The improved transparency and visibility of Chennai property market in South zone, such cities also include Bangalore, Hyderabad have attained an area on the global realty map, a status that was restricted simply to Mumbai and Delhi within the past.
While South Indian cities represent nearly forty five percent of the country’s commercial space, the stock of one hundred forty million sq ft in these cities is projected to grow at a CAGR of 8% for the duration of 2012 – 2016, lower than the projected national growth of 11 percent. This means that the southern cities, significantly Bangalore and Hyderabad are comparatively rationalised in terms of medium supply of commercial property space and also the cities have chosen a technique of pursuing selective quality developments over rapid enlargement. Whereas this may keep their share in India’s commercial stock vary certain at 37%-40%, the South Zone’s vacancy rate by end-2012 is predicted to be 16 %, magnificently under the pan-India criteria of over 20%.
Panelists advised that if the commercial property in Chennai engrossment doesn't expand within the coming years, there'll be a concomitant result on the residential development furthermore. This in turn compel the necessity to keep the price under control constant check.
Specialist from the real estate sector have brought out that South India’s market of commercial property in Chennai has gone through a makeover within the past decade when its commercial stock grew from a mere 1.6 mn sq ft in 2003 to 13.2 mn sq ft in 1st Q12. The share of South India’s commercial stock to the pan-India stock is expected to record a notable increase from twenty percent at end-2011 to the touch thirty six percent by end-2016.
Demand for the organised commercial space is polarised towards either successful malls or high streets that have higher conversion ratio and footfalls. As the commercial stock in the Southern cities add up to breach the forty mn sq ft mark by end of year 2016, the vacancy by the then predicted to witness a notable decline from the height levels of 2014 to drop below the countrywide average of 20.5 %.
South India’s residential market has been an obsessive follower of the ‘affordability’ mantra, with more than 80 percent of the new launches within the past 2 years being priced under Rs 4000 per sq ft. As a result, the market of residential
property in Chennai and other south Indian cities have remained resilient within the past few quarters, relative to the numerous decline recorded within the sales volume of Mumbai and Delhi NCR. Having indicated healthy buoyancy over a long duration of uncertain times, it's quest for the developers to assure prudent pricing methods within the coming quarters to stay competitive likewise as sustain the momentum that they need gained throughout early year of 2012.
The focus of Indian realty shifting from Tier I to Tier II cities and also the southern region is additionally embracing a similar with secondary hubs developing in Kochi, Coimbatore, Vishakhapatnam and Mysore that are persistently striving for higher milestones.
On the housing finance front, LIC Housing Finance claims to do fifty percent of the business from the four southern states. Chennai is one amongst the quick growing cities not solely in real estate but also in the employment generation. With a growth rate of overall 20%, LIC Housing Finance loan book has posted sturdy expense of about Rs10,000 crore in tier III cities within the south.