In a city whose demographics are changing constantly with apartments becoming the norm rather than the exception, a plot as a mode of investment has still not lost its lustre. The severe space crunch in the city has resulted in land prices in the city going through the roof, sending plot developers and buyers scout for land on the outskirts resulting in a spurt in real estate development in these localities.
“Areas along the East Coast Road (ECR) between Mahabalipuram and Pondicherry, off the Old Mahabalipuram Road like Thalambur, Ponmar and Illalur have become hubs of activity,“ says Sarita Hunt, managing director, Chennai and Coimbatore, JLL India.
“When it comes to investing in plots Thaiyur, Kalavakkam, Thalambur, Thiruporur, VandalurKelambakkam Road are also a good bet,“ says N Hariharan, Head Commercial Agency, South, Cushman & Wakefield.
Infrastructure development, lower rates and the likelihood of prices rising fast guide buyer preferences, say experts.“Rajiv Gandhi Salai and Oragadam are the hubs of activity for the IT and manufacturing sectors.While Rajiv Gandhi Salai is an attractive choice due to its proximity to the various IT Parks and IT-SEZs, plots near Oragadam are ideal for investment too as it is an automobile hub. These locations are well connected by road and rail and the presence of various multinational companies have triggered real estate growth,“ says Hariharan.
Vandalur-Kelambakkam Road is one of the future growth corridors of the city as it connects two important arterial roads Grand Southern Trunk Road (GST) with Rajiv Gandhi Salai.Easy connectivity, and presence of many educational institutions in the vicinity have led to many residential project launches in this belt which will positively impact the future valuations of residential plots in the region, he further says.
With prices ranging between `500-2,500 per sq ft in these localities, the buyer now has a variety of options to choose from that fit his budget.
According to Faiz Ahmed, manager, sales, ETA Star, a leading property developer, Padappai, Oragaddam and Sriperumbudur along the NH-4 stretch have been showing fast growth. The last two months have shown a lot of conversions enquiries into actual buying he says. “The biggest investors are NRIs from the Middle East and Singapore.“
Though an apartment may seem to be a better bet as it ready for living, investing in plots makes a lot of sense, say these experts. “Flats are an inflexible format of property and this limits the maximum value they can attain. Flats are snapped up in most cases, but at fixed residential prices dictated by prevailing market rates,“ says Hunt. “As an area attains more market drivers and begins to saturate, plots increase in value manifold and can be sold on a seller’s, not a buyer’s market. Also, land is cheap in most cases and becomes a good capital investment,“ she adds.
“Buying a plot or apartment depends on individual choices and requirements,“ says Ahmed.“But investing in plots does make sense in the long run because appreciation is higher on a plot and they can be used for joint ventures. We also refer our clients to sub contractors so that their plots could be used as a source of income,“ he adds.
“Plots in peripheral areas are more for a long term investment. They can be leased for storage and small production uses that need open spaces. With additional investments, they can also be leased for warehousing and industrial activities by building sheds. Such plots can then be redeveloped in the future and new offices or apartments can be constructed on them, if local laws allow. Alternatively, until one actually intends to construct on the land for selfuse or for commercial purposes, one can undertake floriculture, horticulture or some similar activities to earn some income,“ says Hariharan.
However, the experts warn that it is important to make a few checks before buying a plot. It is essential to make legal checks on ownership history . Clear land title with no outstanding loans, taxes or mortgages must also be investigated. A buyer must ensure that the land parcel is not reserved for any government projects and does not belong to the agricultural category,“ says Hariharan.
“Aspects of approval needs to be checked, whether the plot is DTCPCMDA approved, whether bank finance would be made available, proper Roads and Infrastructure have been provided (EB, Water etc), also amenities within the projects and other developments coming up around it needs to be researched,“ Hunt adds.
Source: Sangeetha Nambiar, Times Property, The Times of India