Chennai’s southern corridor drives growth in plots

Chennai’s southern corridor continues to drive demand and capital appreciation for investors in land development projects. This is because of improved connectivity, expanding city areas, growth of industries and infrastructure development, among others.

A survey on the price appreciation in the southern corridor areas like Singaperumal Koil, Maraimalainagar, Acharapakkam and East Coast Road (ECR) reveal that investment in plotted development has yielded capital appreciation ranging from 50-100 per cent in a span of just two years. Projects in the west and northern corridors have resulted in lesser capital appreciation of 25 per cent and above during the same period. Trivellore is the only exception, which has doubled during this period due to a combination of factors.

The southern corridor, Grand Southern Trunk (GST) Road, is the longest road and touches Theni in the same state. The Bangalore corridor extends upto 350 km to Karnataka and the northern corridor GNT reaches the neighbouring Andhra Pradesh state after Gummidipoondi. Moreover, GST Road has a parallel train track upto Tiruchy with Tambaram continuing to remain as the gateway to the Chennai city. The state government’s plan to build a Mofussil Bus Terminal in Vandalur has aggravated the demand for land in the vicinity.

According to land promoters in the city, the rate varies from Rs 500-1200 per sq ft for units located in a 50 km radius from the city centre and Rs 250-1,000 per sq ft in 50-100 km radius. Here again, prices vary depending on the developer, location, road width and proximity to landmark areas. If the project is well maintained and has a club house, a premium on the sale price is demanded by select developers.

In a related development, a few leading developers are planning to enter the land development projects with complete infrastructure development and offer it as premium to investors. This is expected to transform the way in which plotted development projects are being done at present, say property consultants.

There are certain ground realities which investors should be wary of  before plunging into investment. Investors should enter into plotted development projects only if their investment horizon is beyond five years. This is because 100 per cent price appreciation is possible in a 50 km radius in five years and in the 100 km radius, it might take 7-9 years to reach that level of appreciation, say land developers.

Source Times of India  /  Magicbricks.com Bureau