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Pallavaram: Exploring Potential In Chennai’s Realty Sector

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Pallavaram Chennai

Being one of the oldest inhabited towns in south India, Pallavaram is a place where historical structures of the Pallava dynasty intermingles with cantonments and residential colonies. Despite of being 17 km away from the heart of Chennai, Pallavaram holds a good connectivity to IT corridors Shollinganallur and Thoraipakkam. It has also created additional demands for residential properties, resulting in escalating land prices.

Most of the IT professionals working in these corridors are opting for the stay in Pallavarm. As its location on the outer, proximately 7-10 km, provides an environment free from the hustle and bustle of the IT hubs.

Majority of the real estate absorption in the city is mainly focused along the Guindy micro-market, closer to Pallavaram and the Old Mahabalipuram Road (OMR). Areas in the vicinity of Pallavaram are promising fast growth, owing to the continued demand for office space, vis-à-vis transportation and social infrastructure in the years to come. Old Mahabalipuram Road and nearby localities will continue to pull attention from the corporates from various sectors, including IT, manufacturing, engineering and insurance.

Due to the improving fundamentals in the IT and manufacturing sectors, the office market is showing a stable improvement. Which will further enhance the residential market.

Currently the prices for apartments vary from Rs 4,000-5,500 per sq ft. The 2BHK units are gaining the maximum demand, as the most preferred budget range happens to be Rs 35-Rs 50 lakh. As of now the availability is mostly limited to the price band of Rs 50-Rs 60 lakh.

This momentum of the residential properties in the locality has caught the investors’ attention.  As these localities are high on yielding good returns on investments, proving to be a good bet for investors. There might be a further push for the prices in the locality, as in coming future, locality would be included within the municipal corporation limits.

With rental values inching up on a regular basis, the rental demands are gaining speed in Pallavaram. The rental values for apartments range have reached up to Rs 15-Rs 20 per sq ft-per month, as the single IT professionals are mostly driving the rental market here.

Chennai’s residential market has witnessed the launch of nearly 5,300 residential units, depicting a rise of 19 per cent from 2016. 33 per cent of the total launches, were focused in the outer locations of the city’s south quadrant, along OMR, ECR and the Grand Southern Trunk (GST) Road. Major players of the real estate in the mid-market category accounted for about 70 per cent of the total launches.

Real estate growth is proportional to infrastructure growth. Pallavaram area is about to witness significant residential demand in the near future. Therefore, there is a need of some considerable overhaul for the existing infrastructure in order to match the increasing demands for the real estate in the area.

Residential

Residential Market Prices Drop Sharply In Kolkata

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Kolkata Residential Market

In the Kolkata market, the residential market prices have dropped substantially in the second half of 2017. According to a study by a real estate advisory firm, Knight Frank, during the same period, annual launches have fallen by 47 percent.

The study said that the effective prices in the organized residential projects in the city have dropped to the extent of 12 percent, which included a slash in the base prices charged by the developers, along with a waiver of other charges like stamp duties.

Samantak Das, Chief economist and national director of Knight Frank, said that the price drop is due to the sluggish market, in addition to aging inventory levels of the completed units for which the developers were going slow on new project launches. He also said that the downward price correction would be more pronounced in the coming months.

There were nearly 40,000 unsold units in the organized residential segment in Kolkata in 2017. The yearly sales had fallen more in 2017 as compared to the previous year when the demonetization was announced. The report also suggested, since West Bengal was yet to adopt RERA and establish the Housing Industry Regulatory Authority (HIRA), the developers were adopting a ‘wait and watch’ approach.

The report added that nationwide along with cities like Pune, Bengaluru, and Chennai, Hyderabad witnessed the steepest fall in new project launches.

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685 Housing Projects ‘Under Investigation’ By Karnataka RERA

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Housing Projects Under Investigation By Karnataka RERA

At present Karnataka has approximately Rs 50,000 crore on stake riding on various real estate projects. The Real Estate Regulatory Authority (RERA) Karnataka has raised a question mark on the future of one lakh apartment units and an equal number of investors in the state. This is due to 685 construction projects that are unregistered with RERA Karnataka. Thus the RERA Karnataka have listed them as “under investigation”.

The Karnataka government notified the Centre’s RERA Act, 2016 in July last year. RERA Act is aimed at protecting the investor’s interest by regulating the real estate industry with a host of rules. All projects are to be registered under RERA and will get a clearance certification only after they meet the prescribed norms.

On Monday, RERA Karnataka has listed 685 realty projects in red with an alert: “The public is hereby informed that these projects are not registered with RERA and are under investigation. The public is warned that dealing with these projects is at their own risk.’’

Shrinivas Rao, CEO, Asia Pacific of Vestian Global Workspace Services does the Math. “This (685 projects) would mean at least one lakh units, at an average of Rs 50 lakh per apartment. It is a neat Rs 50,000 crore exposure for builders. A property buyer would have paid 15-30% upward during the time of booking, which means around Rs 15,000 crore has already gone into the market.’’

At least 50 percent of these projects are in Bengaluru. The realty industry is panicking as the stakes are high. There is also the factor of the construction finance exposure to banks. Many nationalized bank’s Non Performing Assets lists have real estate players as their major defaulters. This number of defaulters among them is only likely to go up.

A developer who has already submitted eight projects’ details with RERA and is still under the red list said, “We have submitted the required documents to the Authorities highlighting that these projects have received occupation certificate and hence not required to be registered under Karnataka Real Estate (Regulation and Development) Rules as per rule (4) of sub-rule (iv). We were told by authorities that they will remove our name/projects from the list in 4-5 days.’’

K Ramesh, managing partner of Arna Shelters cautioned home buyers against investing in such projects and said, “Property registrations will not be done without RERA certification and even resale of old properties won’t be easy.’’

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All Delayed Projects Sees A Deadline Of March 31st In Tamil Nadu

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Smart City Projects

In a recent report submitted to the Rajya Sabha, the Union Ministry of Housing and Urban Affairs, noted that Tamil Nadu was faring poorly in spending the funds for the Smart Cities Projects. The spending amounted to less than 1% of the funds sanctioned, also the state’s own allocation of Rs 200 crore has not been touched at all. Following it, a meeting was held by the Municipal administration and water supply minister S P Velumani.

In which he set a deadline for local bodies in Tamil Nadu to begin work on delayed and pending proposals, under the smart cities project by March 31st. A funding of Rs 196 crore was sanctioned for this mission in 12 cities of Tamil Nadu. Which comes under the Union government’s mission to develop 100 citizen-friendly and sustainable cities all over the country.

The minister has also said that the state government has asked the central government to relax the norms for various projects, especially for the water and sanitation related projects. But according to the reports, these projects would be sped up regardless of the central government’s response.

A review meeting with bureaucrats was chaired by the minister, at the Chennai Metrowater headquarters in Chintadripet. The minutes, of the meeting, revealed the discussion about the status of smart city and Atal Mission for Rejuvenation and Urban Transformation (AMRUT) proposals. Corporation issued a statement, that 12 municipal corporations had altogether received clearance from the Centre to execute 173 proposals, worth Rs 13,425.65 crore under smart cities project.

The AMRUT (Atal Mission for Rejuvenation and Urban Transformation) sanctions funds for drinking water, park maintenance and sewerage projects. Out of the 428 projects, 83 park-related projects have reached the completion. When other states have special agencies with the decision-making authority for the implementation of the Smart Cities Projects. In Tamil Nadu, the respective agencies don’t hold that much power, and must seek approval from a “higher committee”.

Three tenders worth Rs 3.65 crore have seen completion, out of the 173 proposals. Another 14 proposals worth Rs 491.97 crore have gone under the construction. Next 37 proposals are seeing the calling of the respective tenders worth Rs 1,795.92 crore. Detailed project reports (DPR) are being made for the last 19 proposals worth Rs 11,134.12 crore.

Local body officials were instructed that the bids inviting for proposals will see a deadline of January 31st. Projects with the DPRs are supposed to get ready for the tenders by the March 31st. Minister emphasised on a priority for drinking water and sewerage schemes, roads and storm water drains.

There are 18 drinking water projects (Rs 6,508.73 crore), 392 park projects (Rs 222.67 crore) and 18 sewerage line projects (Rs 4,757.60 crore) under the AMRUT scheme. Overall these Centre sanctioned projects, in 33 cities of Tamil Nadu, are worth Rs 11,489 crore. 83 park maintenance projects, worth Rs 44.92 crore have already been completed, out of the total 428 projects sanctioned under AMRUT. Whereas the remaining projects are under various stages of execution

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