With a constantly growing real estate sector, cities such as Bangalore, Hyderabad and Chennai have found a place on the global real estate map, notes Shakthi Vairavan, CEO, MMRF Realty & Infrastructure Pvt. Ltd.
The spin in the century has brought a series of transformations for the Indian economy and influenced by this change, cities have become the focal point for future developments. As a result, the real estate sector is constantly transforming to meet the developing requirements. Even cities such as Bangalore, Chennai and Hyderabad in South India have acquired a place on the global real estate map – a standing that was restricted just to Mumbai and Delhi in the past.
The World Bank along with a number of global agencies has predicted a turnaround in India’s economy, forecasting a 6.7 per cent growth in the next year. India’s inflation and narrowing trade deficit have been improving. In particular, South India has been contributing around 22 per cent of the country’s GDP and at presenting contributing $300 billion. Cities like Chennai, Bangalore, Hyderabad and Cochin have seen a huge demand for real estate; the reason is being attributed to the number of Fortune 500 companies setting base in these cities. This has resulted in demand for quality commercial and residential spaces, which in turn results in huge employment opportunities for people from other states and thus creates a demand for real estate in these cities.
With the economy expected to improve in the wake of reforms bought in by UPA II government, things do look positive for the second half of 2013. Cities like Bangalore and Chennai have witnessed huge launches in the last two years and have some unsold inventory, thus there are a lot of options for the end customer. However, in the current scenario the residential markets in most cities in the south are driven by the end users belonging to the middle class segment. Thus, the price plays a vital role in the decision making process along with the amenities and specs and if the price is right even in a struggling market, the inventory can be sold. In general Indians save a lot and are always looking out for investment opportunities. It is also a proven belief that real estate gives the best returns.
There is an approaching requirement on office, retail and even residential space to serve the sprouting needs, leveraging economic growth. With the continued international interest in the real estate sector, and multinationals inflow in the country, real estate has begun to augment its service offerings. Design, customer satisfaction and value additions have now started to play a crucial role in urban India.
Real estate has become more organised, creating opportunities for tie-ups with international real estate organisations. Also, with the ease of funding from international players, Indian firms are imbibing international practices. This move is fuelled by synergising efforts of stakeholders, including the government, to standardise the practice and magnify standing of the real estate industry.
The central and the state governments are bringing new laws to cover the real estate sector. A welcome law will be the recent law on 51 per cent FDI in retail which will be a boon for developers as companies like Wal-Mart, IKEA and other brands will want to set up base in all major Tier I & II cities. Recently, the Tamil Nadu government, to streamline transactions of immovable properties and securities, announced its own stamp duty bill taking a cue from states like Gujarat, Maharashtra, Kerala and Rajasthan. Thus, there will be a charge of 1 per cent on construction/sale of immovable property and, similarly. for Power of Attorney the value will be 2 per cent of market value of the property for a non-family member. Thus, the effect of the law is that both the developers and the end customers will have to share these costs of registration and as a result the cost of project goes up.
Ever since it opened its gate towards a liberalised FDI domain, the Indian real estate market has been on a high growth scale. After this, the sector has seen several firms emerge as leaders and powerful brands in the industry, especially in South India. Backed by strong professional management teams, the 21st century real estate sector aims at providing housing solutions by gaining a customer’s delight through innovative methodologies like Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) where the project is completed in a shorter time span, along with successful marketing strategies.
Realty markets across the country have grown by leaps and bounds. Today, the real estate industry in South India has become one of the major investment sectors. Building and strengthening its real estate development, southern India has emerged as one of the most sought-after destinations in the country.
South Indian real estate markets that include Bangalore, Chennai, Hyderabad and Kochi have witnessed rapid growth over the last few years, driven primarily by a highly mobile IT workforce that provides a heavy influx of potential residential property buyers. This has resulted in South India emerging as the hub of IT sector and the main arm of outsourcing business for the US and the UK. With more and more foreign investors looking forward to establish their back offices through the prime locations of South India, the scope of corporate real estate has become immensely high.
The IT sector, which churns out huge power jobs for educated Indians, is the reason behind the real estate boom in South India. These jobs are indirectly helping the Indian real estate by taking it to new heights of prosperity. For companies that are looking for offshore business, India has become a favourable investment destination due to low cost of labour. In Chennai, Hyderabad and Bangalore, areas such as Oragadam, OMR, Porur, Tellapuur, Miyapur, Shamshabad, Kutatpally, Punjagutta, Jubilee Hills, Whitefield, Sarajapur Road, Kannakapura Road and Banerghatta Road have come up as lucrative real estate deals.
Supported with finance schemes and other such monetary support, consumers tend to seize the opportunity of real estate purchase. On the contrary, the residential market has been an ardent follower of the ‘affordability’ mantra. Thus, there arises a strong need for a commitment to develop world-class residential and commercial complexes that deftly combine aesthetics with the functional, and follow constructional parameters that would be a landmark in the true sense.
In south Chennai, Old Mahabalipuram Road (OMR), which begins at the Madhya Kailash temple in Adyar in south Chennai and continues till the south of Mahabalipuram in the Kanchipuram district, has geographically evolved to become the IT corridor that houses many IT & ITES companies.
This state highway is also home to numerous educational institutes and deemed universities that certify lakhs of aspirants every year towards well-designated careers. With the Chennai Metropolitan Transport Corporation running nearly 400 trips on this stretch daily, OMR comprises a budding population of information technology professionals. This in turn results in a logical influence on real estate development, with a slew of residential apartments, hospitals, supermarkets, and leading retail chains to spring up along the IT Corridor. The Tamil Nadu government recently announced the longest elevated corridor in the OMR road which is 45 km long.
I strongly believe that all real estate players, by investing in such potential locales will turn people’s dreams into reality, investments into wealth, by executing large-scale real estate projects to bring international standards for a new way of living in Chennai, bringing a further boom to the sector in South India.