The Hindu Business Line : ‘North Chennai is next destination for real estate’

At a glance
Areas like Tiruvottriyur, Royapettah, Perambur, Ennore, Manali under the scanner.
Developers point to better rail connectivity, by suburban train, in North Chennai.
Projects like Ennore SEZ, Ennore Port expansion, India-Singapore economic zone for investors from Singapore pushed the area to prominence.

R. Balaji

Chennai, July 2 North Chennai and areas to the North of Chennai are the next major destination for real estate developers after the boom in development and soaring prices to the West and South of the City, say developers.

Most large real estate developers are picking up land, or are convinced that North Chennai is the place to be. At least two have announced projects in North Chennai — IVR Prime Urban Developers, a subsidiary of the Hyderabad-based IVRCL, and India Bulls Real Estate.

Industry sources say that DLF and HDIL are among the other large players looking at the area, apart from a clutch of regional players. This, they say, is the logical step after the developments elsewhere in Chennai pushed prices beyond the range of most wage earners.

A 2,400 sq ft plot in any of the popular residential areas in the city can run into crores of rupees. Apartments cost at least Rs 4,000-6,000 a sq ft, meaning buyers will have to shell out a minimum of Rs 40-60 lakh for an apartment of 1,000 sq ft.

Comparatively, the areas to the North of Chennai are still “realistically priced”.

Developers say it would be possible to price the projects at more affordable levels with land prices ranging around Rs 25-35 lakh an acre at Gummidipoondi, where India Bulls has announced a residential project.

At Minjur, an industrial suburb to the North, where IVR Prime’s project is expected to come up, land cost is about Rs 1.5 crore an acre.

Compare that with any area the same distance — up to about 30 km to the South of the city — and land prices are about Rs 10-15 crore an acre. To the West, towards Kanchipuram, there are no large parcels of land and price levels are soaring.

Sources say DLF is looking at North Chennai as a location for commercial projects — shopping complexes, malls — and is considering residential projects to the North of the city. Areas like Tiruvottriyur, Royapettah, Perambur are under the scanner, they say.

For the residential projects Ennore and Manali are being considered, they say. DLF would bring in the housing project, establish a consumer base, and look at commercial projects.

IVR Prime, its officials say, is looking at the blue-collar market segment to provide affordable housing at Minjur in North Chennai. The company will offer individual plots with houses — it is land that appreciates in value — at rates cheaper than apartments to the South and West of the city.

IVR Prime’s project will remove the misconception of what North Chennai is, say company officials. The company is looking at developing 300 acres in phases. Buyers would be able to pick up a plot of land of about 1,800-2,400 sq ft with a 750 sq ft house that the company plans to price at about Rs 15 lakh. A good buy compared to picking up an apartment at three times the cost, say officials, considering that it is land that appreciates in value, not the building.

Once large residential projects establish themselves it will not be long before the area sees multiplexes, malls and shopping complexes, they say.

Developers also point out that the rail connectivity, by suburban train, are far better to the North of Chennai, and ensure commuters can get to Central or South Chennai within an hour’s travel even at peak hours. “You can’t get anywhere in an hour by road to the West of the city or the South during peak hour,” developers point out.

Often a mention of North Chennai brings to mind a predominantly industrial area and crowds. But industry means employment generation and a market that can be tapped.

Apart from the traditional manufacturing industries that have been there for years, North Chennai has gained attention with major projects being announced, including the Ennore SEZ, Ennore Port expansion, and an India-Singapore economic zone for investors from Singapore.

Also, Tada, in Andhra Pradesh, where major industrial projects and Special Economic Zones are being promoted, is less than two hours drive and about an hour by rail from North Chennai.

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