Chennai is the third largest commercial and industrial centre in India, and is known for its cultural heritage and temple architecture. It is also a hub for south Indian classical music and dance performances. Chennai is considered the automobile capital of India, with a major percentage of the automobile industry having a base here and a major portion of the nation's vehicles being produced here.

Real estate prices have doubled in Chennai over the years. Most companies feel that Chennai offers excellent manpower, particularly in the software industry, which compares better than that in Hyderabad and Bangalore.

Chennai is a delightful mix of tradition and modernity, as it embraces the positive influences of a westernized culture while retaining its rich tradition and heritage. Once perceived as a conservative laid back city with a largely salaried middle class, it has shed its inhibitions to catch up with the latest lifestyle trends followed by other metros in the country.

Interestingly, as a port on the Bay of Bengal, the city merchants of Chennai have a history of trade links with South Asian countries. High traffic even now on this route has encouraged investments from Singapore and Malaysia where a large number of Tamilians reside.

The lack of jobs in the city in the 1970s and 80s' forced a great number of its residents to search for opportunities abroad. But with the boom in Indian economy and prospects far brighter now, the number of NRIs turning back home is growing. With their return, the city has witnessed a consumerism that has changed the lifestyle of its residents.

Known for its gorgeous silks and intricate handicrafts, a visitor to the city cannot but submit to the charms that the shopping centres and the enticing cuisine have to offer. Enveloped in an aroma of jasmine and sandalwood, Chennai's bustling markets are a shopper's delight. The reasonable cost of living permits a comfortable lifestyle which any investor with future plans would not complain about.

Infrastructure and Facilities

Foreign Investors in India has rated Chennai as having the best infrastructure facilities in India. To support the existing intra city transport, the Chennai Metro rail project is being proposed, with the central government willing to contribute to 20% of the cost of the project.

The Chennai Metropolitan Development Authority is planning a single window clearance to expedite clearance of building plan applications. This service will verify land records, clear building plans, make on-the spot investigations - all at the same window, and has been proposed and supported by all stakeholders in the real estate business.

As Southern India's foremost city, Chennai has excellent health, educational and infrastructural facilities. The city boasts of the best medical facilities in the country, with Apollo, Vijaya and Shankar Netralaya healing patients across the country.

A community which lays great stress on academic excellence, Chennai's literacy rate for males is 84.71 and for females, 75.32. Institutions of repute such as the Presidency, Loyola, NIFT, and IIT are the city's pride.

Foreign investors from Singapore are tapping the Chennai real estate market for profitable investments, and are showing keen interest in sector-specific and multi-product SEZs around the city.

Real Estate Developments in Chennai

Rising incomes from the IT, automobiles and electronics sector which form the backbone of Chennai's business, have been instrumental in pushing up demand for residential spaces. Chennai's residents could be categorized into the very upwardly mobile and the fairly traditionalist, but the gap is narrowing down thanks to the exposure to a western culture brought by not just the MNC and IT companies, but also the NRIs returning to India for better opportunities.

With business brewing, the Prestige and Nitesh Estates groups from Bangalore are moving into the city with residential and commercial projects. Prestige plans to set up a value mall in the city at an investment of Rs. 300 crore, Ozone Developers, again from Bangalore have acquired 42 acres at Koyambedu for a 5.5 million sq. ft. development plan for Rs. 250 to 300 crores.

IVR Prime Urban Developers has an ambitious plan for Chennai which includes a Business Park, resort, deluxe hotel, a hospital, colleges, housing complex and a golf course near Sriperumbudur, all at a cost of Rs. 2000 crore.

The retail scene will witness a sea change in the next few years, as 7-10 shopping malls will be constructed on N.M.Road, C-in-C Road, OMR, Velacheri, N.H.Road and Anna Salai.

Rates of residential plots and apartments have escalated in Chennai with prices in the city ranging from Rs.3, 000 - Rs.8, 000 per sq.ft .Neighborhoods like the Boat Club command even higher prices. Developers are encouraged by the demand for housing from the I.T.Sector. A strong demand is expected to boost sales in 2007. Hotel projects along the IT corridor are likely to be handed over by mid-2007.

For the city's large expatriate population, serviced apartments with value added services are under construction on Poonamallee High Road by Star City. Ready for occupation by late 2007, these apartments spell the coming of age of residential living in Chennai. Global Adjustments, a re-location firm for expatriates is exploring the proposal for a similar facility at Sriperumbudur along the telecom corridor. Housed within the Nokia SEZ, the apartments will be designed keeping in mind the needs of the target group.

Commercial properties in Chennai are also fast catching up with Bangalore and other Tier I cities. Guindy Industrial Estate is getting a facelift, with ramshackle factories giving way to gleaming glass and concrete towers. The proximity to arterial roads and the airport have made Guindy a promising destination.

Ambattur in the western part of the city is slated to be the next commercial and IT hub for Chennai with Best and Compton announcing its plans for an IT Park on its existing premises on 2 million sq. ft. area. The Tidel Park on 1.28 million sq. ft accommodates the IT industry with state-of-the-art facilities.

Appreciation

Chennai figures on India's list of hottest cities for the Indian real estate market The infrastructure constraints in Bangalore are forcing the IT and ITES companies to look towards Chennai, and a steady growth of 10% can be expected in 2007. An IT corridor along the old Mahabalipuram Road stretching from Taramani and Perungudi to Padur and Kelamakkam has seen land prices escalate almost three times in less than 3 years, and a further increase of 20-25% has been pegged for 2007.

The city limits are being pushed beyond Porur in West Chennai and GST Road in South West Chennai where residential property is being sold for Rs.1800 to Rs.2000 per sq. ft. Prices have appreciated by 20 to 25 % in these suburbs, due to the IT development on the Mount Poonamallee highway.

Along GST Road, prestigious projects like the Mahindra City, Arun Excello Foundation and Shriram gateway parks prompted prices to go up by 20% since 2006. The rate of residential property in these locations is Rs. 1400 to Rs. 2200 per sq. ft.

The rentals for prime residential properties in Chennai for Poes Garden, R.A.Puram, Alwar Pet and Harrington Road are expected to climb in 2007.

NRI Real Estate Trends

As per A.T.Kearney's Indian City Services Attractiveness index, Chennai has emerged as the most attractive city for offshoring. A glance at the MNC investment profile in Chennai shows the tremendous potential the city has for real estate:

• IT Services major Computer Sciences Corporation (CSC) has announced its 4th development centre in Chennai,
• Motorola will establish a manufacturing facility on the state government's 300 acre Hi Tech zone beyond Sriperumbudur near Chennai.
• Nokia, Flextronics, Foxconn & Motorola will set up facilities near Sriperumbudur on the Chennai-Bangalore highway in the global telecom arena.
• Tata Consultancy Services (TCS) is setting up a facility on 75-80 acres of land at the Siruseri Industrial Park on the IT Corridor of Chennai which will employ about 21,000 people.
• The Institute for Information Industry of Taiwan has set up its first offshore development centre in Chennai. The facility will provide a research and development platform for software and information technology companies of Taiwan.
• BMW has signed a MOU with the Tamil Nadu government for establishing a car assembly plant near Chennai.
• Japanese mining and road construction equipment major, Komatsu group is also expected to make a bid here.
• Nokia's `Made for India' mobile handset (1100) is actually manufactured in India near Chennai.

NRIs will have no reason to look back, with the range of facilities that real estate developers in Chennai are providing. The Singapore based Ascott group has tied up with the city's Rattha Group for serviced apartments in Chennai. Ascott's choice for Chennai is based on the fact that there is a strong demand for serviced apartments of international standards in the city. Holding 40% of the stock, Ascott will promote 210 units which will be ready by 2008.

Mogappair West Extension promises to be one of the most fashionable addresses in Chennai, with the Golden Treasure project under construction. Promoted by Golden Homes Private Ltd., the residential complex will feature health, entertainment and home shopping facilities within the premises.

Rajakilpakkam is an upcoming suburb on Madapakkam High Road with stylish homes under construction by Jains Housing. The Jains Sudarsana project will comprise of 420 flats in 14 blocks of 15 floors each. To be completed by 2008, the flats are priced between Rs. 24 to Rs. 37 lakh, and offer health and amusement facilities within the complex.

Latest Real Estate Projects

An investor can choose from the wide range of projects in the city. Some of the select properties are:

Commercial properties in Chennai

• An IT SEZ by TIDCO on 25 acres on the IT corridor on Old Mahabalipuram Road will provide commercial space for a convention center and a five-star hotel.
• Hallmark Towers on T.T.K.Road, on a built-up area of about 18,800 sq. ft

Residential properties in Chennai

• An integrated township in Anna Nagar by Ozone group on a 43 acre plot, with a residential, retail, hotel, and service apartments. Equipped with the latest sports, health, housekeeping and entertainment facilities
• The oasis by Unitech off OMR on Navalur Thalambur Road. Fully serviced multistoried housing complex spread across 45 acres. Options of 2,3 & 4 bedroom apartments.
• Templeton in Virugambakkam - 2 blocks of 12 floors each by Appaswamy Real Estate Limited (AREL)
• Orchards on Arcot Road, Vadapalani - 4 blocks of 15 floors each by AREL
• Pinewoods on Inner Ring Road - 3 blocks of 9 floors each by AREL

West Hills on Reddykuppam Road, Saidapet - 2 blocks of 7 floors each by AREL