Real Estate Growth in Southern Port City Chennai of Tamilnadu

The revolutionary policy shift in favour of an opened economy by the Indian Government in 1991 brought tremendous growth to all sectors on the wheel of Indian economy; especially the importance was stressed on developing infrastructure in the country. The main obstacle for India?s development was once attributed to be lack of infrastructure and pathetic policy of negligence by administration in this sector as well as housing problems. The situation changed with the policy shift and lot of attention and investment were diverted in developing road network, housing, water supply schemes, eAdministration and education.

Development of road infrastructure ultimately resulted in developing and connecting small cities and villages with major cities and influx of manpower to major cities as well as creation and development of many suburban areas in Bangalore, Chennai which includes places like Mamanddur, Chengalpet in the southern end which is 78 kms from chennai city and on the Bangalore highway the growth has extended upto Sri perumbudur, Cochin in the State of Kerala, Hyderabad (called Cyberabad), Mumbai, Delhi NCT, Noida, Ghaziabad, Faridabad, Gurgaon and many places. Development of these places have necessitated creation of more housing and offices for the Corporate houses who have plans to settle down in these cities and a forecast by a well known financial consultant has indicated that the Indian real estate sector can grow from the current $12 billion to $90 billion by 2015 and India is the most promising real estate market in Asia.

Among the four metropolitan cities in India, the port city of Chennai has a distinct advantage of a major corridor to Southern India and the finest English language pronunciation and vast population of literates. Also, it has a distinct advantage in terms of residential rental and capital values. While Mumbai and Delhi are commercially important, their rental and capital values are much higher than Chennai. Lower operational cost, availability of land and low cost of accommodation has been the major attracting factors for many domestic and multinational companies to settle their operations from Chennai.

On the advent of many multinational corporate houses other than IT and BPOs, like BMW, Nokia, Hyundai, and St Gobain setting up their state of the art production units, real estate business in this Southern Metropolis is on record growth and apartments which were available at the rate of Rs.75 Lakhs per flat in 2003 has touched the Rs.1 crore level within the last two years period, despite all odds of lack of infrastructure and all time scarcity in supply of potable water and electricity. The Tsunami effect brought the prices a bit lower for sometime but it has again started rocketing up in sea-front areas like Mylapore and have seen a remarkable increase in bookings and the cost of a flat at rate of Rs.50 lakh and above depends on the facilities offered.

The Government of Tamil Nadu brought out the ITeS policy of the government of Tamil Nadu in 2003 with their intention to make Chennai the ITeS hub of the entire country and going to ensure greater focus on other industry segments such as BFSI, healthcare, education and design and engineering. Already, Chennai has a major chunk of 15% to 20% of the total software export business in India and now the ITeS sector is on the move and this would bring a further growth on the already heated up Real Estate market in the city.
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