Rising incomes from the IT, automobiles and electronics sector which form the backbone of Chennai's business, have been instrumental in pushing up demand for residential spaces. Chennai's residents could be categorized into the very upwardly mobile and the fairly traditionalist, but the gap is narrowing down thanks to the exposure to a western culture brought by not just the MNC and IT companies, but also the NRIs returning to India for better opportunities.

With business brewing, the Prestige and Nitesh Estates groups from Bangalore are moving into the city with residential and commercial projects. Prestige plans to set up a value mall in the city at an investment of Rs. 300 crore, Ozone Developers, again from Bangalore have acquired 42 acres at Koyambedu for a 5.5 million sq. ft. development plan for Rs. 250 to 300 crores.

IVR Prime Urban Developers has an ambitious plan for Chennai which includes a Business Park, resort, deluxe hotel, a hospital, colleges, housing complex and a golf course near Sriperumbudur, all at a cost of Rs. 2000 crore.

The retail scene will witness a sea change in the next few years, as 7-10 shopping malls will be constructed on N.M.Road, C-in-C Road, OMR, Velacheri, N.H.Road and Anna Salai.

Rates of residential plots and apartments have escalated in Chennai with prices in the city ranging from Rs.3, 000 - Rs.8, 000 per sq.ft .Neighborhoods like the Boat Club command even higher prices. Developers are encouraged by the demand for housing from the I.T.Sector. A strong demand is expected to boost sales in 2007. Hotel projects along the IT corridor are likely to be handed over by mid-2007.

For the city's large expatriate population, serviced apartments with value added services are under construction on Poonamallee High Road by Star City. Ready for occupation by late 2007, these apartments spell the coming of age of residential living in Chennai. Global Adjustments, a re-location firm for expatriates is exploring the proposal for a similar facility at Sriperumbudur along the telecom corridor. Housed within the Nokia SEZ, the apartments will be designed keeping in mind the needs of the target group.

Commercial properties in Chennai are also fast catching up with Bangalore and other Tier I cities. Guindy Industrial Estate is getting a facelift, with ramshackle factories giving way to gleaming glass and concrete towers. The proximity to arterial roads and the airport have made Guindy a promising destination.

Ambattur in the western part of the city is slated to be the next commercial and IT hub for Chennai with Best and Compton announcing its plans for an IT Park on its existing premises on 2 million sq. ft. area. The Tidel Park on 1.28 million sq. ft accommodates the IT industry with state-of-the-art facilities.

Appreciation

Chennai figures on India's list of hottest cities for the Indian real estate market The infrastructure constraints in Bangalore are forcing the IT and ITES companies to look towards Chennai, and a steady growth of 10% can be expected in 2007. An IT corridor along the old Mahabalipuram Road stretching from Taramani and Perungudi to Padur and Kelamakkam has seen land prices escalate almost three times in less than 3 years, and a further increase of 20-25% has been pegged for 2007.

The city limits are being pushed beyond Porur in West Chennai and GST Road in South West Chennai where residential property is being sold for Rs.1800 to Rs.2000 per sq. ft. Prices have appreciated by 20 to 25 % in these suburbs, due to the IT development on the Mount Poonamallee highway.

Along GST Road, prestigious projects like the Mahindra City, Arun Excello Foundation and Shriram gateway parks prompted prices to go up by 20% since 2006. The rate of residential property in these locations is Rs. 1400 to Rs. 2200 per sq. ft.

The rentals for prime residential properties in Chennai for Poes Garden, R.A.Puram, Alwar Pet and Harrington Road are expected to climb in 2007.

NRI Real Estate Trends

As per A.T.Kearney's Indian City Services Attractiveness index, Chennai has emerged as the most attractive city for offshoring. A glance at the MNC investment profile in Chennai shows the tremendous potential the city has for real estate:

• IT Services major Computer Sciences Corporation (CSC) has announced its 4th development centre in Chennai,
• Motorola will establish a manufacturing facility on the state government's 300 acre Hi Tech zone beyond Sriperumbudur near Chennai.
• Nokia, Flextronics, Foxconn & Motorola will set up facilities near Sriperumbudur on the Chennai-Bangalore highway in the global telecom arena.
• Tata Consultancy Services (TCS) is setting up a facility on 75-80 acres of land at the Siruseri Industrial Park on the IT Corridor of Chennai which will employ about 21,000 people.
• The Institute for Information Industry of Taiwan has set up its first offshore development centre in Chennai. The facility will provide a research and development platform for software and information technology companies of Taiwan.
• BMW has signed a MOU with the Tamil Nadu government for establishing a car assembly plant near Chennai.
• Japanese mining and road construction equipment major, Komatsu group is also expected to make a bid here.
• Nokia's `Made for India' mobile handset (1100) is actually manufactured in India near Chennai.

NRIs will have no reason to look back, with the range of facilities that real estate developers in Chennai are providing. The Singapore based Ascott group has tied up with the city's Rattha Group for serviced apartments in Chennai. Ascott's choice for Chennai is based on the fact that there is a strong demand for serviced apartments of international standards in the city. Holding 40% of the stock, Ascott will promote 210 units which will be ready by 2008.

Mogappair West Extension promises to be one of the most fashionable addresses in Chennai, with the Golden Treasure project under construction. Promoted by Golden Homes Private Ltd., the residential complex will feature health, entertainment and home shopping facilities within the premises.

Rajakilpakkam is an upcoming suburb on Madapakkam High Road with stylish homes under construction by Jains Housing. The Jains Sudarsana project will comprise of 420 flats in 14 blocks of 15 floors each. To be completed by 2008, the flats are priced between Rs. 24 to Rs. 37 lakh, and offer health and amusement facilities within the complex.

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