Chennai buyers favour plots post COVID pandemic

  • | Saturday | 28th November, 2020

Like all industries, big or small, the real estate too has been hard by the COVID-19. The pandemic drastically altered real estate investment preferences, with plotted development projects now trending in Chennai.

Like all industries, big or small, the real estate too has been hard by the COVID-19. The pandemic drastically altered real estate investment preferences, with plotted development projects now trending in Chennai.

According to a report by real estate consultant Anarock, key developers have so far launched at least five different plotted development projects comprising around 900 units in the last four to five months. Trends indicate that the corresponding period last year did not see nearly as many plotted development sales as this year, the report stated.
 
Prominent locations that saw plotted development projects launched are Iyyappanthangal, Vandalur, Manivakkam, Avadi and Thirumazhisai. The plot sizes start as low as 560 square feet and go all the way up to 2,400 per square feet. or more. Most of these localities are towards the peripheries of the city where average prices hover at Rs 2,500 per sq. ft.

"If we consider buyer trends based on current enquiries, the highest demand is for plots sized between 1,000-1,200 sq. ft. with average ticket sizes from Rs 25-35 lakh. While some buyers intend to build and occupy homes on these plots, there are also many long-term investors in the mix," says Sanjay Chugh, City Head - Chennai, Anarock Property Consultants.

Though land investment is a time-honoured tradition in Chennai, the trend of apartments had drawn more buyer interest over the last decade. However, the COVID-19 pandemic has once again boosted demand for land as a long-term investment alternative. There is also considerable interest in plots in gated societies, where building standalone homes is seen as a safe bet in pandemic-like situations. The rise of the work from home culture is also closely interrelated here.

A Shankar, Chief Operating Officer, Strategic Consulting, Jones Lang LaSalle (JLL), says that during the last few months there`s been a good amount of movement happening in the residential sector because interest rates are at an all-time low, developers are offering attractive pricing and there are signs of a vaccine.

"The buyers are preferring more customised space and hence the trend of plotted developments are on the rise. Moreover, upcoming plotted developments are at preferred locations with best price. While this trend is definitely going to increase in the near future due to change in behaviour of some buyers who can afford such a plotted land, the preference for affordable apartment units will also continue to gain momentum," says Shankar.

S Sridharan, CREDAI chairman, Tamil Nadu Chapter told The New Indian Express that quite a few developers are getting into plotted development. "Some have gone into villa development. Some people tend to prefer villas, so they buy the plots and developers build it for them," said Sridharan.

The demand for ready apartments has not abated since they present a lower overall risk, especially with considerable ready-to-move inventory available, says Chugh in the report. "However, many developers sense the benefits of liquidating some of their landholdings and raising working capital via plotted developments. The capital investment required is minimal, the project execution risks low, and developers can exit quicker," he added.

It is learnt that the proximity to IT Parks in Porur and the Sriperumbudur industrial belt has boosted realty demand in Iyappanthangal. Average prices for plots are around Rs 2,800 per sq. ft. Similarly, the average price of plots in Vandalur, which enjoys  good connectivity to the IT corridor of OMR and GST Road, hovers at around Rs 2,500 per sq. ft.. Growth here can be largely attributed to factors like the IT belt, industrial growth and quality healthcare institutions.

Among the notable upcoming infra projects are the monorail project. Corridor 1 of the monorail connects Vandalur and Tambaram (South Chennai) with Central Chennai through Velachery. Vandalur is expected to benefit with this monorail corridor, though the project is still in its initial stage of implementation.  The main bus terminus is scheduled to be operational in Kilambakkam near Vandalur in early 2021. There is also demand for plots in Avadi, Manivakkam and Thirumazhisai.

Avadi has quickly emerged as the favourable realty hotspot in Chennai`s western region. Popular for its defence establishments, the area has transformed into a major residential hub with robust physical and social infrastructure, including healthcare and education. Enhanced connectivity to other prominent localities of Chennai via NH 716 is an added advantage. With maximum real estate activity in the affordable and mid-segment categories, average land prices hover at INR 2,300 per sq. ft, the report states.



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