Chennai - Southern Suburbs : CAPITAL VALUES INDICES..!

 by JLL India Report

The  key precincts in the submarket are Pallikaranai,  Medavakkam, Chrompet, Tambaram,  Thoraipakkam and Sholinganallur.

Southern Suburbs - Chennai                                           The southern suburb of Chennai which covers the  ajor corridors along the Great Southern Trunk  (GST) Road, Old Mahabalipuram Road (OMR)  and East Coast Road (ECR) has been witnessing  fast development over the recent years.

 The growth in IT / ITeS sector has paved way for overall  development of these precincts as it witnessed  development of large scale residential townships  from both national and local developers.

The  key precincts in the sub - market are Pallikaranai,  Medavakkam, Chrompet, Tambaram,  Thoraipakkam and Sholinganallur. 

The OMR is the IT corridor of Chennai while GST is the SEZ corridor. These two key roads drive the overall economic  activity of the precinct. There are many IT establishments along the OMR. Although the parts of OMR close to Adayar such as Taramani are established IT precincts, new precincts are emerging along the road towards the south in locations such as Sholinganallur and Siruseri extending up to Kelambakkam and further.

The Key IT Parks along OMR include Ascendas IT Park, SP Infocity, Prince Infocity, RMZ Millenia, the iconic Tidel Park

etc. This corridor also hosts IT SEZs such as Chennai One BPO Park and Ramanujan IT City along with
such campus developments as ELCOT SEZ and Siruseri SIPCOT Campus. On the other hand, 

GST Road predominantly hosts commercial spaces and SEZs.

The Key SEZs along GST Road are Shriram The Gateway, Mahindra World City and MPEZ.  

All the IT Majors including TCS, Cognizant, Accenture, Infosys, Wipro and HCL have  office in this submarket.

 

Being affordable office locations this submarket witnessed good interest from office                                                         occupiers looking for large volume of space. Lack of social  and physical infrastructure                                                 has kept the growth rate of rentals and capital values relatively slow.

However, the government initiatives such as six-laning of OMR from Siruseri to Mahabalipuram, ongoing metro rail connection  till Pallavaram on GST Road and proposed  monorail route from Vandalur to Velachery will improve infrastructure of these locations and consequently are expected to increase the  rents and capital values in the future.

                                                                                                                                             

CAPITAL VALUES INDICES

Sub-Market                                  

Chennai- Southern Suburbs                                                                                                 

2H 13        1H 14         2H 14

153          155           162

The Southern Suburbs submarket witnesses demand from the IT/ITeS employees as it comprises of the major roads such

as the OMR, ECR and GST Road where most IT related developments are concentrated. Major national and local developers such as L&T, Hiranandani Group, Puravankara Projects,Mantri Developers, Olympia Group, PBEL, Jain Housing &  Constructions and Vijay Shanthi Builders etc. are developing townships in the southern suburbs of Chennai. 

This submarket  witnesses large-scale integrated townships as there are large tracts of land available for development along the OMR and GST.

The key developments in this submarket include Hiranandani’s Upscale, Arun Excello’s Estancia, Embassy Residency,

DLF Gardencity, Olympia Opaline, etc.                                                                                                                                                                                                                                                                                         Chennai Southern Suburbs                                                                                                                                                                                                                                                                                                                    

Capital Value Change (1H09 = 100)

2H13        153                                                                                                                                                                                                                                                                                                                 

1H14        155

2H14        162

Organised retail developments are mostly seen in Velachery, while neighbouring locations such as Keelkattalai

and Medavakkam are also seeing healthy retail activity along the high streets.

The Phoenix Market City Mall recently commenced operations in Velachery is primarily catering to the needs of the residential catchments

located in the southern suburbs of Chennai. Tambaram and Chrompet along the GST Road,  always been traditional residential locations are increasingly seeing organised retail activity.

OMR is in nascent stages when it comes to retail developments, however, with an upcoming mall project near Thoraipakkam

and with increased residential settlements we foresee rapid retail development in this corridor.

This submarket is well-connected by OMR, GST and ECR to the core city.The International airport is also  oused in this submarket,

along with the existing infrastructure;  norail from Vandalur in GST Road to Velachery is expected to improve connectivity of

 locations along the GST Road. Metro rail, which is under construction, will also improve the connectivity of locations along the GST Road to the city.

OUTLOOK..!

Capital value growth of properties along the first half of the OMR  will continue to see healthy growth on the back of improving social  and physical infrastructure. Meanwhile, the second half of the OMR  is expected to see relatively faster growth in capital values, given  the government’s plan to extend the six-lane project from Siruseri to Mahabalipuram.

Existing physical and social infrastructure along the  GST Road coupled with ongoing and proposed infrastructure projects
are likely to drive property values in GST Road.

Located in between both these corridors precincts such as Keelkattalai, Pallikaranai, Medavakkam, Chitlapakkam,

Selaiyur and their neighbouring locations are expected to see rapid capital appreciation in the coming years. 

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