North Chennai buzzing up slowly

North Chennai is an area where traditional investors have never laid their eyes on.Poor infrastructure and lack of IT industries has made it a low preference area for investors. With the current govt giving a lot of importance to port building has brought this area under investors radars.

Read further to understand what makes it buzz now

With expansion activities of two major ports — Chennai and Ennore and large special economic zones being planned, northern Chennai, often considered an industrial backyard, is expected to witness a spurt in real estate activities in the commercial and residential space..

The boom in IT and manufacturing sectors has driven real estate growth in southern part of the city, while northern Chennai, which houses a few industrial clusters, did not see any major realty development over many years. Sanjay Chugh, associate director, Jones Lang LaSalle Meghraj, says for long, northern Chennai remained under-developed due to lack of infrastructure.

This led many property developers to stay away from exploring opportunities in the area. However, there has been renewed interest in this area in the recent past and many developers have acquired land parcels for development.

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“Land prices have already gone up in several areas of north Chennai, owing to the demand for warehouses and container yards. Large logistics companies and private warehouse operators are driving this demand. Apart from conventional warehousing, the requirements for storage space for perishable and non-perishable food items would also go up in the near future,” says Rajesh Babu, chief executive, RECS Group, a real estate consultancy company.

At present, land prices are estimated to be about Rs 50 lakh a ground, along the main roads such as Tiruvottiyur High Road in northern Chennai, against Rs 25-30 lakh two years ago.

However, compared with the southern part, the appreciation is not substantial. After the expansion of Ennore Port and the proposed SEZ there, land prices are expected to shoot up in coming years.

In Ennore, along the main road, the prices are estimated at Rs 75,000-100,000 lakh per acre for buyers of large tracts i.e. between 50 acres and 100 acres, while the price is Rs 30-35 lakh per acre if the land is a little away from the main road.

Chugh pointed to major infrastructure initiative undertaken by the government to connect north Chennai to western and southern parts. “Due to this connectivity, we hope to witness hectic real estate activities in this region. Apart from warehousing and commercial activities, there would be a spurt in residential projects as well,” he says.

However, Babu feels that though infrastructure is good, there seems to be no big market for IT space or corporate offices. Only logistics companies or clearing and forwarding agents would set up shop there. Traditionally, many companies have looked at north Chennai as an industrial area and the same perception continues even after the envisaged port expansion activities.

However, there is a good potential for retail activities in the areas such as Thondiarpet and Thiruvotriyur, he adds. “Of late, there has been a demand for good quality housing due to factors such as growing industrial activity and higher affordability,” says Chugh.

This has prompted developers such as Emmar MGF and Arihant to develop residential projects in north Chennai. Unitech also plans to develop a large residential complex on the erstwhile Binny’s property in Perambur.

Chennai Port Trust, a major player in container and car exports business, intends to invest Rs 3,000 crore over the next three years in upgrada tion and modernisation of the port. As a part of this plan, a new container terminal is being set up. A 18.3-km long dedicated elevated expressway from Chennai to Maduravoyal on NH-4 that would connect Chennai Port-NH-Bangalore and the industrial hub of Sriperumbudur, is being implemented. Similarly, another road project connecting Chennai and Ennore Ports is also being taken up.

A number of automotive majors including Nissan, are reportedly looking at setting up facilities or “caryards” in the area. Ennore Port, the first corporatised port in the country set up as a satellite port to decongest Chennai Port, has chalked out plans to invest Rs 2,700 crore during the 11th five-year plan. It has already undertaken Rs 1,140-crore worth of projects. S Velumani, chairman and man aging director, Ennore Port, says thai the proposed container terminal project would be the biggest terminal on the east coast.

The expansion projects at Ennore Port are expected to boost trade and trigger rapid development of the hinterland, he notes. With Tamil Nadu attracting huge investments in manufacturing the Chennai and Ennore ports hold immense potential to facilitate large-scale exports not only for automotive sector but also for number of other sectors.

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