South Chennai : Rapidly Grow Into an Emerging Residential Real Estate Market..!

The focus of Tamil Nadu government over the last decade in promoting OMR as an IT / ITeS destination along with the setting up of Mahindra World City on GST road has created immense employment opportunities in South Chennai.

Additionally, the proximity to Chennai airport, presence of arterial roads and availability of vast vacant land parcels has enabled this zone to rapidly grow into an emerging residential market.

Since 2000, a large number of IT / ITeS companies

have set up their operations in the numerous IT Parks & IT SEZs on OMR and GST road. The growth in IT / ITeS based employment, gradually sowed the seeds of a bustling residential market in this zone. Preference of employees in staying close to their work place and affordable pricing as  compared to Central Chennai sustained the development of a healthy market in this zone.

Growth of the residential market in South Chennai has been primarily along the three arterial roads of OMR, GST road & ECR. However, in the last few years a lot of development has taken place within the destinations located between OMR and GST road. The advantage of being centrally located with easy access to both these roads has led to many home buyers preferring these

destinations.

South Chennai has witnessed the launch of 68,914 residential units since 2007. Of these, a total of 50,666 units of this have been absorbed as of Q3 2012, with 26% remaining unsold. There has been a steady rise in the percentage of

unsold units over the years, as the pace of absorption has not been able to keep up with the pace of new launches. A total of 29,245 units were launched in South Chennai during 2010 and 2011, of which only 19,550 units were absorbed.

Taking a cue from the market, developers have become cautious before launching any new project and only 61 new projects have been launched in 2012 as compared to 147 during the previous year. Although the number of new

launches has reduced drastically, the excess supply from the previous years is impacting the unsold units’ percentage.

Additionally, absorption during the first nine month of the 2012

has been abysmally low.

Knight Frank - Chennai

No.3, Gitex Building, IIIrd Floor,

Khader Nawaz Khan Road, Chennai 600 006.

Phone: + 91 44 4296 9000

Source: Knight Frank Research

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