There is an unmet demand for high-end homes in the city.
The last week saw the launch of a handful of residential projects in Chennai, notable among them for size and market segment were two. Each with over a 100 apartments, with each apartment priced at about Rs 3-6 crore and on landmark locations.
Significantly, they are an indication of the trend and demand for high-end housing in the city. So far, products in this segment have been restricted to small numbers — less than a couple of dozen houses, except for DLF’s Commander’s Court launched in 2010 in the heart of the city in Egmore.
A one-of-a-kind project for its size and price then. The 350-apartment project set buyers back by Rs 1.6 crore to over Rs 5 crore to own a house there.
Since then developers have outdone themselves, may be not in size but certainly in price.
One of the projects announced last week was TVH’s Quadrant, at Adyar on Lattice Bridge Road, where an 18-floor tower with a 100 apartments of 2,200-4,700 sq.ft in a price range of Rs 3.5-6 crore. Located on a 2.2-acre plot, the apartments are priced at over Rs 15,000 a sq. ft.
The other project is the Prince Foundation’s Prince Courtyard, on the Poonamalle High Road at Egmore in Central Chennai, where over 155 apartments are to come up. Set on a 2-acre plot, where once stood the popular Dasaprakash Hotel, Prince Courtyard offers apartments priced at about Rs 16,000 a sq. ft, each apartment will cost a minimum of Rs 3 crore to over Rs 5.5 crore. Apartments will be of 1,850-3,405 sq. ft.
“You probably will not believe it, but I have firm buyers for more than half the units for Quadrant,” says Mr Ravichandran of TVH.
He is, however, not surprised. High-end homes are not new to Chennai. What is new is the format … apartments, high-rise towers.
fast turn around
If a buyer were to go it on his own, buy a plot and build a house to match an apartment there, just the plot would cost more, if they can identify a plot in such a location, he says.
What is surprising is the “fast turn around,” he says. Buyers are checking for details about the project and coming back in a matter of hours to book a unit. The reason is the short supply of quality homes to meet this segment’s demand.
Obviously, the talk of a slowdown and manufacturing sector concerns are not a worry in this segment. Developers say this is a segment that is starved of supply in the city. Where are the large parcels of land to house such projects? they ask.
People who stay here do not want to worry about the drudgery of upkeep, the daily chores of running a household, paying the utility bill, dealing with a team of house staff …
Demand for such apartments is high. “I am confident of selling the project within a month of launch,” says Mr Ashwin Kamdar, Managing Director, Prince Foundations.
High Land cost
There is no slowdown in the city. Where are such projects available? The demand is in the thousands but supply is in the few hundreds, he says.
“This is a dream project for me,” says Mr Kamdar. A landmark project in a landmark location, he says.
On the pricing itself, he says, it is inevitable. Look at the land cost, he says.
Over Rs 200 crore in 2011 and an additional Rs 50 crore for the premium floor space. Nearly 70 per cent of the price of the apartment goes towards the land cost that is over Rs 11,500 a sq.ft.
benefit for early entrants
Once you are in that segment you cannot hold back on specifications or target a middle-income segment. So construction cost goes over Rs 3,500 a sq. ft. And that is the just the cost.
Prices are bound to appreciate and early entrants will benefit, he says.
Prince Foundations had actually configured the differently last year but has completely rejigged it, taking into account the market needs.
It is now completely ‘vasthu’-compliant, there is more open ground in the plot with landscaping and water features, more car park space, say company officials.
So, what is the profile of a typical buyer?
High net-worth individuals … businessmen, presidents in companies and more senior executives, doctors, lawyers, they say. And enquiries are coming from all the major cities and from small towns.