Chennai, often considered to be the Gateway to southern India was one of the early movers to realize the potential of the technology and manufacturing sector in India, attracting talent from different parts of the nation. This coupled with governmental reforms surged the residential space in this market. According to recently released report by CBRE- Resurrecting Chennai – Insights into City’s Housing Dynamics, the city sold over 45 million sq. ft. of housing space in the last two years.
The report, released during the inaugural session of the Chennai edition of CBRE PropFair states that Chennai has emerged as the preferred location for prospective buyers in south India. A significant number of infrastructure initiatives have also been undertaken by the State Government to reduce infrastructure inadequacies attributed to the city’s increasing population density; resulting in an increase in the apartment units from 17,000 in 2005 to about 170,000 units in 2015. Going forward, Chennai is expected to shape and structure the growth in real estate for the region.
Commenting on the findings of the report, Mr. AS Sivaramkrishnan, Head of Residential Services, CBRE India said, “Chennai’s residential real estate market has witnessed exponential growth over the past decade. Unlike the other southern counterparts like Bangalore and Hyderabad; Chennai’s residential activity is not just driven by IT, but is equally supported by manufacturing and trading as well, resulting in comparatively stable residential market. This dynamic market has registered strong growth numbers and will play a crucial role in shaping and structuring the real estate sector for south India.”
Various factors such as the Government’s flagship programmes, easy availability of large land parcels at competitive rates and relaxation of the Floor Space Index (FSI) resulted into formidable growth. The total available commercial office space in Chennai grew at a Compounded Annual Growth Rate (CAGR) of approximately 19%, to reach more than 58 million sq. ft. in 2016.
The report captures market dynamics of the Chennai real estate market and analyzes the recent trends seen across micro-markets in the city. It further adds that the residential segment in Chennai has been concentrated around Central Chennai with Nungambakkam, Alwarpet, Mylapore, etc. However, with increasing growth prospects of the city, these independent houses began to re-develop as apartments to accommodate a larger populace.
Chief Guest at the PropFair, Mr. Dharmendra Pratap Yadav, Secretary, Housing and Urban Development, Government of Tamil Nadu, said, “the real estate industry in picking up now. I would like to have increased private public participation in affordable housing. The government is also working on various parameters to bring down the costs.”
Construction of Greenfield airports and aerospace parks, monorails and elevated expressways are some of the many initiatives which the State Government has undertaken to address infrastructural inadequacies. The city’s residential landscape and its growth prospects by virtue of being well connected enable the micro-markets to enjoy excellent connectivity to all the major parts of the city.
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