900-5,800 830-920 5,000-5,600 2% 11% 3 BHK 1,250-1,300 3,900-4,700 Medavakkam 1,170-1,300 4,600-5,800 Demand 2% 1,130-1,200 4,500-5,200 18% 20%0% 63% 48% 16% 27% 3% 5% Supply Note: Average property prices and rental rates have been calculated as per listings posted on 99acres.com in 1BHK 2BHK 3BHK 4BHK the studied quarter. The range of property prices may vary by 10 percent depending on the age and furnishing status of the residential apartments.

Note: Supply is basis properties listed on 99acres.com in the studied quarter. Demand is basis queries received on 99acres.com in the studied quarter. INSITE : CHENNAI 9 ZONAL SHARE OF acres India’s No.1 Property Portal West Chennai 14% NEW LAUNCHES 29%

South Chennai, dominated by the booming IT/ITeS industry, captured 14% 99ACRES’ OUTLOOK over 40 percent of the total new launches in Chennai. West Chennai, followed suit with maximum Limited deals, stagnant sales, and delay cycle, labour scarcity and rising cost development happening near Porur, in new launches defined Chennai’s real of raw materials. another IT hub in the city. estate market in Jul-Sep 2020. With COVID-led lockdown subsequently Nonetheless, backed by planned getting extended on Sundays until expansion of industries and commercial August-end, construction activities activities, North Chennai remained Note: The data depicts share of new launches remained largely impacted. While popular among buyers and builders. across zones in Chennai in the studied quarter. 43% new launches were limited in number, Completion of the Outer Ring Road property enquiries reported an uptick (ORR) from Nemilichery to , the towards the end of the quarter. Peripheral Ring Road linking Residential sales dipped by over Road to Poonerji junction, and to-be- 30 percent, YoY. In line with the previous operational Washermenpet-Wimco Nagar quarters, ready-to-move inventory saw metro rail would also help improve maximum enquiries. realty sentiment in the region. In the RENTAL coming quarters, developers are looking Several homebuyers deferred their at completing the ongoing projects and LANDSCAPE buying decisions due to uncertainty in clearing the unsold inventory of roughly the job market and in anticipation of 19,000 units. Housing demand is likely price correction. The builder fraternity, to shoot up in the next few months in Key micro-markets based on consumer demand and active listings on the other hand, reeled under the areas such as OMR, Mount- impact of slow-paced construction and CBD. Localities Most Supplied Market Rental Rates YoY % Rental Units Share (Rs per Month) Change in Rental ‘Asks’

Pallikaranai 2BHK 48% 11,000-13,500 -4% 1BHK 26% 8,000-10,400

Porur 2BHK 45% 12,000-17,000 -3% 3BHK 32% 21,500-26,500

Velachery 2BHK 46% 12,000-15,500 0% 3BHK 30% 20,000-26,000

Ambattur 2BHK 75% 9,000-11,500 4% 3BHK 14% 12,000-14,000

Sholinganallur 3BHK 43% 19,500-23,500 -6% 2BHK 42% 13,000-18,000

Note: Average rental rates and supply have been calculated as per listings posted on 99acres.com in the studied quarter. Key micro-markets have been selected based on expressions of interest raised on 99acres.com in the studied quarter.

INSITE : CHENNAI 11 KEY HIGHLIGHTS CONCLUDING REMARKS

While home rents in Chennai did not see any The post COVID-19 pandemic era is expected to witness a movement in Jul-Sep 2020, as against Jul-Sep 2019, multitude of changes across sectors, including real estate. the average capital values across the city showed a Reduction in interest rates and therefore, lower EMIs would negative trend, QoQ. Affordable housing inventory encourage ‘real’ buyers to make quick home buying decisions. accounted for over 60 percent of the overall demand Further, with lucrative discounts and rebates being offered by in the quarter while mid-income and luxury segments accounted for about 22 percent and 12 percent share, builders, housing market in Chennai may show signs of recovery respectively. in the remaining part of the year. While COVID-19 has parked the realty growth temporarily, Chennai’s real estate has the potential Following the past trends, South Chennai remained to return to normalcy on the back of commercial expansion and a popular residential market among buyers. Areas affordable residential inventory compared to other southern such as , Perumbakkam, and Tambaram cities. Infrastructure projects, such as Peripheral Ring Road reported three percent hike in average capital ‘asks’, connecting Poonjeri Junction to Ennore Port, ORR and metro QoQ, on the back of sound connectivity to OMR expansion (Corridor 3), would improve the realty sentiment in and ECR and the presence of major IT hubs. Amid areas such as Perambur, , and Tondiarpet. COVID-19, enquiries for plotted developments picked up. Locations, such as Puddupakkam (in proximity to SIPCOT), and Tambaram, are popular for such developments. Most of the plots are priced between Rs 12 lakh and Rs 60 lakh.

The residential rental market remained subdued, too. However, certain localities such as Keelkattalai, and Urapakkam reported upticks in ‘asks’ to the tune of nine percent, YoY. Keelkattalai enjoys a robust road network via two arterial roads - Medavakkam Main Road and Pallavaram-Thoraipakkam Radial Road. The area is easily approachable from developed regions such as Pallavaram and Velachery.

INSITE : CHENNAI 13 ANNEXURES METHODOLOGY

The Insite Report by 99acres.com properties across varied budget captures the trends in the capital segments and BHK configurations. and rental markets across top The report also gives insight into eight metro cities – Delhi NCR, the key micro-markets based on CAPITAL VALUES RENTAL VALUES Mumbai Metropolitan Region consumer demand and active listings (MMR), Bangalore, Pune, Chennai, in the rental market. While demand Locality Jul-Sep 2020 Locality Jul-Sep 2020 Locality Jul-Sep 2020 Hyderabad, Kolkata and Ahmedabad. is a function of expressions of interest In order to assess the prevailing raised on 99acres.com, supply is 12 7600 Perambur 6500 sentiment, the report delves based on property listings posted on Adyar 13200 Perumbakkam 4400 23 deep into demand and supply of 99acres.com in Jul-Sep 2020. 4900 7800 Kodambakkam 22 FIND BEST OPTIONS TO Anna Nagar 10700 Poonamallee 4400 Kolathur 14 BUY, SELL, RENT PROPERTY Avadi 4320 Porur 5550 17 Besant Nagar 14000 RA Puram 15800 Madipakkam 13 7588 8000 Medavakkam 13 FIND BEST OPTIONS TO Chromepet 5700 4750 14 Egattur 6550 Sholinganallur 5500 27 BUY, SELL, RENT PROPERTY 14900 Siruseri 4200 15 Gerugambakkam 4680 3910 17 Price trends and Guduvancheri 3700 T.Nagar 11100 25 Mobile App property advice Iyyappanthangal 5740 Tambaram 4850 11 on Android platform and iOS 5750 11000 Padur 14 Keelkattalai 5410 Thoraipakkam 6550 Pallavaram 16 Kelambakkam 3970 Urapakkam 3900 14 Genuine listings with Kilpauk 11200 9200 Perambur 15 Over 9.32 lakh property photographs Kolathur 5360 6700 Perumbakkam 14 listings Korattur 6100 Velachery 7250 Perungudi 18 5900 Vengaivasal 5100 Porur 18 4610 7610 21 4820 Saligramam 19

Madipakkam 5500 RENTAL VALUES Selaiyur 12 More than 5640 Sholinganallur 17 1.7 lakh projects Medavakkam 5440 Adyar 26 Siruseri 13 Mogappair West 6280 32 T Nagar 24 Mugalivakkam 5700 Ambattur 13 Tambaram 12 Mylapore 14250 20 Thiruvanmiyur 20 Nanmangalam 4500 Avadi 11 Thoraipakkam 18 Navalur 4100 Chitlapakkam 12 Urapakkam 11 Nungambakkam 14500 Choolaimedu 20 Vadapalani 21 Oragadam 4300 Chromepet 13 Valasaravakkam 17 Padur 4480 Egmore 29 Vandalur 11 CONTACT US Velachery 18 Pallavaram 5600 Guduvancheri 11 0120 4879400 Pallikaranai 5200 Iyyappanthangal 14 Virugambakkam 18 Monday - Friday 9:30 AM to 6:30 PM IST *All prices are per sq ft rates acres India’s No.1 Property Portal Email: [email protected] 15 CONTACT US 0120 4879400 Monday - Friday 9:30 AM to 6:30 PM IST Email: [email protected]