The Checklist for buying plots
There has been a renewed interest in investments in plots near the peripherals of the city.Here are a few parameters you need to keep in mind while investing in a plot
INVESTMENT HORIZON
Purchasing land as an investment usually pays off only as a long-term venture,with a minimum holding period of five to ten years.
SAFE PURCHASE PARAMETERS
In general terms,it is definitely not safe to buy land without thoroughly acquainting oneself with the local market,and the legislative dynamics of that area.
Buying land situated near a housing scheme calls for extreme caution,since one may inherit the covenants and restrictions applicable to the housing scheme.
While buying a plot as an investment,one should ensure reasonable proximity to key roads and access to water and electricity.
One should also acquaint oneself with the development plan for the chosen area – this can be established from the local administrative body.
One should be very clear about what taxes one will incur and whether the plot has a permit for the raising of residential/commercial structures.Raising large structures is not an option on agricultural plots,which are cheaper and have a lower tax burden.If the plot is agricultural land,one should establish whether its status can be converted for construction purposes later on,or not.
Before any land purchase,one needs to investigate into possible multiple ownership issues and zoning restrictions.
LAND PURCHASE – ASSURED ROI
The value of a plot of land in any particular location depends on what the Government will permit to be done there,and on the success dynamics of the society in which the land is situated.
You cannot add to the value of land as you can to a structure – value derives from the dynamic community that makes the land desirable.Therefore,a plot’s value will appreciate if there are developments in the vicinity to make this happen.Sometimes,investors purchase land based on anticipated value – such as if something like a mall,multiplex or office block is scheduled to come up nearby.If the anticipated development fails to materialise,or if the location does not receive water or electricity supply,the plot will fail to appreciate.
Land will also fail to appreciate if it is in danger of being taken over by the Government.No matter how good a plot looks,or how reasonable the price is,one must check everything.
As Published in Times of India, Property Times – December 2, 2012
OMR – residential housing dearth and high demand
The Madhya Kailash-Sholinganallur belt, along the Old Mahabalipuram Road’s Information Technology corridor, is witnessing, along with immense commercial growth, an incredible dearth of residential property. This is pitted against a strong demand for the same. ANIRUDH BELLE attempts to take a closer look
Within the next two years, according to studies conducted by Marg Properties Private Limited, the employment figure along the Old Mahabalipuram Road (OMR) is expected to grow from 1.60 lakh to a little more than three lakhs. The belt between Madhya Kailash and Sholinganallur, along the OMR, being the most concentrated phase of the Information Technology (IT) corridor, is witnessing an obvious over plus of demand for residential property. However, with just about 17 well-defined residential projects, the availability of residential units in the area barely corresponds with the shooting requirement for the same, bringing into picture a marked demand supply disparity.
“Till the beginning of 2005, OMR didn’t really boast of a plausible social infrastructure; there was not much of an incentive for developers to pursue largescale residential projects in the area,” says Sivaramakrishnan A S, Vice President, Residential Services, Jones Lang LaSalle (JLL), “The IT boom, between 2001 and 2007, encouraged IT firms from across the country, and the world, to set up office on this belt.” In addition, the Government of Tamil Nadu, in order to propel the growth of the IT sector in the region, increased the Floor Space Index (FSI) to around 3.75, roughly 1.5 times the prevailing value, for IT-related development projects on certain portions of the belt; the incentive to build commercial property augmented even further.
“From 2002, with IT projects dotting the belt between Madhya Kailash and Sholinganallur, the availability of land in the region started to rapidly deplete, thereby leading to a pronounced scarcity of the same,” he adds. The scarcity of land immediately translated into a visible escalation in its prices.
As a result, developers started facing marked impediments in supplying residential property to the region. “The exorbitant land prices have hiked the cost of pursuing residential projects and this has significantly discouraged most developers from supplying residential property in this belt,” says Ramakrishnan S, Chief Executive Officer, Marg Properties Private Limited. Also, the demand drivers in the belt consist primarily of the many IT and corporate professionals in the region. “Given that the price of land is high in this belt, those who plan to build residential units here are bound to sell it at equally high rates. Since these rates may not correspond with the price bracket that is being primarily demanded in the region, (between 30 and 75 lakhs), supplying adequately large residential units at affordable rates in the region will not yield a profitable outcome for the developer,” says N Ravichandran, Chairman, True Value Homes (TVH), who has a project called Svasthi on the Thoraipakkam region of the belt. Mehul Doshi, Director, Doshi Builders, the initiator of three more residential projects along the belt, adds, “As developers, if at all we manage to build residential units in this region, we have to cut down on the apartment sizes, thereby attempting to make the units slightly affordable to the bulk of our customers.”
The consequences of under-supply of residential property in the region are quite far reaching.
According to Marg Properties, there are just about 4,000 dwelling units in the belt between Madhya Kailash and Sholinganallur as opposed to a little less than a lakh of individuals, and their respective families, demanding residential property in the area. “The excess demand has caused the residential property prices in the belt to follow an approximated spectrum of values,” says Sivaramakrishnan, “The prices near Sholinganallur, which is further away from the city, are between 3,200 per sq ft and 3,500 per sq ft, roughly 4,000 per sq ft near Perungudi and can even go up to a bracket as high as between 9,500 per sq ft and 10,000 per sq ft near Madhya Kailash, which is closer to the city.” For instance, Prapancha, a residential project by Aishwarya Constructions at Thoraipakkam, sells its units at around 4,250 per sq ft.
Since the rampant demand for dwelling units between Madhya Kailash and Sholinganallur cannot be satiated, it has eventually spilled into areas beyond Sholinganallur, where the availability of land is adequate and where property developers receive an over-THE GREAT OMR PROPERTY DIVIDE
whelming incentive to supply residential property. As a result, depending upon the age of the project, the residential property rates in this region span between 2,500 per sq ft and 3,100 per sq ft. “With coastal regulations preventing development towards the extreme right of the Madhya Kailash-Sholinganallur belt due to the presence of the Buckingham Canal, and with low social infrastructure in regions towards its left, many developers have responded to the belt’s residential demands by building property in areas beyond Sholinganallur – like Semmencherry, Navalur and Siruseri,” says Ajit Chordia, Managing Director, Olympia Infrastructures. “The increase in residential development beyond Sholinganallur has really helped in boosting the region’s social infrastructure. Three schools – namely Hiranandani Upscale School, PSBB Millennium School and Bala Vidya Mandir – are planning to establish themselves in the area in the near future. In the realm of social infrastructure, multiplexes like the Riverside Mall, (initiated by Marg, and allied enterprises) for instance, are quickly sprouting in the region, making it a more independent and significant entity on the city’s map.”
Although it is unfortunate that the supply for residential property in the Madhya Kailash-Sholinganallur belt is not adequate to meet the consumer demand in the region, a seemingly satisfactory solution has been arrived at in areas beyond Sholinganallur. Moreover, the demand-supply mismatch has implicitly caused less developed areas on the OMR to drastically develop their infrastructure. “At the rate at which the property market is pacing in OMR, it is only a matter of a few years till it transforms itself into a developed adjunct of the city, just as Velachery did a few years ago,” says Sivaramakrishnan.
Property Times, Times of India 12 March 2011
Chennai Realestate 2011 outlook
RESIDENTIAL REAL ESTATE:
The outlook for Chennai’s residential property market remains positive in 2011. This is a stable market, and the prices have risen rationally in tandem with normal market trends. With the IT sector on the upswing and job security once again strong, Chennai’s residential real estate market will see accelerated demand in 2011.
So far this year, property pricing has improved by 20-25%% within city, by 10-15 % in OMR and by 1-5% in select pockets of GST and Sriperumbudur. Overall, 2011 is going to be year of optimism for residential real estate in Chennai.
We have witnessed preferred flat sizes reducing from 1700-2000 square feet to 800-1300 square feet over the last two years. While pricing stabilized in sync with the market, pricing gradation in projects themselves was more gradual, with 3-4% at the launch to 90% at the completion stage. This unlike the trends seen earlier, where price movement was more rapid and illogical. Year 2009 was the year of affordable housing in Chennai, with a number of projects being launched in Rs. 20-30 lakh band.
One major issue for residential real estate activity in Chennai has been the lack of social infrastructure in peripheral business districts (PBDs) even as housing in the central business districts remained unaffordable. The lack of social infrastructure in the PBDs is hurting both absorption and positive price movements.
COMMERCIAL REAL ESTATE:
2011 has already begun ushering in renewed interest in commercial office space in Chennai – especially from firms wishing to relocate their offices to better Grade A buildings. The expected fresh supply of commercial office space should bring about active absorption at the right rentals.
In terms of IT office space, OMR remains a favoured destination, with most of the absorption expected before the toll plaza because of easier and more cost-effective commuting. There will be greater demand for Grade A office spaces within the city, since there is a severe dearth of high quality office buildings in the central areas.
Attractive rentals will drive demand for office real estate in projects after the toll plaza. Vacancy levels will plateau our, and rentals will remain favourable to tenants through the third and fourth quarters of 2011.
Meanwhile, occupiers will continue their beeline to SEZs to capitalize on their benefits before the approaching STPI sunset clause. Projects closer to the key areas will be in demand, and great emphasis will be laid on operational facilities, rigorous adherence to construction timelines and the availability of incubation space.
Over the last couple of years, we have been observing a trend of relocation to peripheral business districts by corporate occupiers who want to gain rental advantages and avail of better facilities. There is now greater availability of smaller, older Grade B-C office spaces within the city, and there is an increasing drive towards rehabilitating older buildings.
Certain measures are required to augment commercial real estate activity in Chennai:
- A more transparent tracking system of the planned infrastructure
- A greater focus on upgrading the public transport systems to offset road traffic
- Assigning of specific zones for commercial, retail and residential use, and
- Ready availability of information on residential density in catchments to the public
RETAIL REAL ESTATE:
Chennai’s organized retail real estate market is definitely improving, with inquiries from major retailers on the ascent. Many new retailers are also planning to enter the Chennai market. The 2011 outlook remains bullish on retail real estate growth; however, supply remains a challenge.
The last couple of years have seen new retailers entering the Chennai market at reasonable real estate occupancy costs. The coming two years will see a spurt in the growth of standalone shopping centers and built-to-suit proposals.
Currently operational malls in Chennai:
- Spencer’s Plaza: 559000 sq ft
- Ampa Skywalk: 350000 sq ft
- Chennai Citi Centre: 325000 sq ft
- Express Avenue: 850000 sq ft
The proposed malls include:
- Forum Vijaya Mall: 700000 sq ft
- Marg Junction: approx. 550000 sq ft
- Market City: 1.2 million sq ft
- Spectrum: 180000 sq ft
- Ramee Mall: 180000 sq ft
Badal Yagnik, Managing Director – Chennai, Jones Lang LaSalle India
Chennai to be slum free?

Shangri-La in Chennai – Asia’s most luxurious hotel group
It more entertainment, leisure and luxury at the MARG Junction. The mall, which is to be the first of its kind to come up at the strategic location at OMR – the IT corridor of Chennai, has announced its tie-up with the Shangri-La Hotels and Resorts, one of Asia’s leading luxury hotel groups.
It has signed a management contract with Riverside Infrastructure (India) Pvt. Ltd., a subsidiary of MARG, to operate Traders Hotel, Chennai, scheduled to open in early 2012 at MARG Junction.
Located in the middle of Old Mahabalipuram Road as part of the MARG Junction Mall, a multi-use complex, the hotel will be equidistant to both Madhya Kailash and Siruseri IT Park. The development will include a mall, office block and the 246-key hotel along with 52 service apartments. One unique feature of the complex is a perennial river flowing across the entire northern side of the mall, offering customers a view and respite during shopping.
“The addition of Traders Hotel, Chennai complements our portfolio of hotels in India – Shangri-La’s Eros Hotel, New Delhi; Shangri-La Hotel, Mumbai, due to open in 2011; and Shangri-La Hotel, Bangalore, scheduled to open in early 2012,” said Greg Dogan, Shangri-La’s President and Chief Executive Officer. “Traders caters to today’s business and leisure traveller, who is looking for simple, efficient, down to earth functionality presented with a smile.”
Commenting on the association, Mr. GRK Reddy, Chairman & Managing Director, MARG Ltd. said, “It gives me great pleasure to be associated with Shangri-La Hotels and Resorts. MARG Junction Mall was created with the purpose of providing world-class amenities to our valued customers and the addition of Traders Hotel, Chennai will add to the value quotient. It gives me great honour to bring this brand to the people of Chennai, and I strongly believe that the association will get stronger in the future.”
Guestrooms are designed to be modern and will reflect a classic yet contemporary style combined with local cultural influences. Wireless and broadband Internet access will be available in each room to meet the needs of business travellers. The hotel will provide four dining and entertaining outlets including a café, a speciality and an all-day dining restaurant as well as the lobby lounge for light refreshments. Meeting and banqueting facilities will offer over 2,236 square metres of function space. A health club, spa with beauty salon and 25-metre outdoor pool will complete the public facilities.
Supply-demand gap in housing – chennai

Affordable housing – out of reach?
The affordable housing market is evolving but it has its share of problems.Issues like land availability,pricing,finance and regulatory concerns have affected the supply of affordable houses.
According to NUHHP (National Urban Housing and Habitat Policy) 2007,an affordable house is defined as,”a dwelling unit having super built-up area not less than 300 sq ft for EWS (Economically Weaker Sections),500 sq ft for LIG (Lower Income Group) and between 600 and 1200 sq ft for MIG (Middle Income Group) available to the end user at a price that permits home loans in monthly installments,which should not exceed 30% – 40% of a person’s monthly income.
“However,affordable housing continues to be an elusive dream,especially for those in the EWS and LIG categories.Why is there a problem in terms of supply and implementation of affordable housing schemes P Suresh, MD, Arun Excello, believes that the biggest impediment to construction of affordable housing projects is the non-availability of land. He says, “It is impossible to find land at appropriate locations at affordable prices.Where can you find land at a cost of less than 1 crore per acre. This is a big deterrent as land price accounts for more than 40% of the cost of the project.”It’s not just availability of land that we are talking about here. As Kumar Gera,Chairman,CREDAI (The Confederation of Real Estate Developers Association of India) points out,”Well-connected,accessible land with title and infrastructure needs to be provided on a regular basis. Only then can developers provide affordable housing in the real sense of the word.”
In cities,in particular,land availability is a bigger problem. According to a report by McKinsey Global Institute (MGI),India’s urban population will soar from 340 million in 2008 to 590 million in 2030.How will the housing demands of the population be met with Sample this: 23% of India’s urban population resides in eight cities.If the housing shortage (of 26.53 million housing units) is to be addressed effectively,at least three million housing units must be added to the cities,every year.Instead,only 0.3 million housing units are being added in the existing cities.Urban land expansion is,therefore,the need of the hour.
As per the estimations given in the Second Master Plan,of the total housing demand of 12.38 lakhs,the demand for EWS and LIG housing will touch 3.71 lakhs and 4.33 lakhs respectively by 2026.More than 90% of those affected by the shortage in housing are from the EWS and LIG categories,for whom an affordable house would fall in the range of 4 lakhs to 7.5 lakhs. Most developers however continue to cater to the niche market that serves about 5-10 % of the population. As P Suresh points out,”Promoters are averse to handling more number of clients;in an affordable housing project,for instance,it’s a volume game. You need to provide a large number of housing units,as opposed to a luxury project where you deal with very few clients and big spaces.”
Coupled with this is the problem of financing affordable homes.To offset this problem and deliver financial assistance to the poor so as to enable them to purchase their own homes,the Central Government has instituted the ISHUP (Interest Subsidy Scheme for Housing the Urban Poor) scheme all across the country.”This scheme gives EWS households a subsidised loan for a period of 15-20 years for a maximum amount of 1 lakh. LIG households can avail of a loan of upto 1.6 lakh but the subsidy is not applicable for the remaining 60,000.The subsidy is 5% pa on interest charged and is deducted from the loan quantum right in the beginning,”says Dharmendra Pratap Yadav, Managing Director,TNHB.
Times of India epaper, 27 November 2010
Residential real estate sector a favorable asset class going forward
Residential Sector: The residential sector has proven to be the most resilient through the ups and downs of the previous financial crisis and the slowdown thereafter. Most of the demand drivers for real estate in India eluded to in the above paragraph such as rise in income levels, nuclearization of families, penetration of cheap home financing (yet no where near sub-prime conditions as was witnessed in parts of the western world) etc. are actually playing out in reality across various Tier I and Tier II cities in India. According to market data from PropEquity, almost 90% of all residential product that is built across major Tier I and Tier II cities in India (including Mumbai, NCR region, Chennai, Bangalore, Calcutta, Hyderabad, Pune and Ahemdabad) is sold. Furthermore almost 65% of all residential product that is currently under construction has also been sold (pre-sales)! Such high levels of sales and absorption bear testimony to the fact that the investment opportunity in the Indian residential real estate sector is actually quite real and will most likely continue as long as the demand drivers remain intact. Ofcourse, pricing does tend to be cyclical in nature as typically whenever sale volumes increase, developers leave no stone unturned in raising their prices. Subsequently, a noticeable increase in price then deters the home buyer from making purchase decisions leading to a decrease in sale volumes. And finally once developers realize that their sale volumes have dried up, they reluctantly drop their prices or offer clever financing schemes to lure the aspirant home buyer thereby once again kick starting the buying frenzy. While such cyclical movements in prices will continue to play out in the future as well, structurally atleast, the residential real estate sector in India will remain a favorable asset class going forward.
Excerpt from : Reality Check and Assets Classes for the future (25/11/2010) - VCCircle http://www.vccircle.com/500/news/reality-check-asset-classes-future
The Green Mile – Green Buildings
Although several IT buildings are gradually joining the green brigade,the longevity of these buildings depends,to a large extent,on its maintenance.The big question then is: if sustainability is the way forward,how can a green building retain its character in the long run Radhika Ramaswamy explores
The words green and sustainable have come a long way in the context of real estate in India.Several large corporations and IT buildings across the country are realising the need to consume less energy and develop energy-efficient systems and processes.The challenge,however,lies in the sustenance of these processes in the long run.As Deepa Sathiaram,a city-based green consultant points out,”Right from efficient light fixtures,air-conditioning systems and sensors to metering equipments,green buildings use a lot of technology and sophisticated equipments.”These systems are adopted in the construction phase,as per the Indian Green Building Council (IGBC) guidelines.If all the guidelines are met at the design and construction phase,the building receives LEED (Leadership in Energy and Environmental Design) certification.”Designing a green building is not as difficult as maintaining it.In the initial stages,green consultants are directly involved in the design and implementation of the processes;but after a year,everything is handed over to the facility managers of the building.This is when we face problems with respect to sustainability in operation and maintenance as well as occupancy usage,”says Deepa.
Builders should look beyond just certification and start seeing value in energy-efficiency and power consumption.Ajit Chordia,Managing Director,Khivraj Tech Park,the first green building in Chennai,says,”One shouldn’t rest in the laurels of having received LEED certification.There is a need to constantly upgrade and bring in new technologies to the fore.This will also e n – sure constant occupancy in the building.”
According to S Raghupathy,Director of IGBC,Hyderabad,”Since the concept of green buildings is a choice rather than a compulsion,only people who really see value in it come forward to invest in a sustainable project. This is why 99% of the green buildings have proposed requests for re-certification.We conduct regular audits and have installed monitoring systems in all the IT buildings that are LEED-certified.”The challenge for IGBC,as Raghupathy points out,is in ensuring that skilled people are roped in,to take this movement forward.”We are looking at roping in over 5,000 skilled developers and architects;we also plan to reduce the cost of the construction of green buildings by 5%,”adds Raghupathy.What architects and builders sometimes forget is the fact that sustainability has always been integral to the ancient architecture of the country. Kishore Pannikar,a citybased architect says,”There are so many elements from traditional Indian designs that can be incorporated in the modern-day construction of IT buildings.Instead,in the name of opulence and sophistication,several modern machineries,processes and equipments are being built across large IT spaces which are hard to operate and maintain.That apart,glass,that takes in a lot of heat (and which is unsuitable for Indian climate),is used haphazardly across IT spaces.In many ways,we are creating problems and then solving them. Instead,intelligent and sensible use of materials and equipments can facilitate maintenance of systems.
Absence of policies and lack of government intervention in the green building domain is another reason for disinterest among builders in terms of construction or maintenance.Rajkumar Reddy,Managing Director,Vishranthi Homes,that has built around four IT parks in the city,says,”One of the projects that I have built is green in every sense of the word but somehow I do not want to apply for certification,simply because it does not make any difference to me.Unless green buildings become a policy or a regulation initiated by the Government,it will never go forward.The Government should provide premium and subsidies;otherwise,green buildings will never see the light of day in IT spaces.
Times of Inida, property times, 13 Novermber 2010