Resurgence of Chennai - A Real Estate Perspective 2018
Chennai was one of the early movers to realize the potential of the technology sector in India. The Information Technology (IT) and Information Technology enabled Services (ITeS) sector took off in Chennai with the completion of TIDEL Park along Rajiv Gandhi Salai (the erstwhile Old Mahabalipuram Road) in the year 2000.
The growth of the IT sector and expansion of the manufacturing base attracted talent from different parts of the state as well as neighboring states. The resultant expanding urban sprawl and shortage of housing units drove demand for residential real estate, especially in the suburban and peripheral locations of South and West Chennai.
Over the past decade (2007–2017), the city has observed the launch of over 170,000 apartment units, resulting in an organized residential space stock in the city, growing from about 38,000 units in 2007 to more than 195,000 units by 2017. Most of these housing project launches were concentrated in the South Chennai vectors of GST Road and OMR, as well as the West Chennai micro-markets of Mount Poonamallee Road, Ambattur, Padi, and Sriperambudur.
South Chennai remains the most sought after location due to the availability of quality residential options, affordability, ease of access to workplace and emerging social and physical infrastructure. West Chennai is a close second due to the presence of large-scale IT developments, excellent social and physical infrastructure, availability of sufficient talent pool and relative affordability.
While the southern counterparts of Bangalore and Hyderabad are significantly dependent on the IT populace to sustain residential demand; Chennai’s residential activity is driven by not just IT, but by manufacturing and trading as well, resulting in a comparatively stable residential market.
Also, as employment creation plays a vital role in generating residential sales, growth in Chennai’s office space take-up/ expansion initiatives by corporates will continue to support housing sales. The commercial office space off-take in past two years has witnessed a steady increase driven by the expansion of corporates, a trend that is likely to continue and propel residential demand.