Chennai is growing beyond belief and becoming a huge jewel in India

Chennai Real Estate Makeover

Chennai is experiencing a major real estate makeover. Indeed, the new growth areas are not in the heart of the city; it is the sleepy suburbs that are witnessing frenetic construction activity. Nothing illustrates this boom better than the shooting up of land prices to levels unimaginable even a year ago.

The obvious catalyst for this growth is the phenomenal development of the Information Technology sector in the past decade. But just as important are the new facets of the traditional strengths that the city offers, particularly as a retailing and manufacturing hub. Simply put, IT has led to increasing levels of disposable income in the hands of the young workforce. Their consumerist culture has had important implications for the city. The happenings in the real estate market only testify to this.

Chennai is an important base for all the IT majors, including Wipro, Ascendas, Tata Consultancy Services, Infosys and Polaris. There are several reasons why this is so. The most important one is the city's reputation as a reliable centre for technical education, which results in companies being assured of a steady supply of qualified personnel. Apart from the Tier I companies, there are several smaller ones that operate in the IT-Enabled Services (ITES) and Business Process Outsourcing (BPO) segments.

Not everything that is new is related to IT. International automobile giants such as Ford and Hyundai, telecom majors such as Motorola and Nokia, and retailing majors such as Shopper's Stop and Lifestyle have an important presence in Chennai. Moreover, several mega malls are being planned. There are also indications that the consolidation in the retailing industry could result in larger retail outlets and better-paid jobs.

In order to provide a further impetus, both the Centre and the State government are initiating projects such as the four-lane Chennai bypass Phase II, a cloverleaf structure close to the airport that will directly connect the city to different National Highways. This is expected to ease traffic congestion in the city. The Rs.200-crore project is to be completed by 2008. A six-lane road, replacing the two-lane Old Mahabalipuram Road, leading to the IT corridor is also due for completion.

In order to cater to the needs of business travellers, several business centres have been established in the city. For travellers who combine business and leisure several up-market hotels have been built in recent years. International players such as Courtyard Marriott, Radisson, Hilton and Le Royal Meridien have a visible presence in Chennai. Several more such facilities, including five-star hotels of the Leela and JW Marriott group, are under construction. The city already has a convention centre, the Chennai Trade Centre, spread over 25 acres .

Until about a decade ago a typical property hunter would have been about 50 years old, planning for a house on the verge of retirement. Invariably such persons would have been residents of Chennai or would have hailed from Tamil Nadu. This situation has changed. Real estate developers say the average age of prospective clients now has dropped to 28-35. Young and adventurous, with disposable incomes that are a manifestation not only of the IT boom but also of newer occupations in the service sector, they come from all over the country. Says one real estate promoter: "Chennai's biggest advantage is that it blends the characteristics of a small town and a big metro."

It would be a mistake to think that the boom is entirely driven by the IT phenomenon. The noticeable change in the age profile of the industrial workforce - not just in IT but also in the manufacturing and services sectors - has been made possible by a more flexible approach to labour. Employers across the board appear to prefer a younger workforce, which has implications for the real estate sector. ??????

But this workforce is highly segmented. At the top of the heap are professionals of the IT and allied sectors and those working in private banks and the financial services sector, followed by top executives working in the manufacturing sector, particularly those employed in the private sector and multinational companies. The most important element within this segment is the non-resident Indians who are increasingly buying property in the city. This segment constitutes the core of the "high-value" market in the real estate sector.

Land prices in Chennai have spiralled in the past few years. This means that the traditional bungalow, or `independent house', is beyond the reach of even the wealthiest. The "flat culture", although slow in taking off, has now matured significantly. This makes it possible for owners to get amenities and a quality of life that would be virtually impossible in an "independent house". Swimming pools, penthouses, round-the-clock security, landscaped gardens, play areas for children - all these are standard amenities provided in the new housing complexes.

As land prices increase and the provision of basic amenities come under strain, scale becomes critical in the real estate business. Indian real estate or property market is buoyant. And the market leaders are predicting phenomenal growth and foreign direct investment in this vast land of opportunities in coming years. India is the best example of unity and religious tolerance therefore it's undoubtedly the best place to invest for earning huge dividends. India is always trying to offer the best in terms of real estate investment by altering its FDI policies time to time. The sole aim of this country is to provide best opportunity to everyone to flourish in their respective sphere.

With better infrastructure and availability of world class facilities, property in Indian prominent cities are the most sought after proposition. No wonder, this part of the globe is going to become the ultimate place for investment in contemporary retail, residential or commercial space.