Investment insights of

CHENNAI PROPERTYInvestment insights of

CHENNAI PROPERTY

INVESTMENT INSIGHTS OF CHENNAI PROPERTY

CHENNAI 1.0

Madras in the 1600s was a cluster of scattered hamlets, each settlement having grown around a temple as its

nucleus and with its own unique history. Mylapore was by far, one of the most prominent areas of the time.

Around 1733, the congestion in George Town, a business hub led to the weaving community migrating to

Chintadripet and Collepetta near Tiruvottiyur, since abundant open space was available for their trade.

Triplicane also grew in importance, but second only to George Town. St. Thomas Mount

grew in its religious significance, and Mount Road became prominent with the construction of the Marmalong

Bridge in 1724. Once the Corporation, the civic body that governs Chennai as we know it today, was

established, the city was divided into 8 divisions and the Government selected 4 Commissioners from the

resident communities. The railway line from Royapuram to Arcot was laid in 1864. To facilitatetrade, the

harbour – strategically positioned to the east of George Town – was completed in 1896. Some of the important

milestones during the period 1901 to 1941 included the commissioning of the electrified suburban meter-

gauge railway line between Beach and Tambaram in 1931, giving a fillip to the development process of

suburban areas, and the development of the area occupied by the long tank at Nungambakkam as a planned

residential neighborhood by the Corporation.

The population of the city rose to 8.6 lakh by 1941. The city occupied an area of about 80 sq.km.

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CHENNAI 2.0

CHENNAI 3.0

From a macro-level perspective, the growth of the city of Chennai has been predominantly focused in its

southern and southwestern areas, thanks largely to the new developments on East Coast Road, Old

Mahabalipuram Road and other regions of excellence like Sriperumbudur that have attracted many foreign-

based companies to set up shop here. The rapid pace of growth has led to a corresponding but serious

demand for better intra-city transportation to help people commute between their places of work and

residence. Besides, the economic boom has resulted in an increased demand for urban space, leading to

skyrocketing land prices.

Urban Node 1 – Madurantakam: Kancheepuram district, well-known for its temples and silk Sarees is located

on the north-eastern coast of Tamil Nadu. Spread over a total geographical area of 4,43,210 hectares and a

coastline of 57 km, the district is divided – for administration purposes – into 3 revenue divisions comprising of

8 taluks with 1214 revenue villages. To facilitate development, it is divided into 13 development blocks with

648 village Panchayats. Madurantakam is one of the taluks of Kancheepuram and is located towards the

southwestern part of the district. According to 2001 census figures, Madurantakam taluk had a total

population of 254,845, about 9% of the total district population.In terms of its prospects for future development, Madurantakam has been identified as one of the potential

urban nodes, thanks to its connectivity by road and rail with various districts in Tamil Nadu and Puduchery

Union Territory.

Urban Node 2 – Sriperumbudur: Another taluk in Kancheepuram district with a total population of 316,918,

Sriperumbudur has already seen a number of big-ticket investments both from the State andCentral governments, as well as multinational companies. Towards strengthening various sectors such as

housing and health among others, more investment is required in this urban node.Additionally, the State government is also focusing its attention on improving the road sector in theregion.

Urban Node 3 – Tindivanam: A municipality town in the Villupuram district of Tamil Nadu, Tindivanam taluk

had a total population of 413141, according to the 2001 census. This has also been identified as one of the

potential urban nodes for development, being strategically connected by road and rail withseveral districts across Tamil Nadu and Puduchery Union Territory.

Urban Node 4 – Arakonam: One of the taluks in Vellore district, the 2001 census pitches Arakonam total

population at 459,643 persons. Agriculture is the predominant occupation; however a superior road and rail

network connecting the taluk with districts in Tamil Nadu and Andhra Pradesh has encouraged heavy

industries to set up base in and around Arakonam.

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The five urban nodes of Greater Chennai: Metro cities in the making

Urban Node 5 – Ponneri: Part of Tiruvallur district, Ponneri taluk has a total population of 331,406 (2001

census figures), about 12% of the district’s total population. Ponneri is situated close to the Ennore port, and

the backwaters around it can be developed from a tourism perspective. Besides, the State government has

focused its efforts into improving the infrastructure in the area.

CHENNAI – OVERVIEW

GROWTH CORRIDORS OF CHENNAI

Chennai, the capital city of Tamil Nadu, is spread over a total area of 1,177sq.km.(metropolitan area) with an

estimated population of approx. 8.66 million in 2010. The physical infrastructure of the city is fairly well

developed with reasonably good roads, railways, air and sea transport networks. Chennai‟s airport provides

both domestic and international connectivity and is located off GST Road, and 16 km from the city center.

Chennai is the third largest commercial and industrial centre in India, and is known for its cultural heritage and

temple architecture. The city, known as the „automobile manufacturing hub‟ of India, is a preferred

manufacturing destination with over 35% share of India's automobile industry. According to a survey by Cyber

Media and Tholons, Chennai is one of the 6 cities from India and one in top 8 cities in the world featuring in the

emerging outsourcing destinations.

Chennai serves as the manufacturing base of large multinationals like Ford Motors, Hyundai, Saint-Gobain,

Nokia and Flextronics. It is also home to IT/ ITES majors like Infosys, Wipro, Polaris, Accenture, I-Flex, TCS,

Cognizant and many more companies.

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Chennai City may be divided into above corridors based on homogeneous industries in and around the area.

The above map highlights the key growth corridors of the city:

a. The IT Corridor

IT Corridor is a major road in suburban Chennai, India,

beginning at the Madhya Kailash temple in Adyar and

continuing south till Mahabalipuram, ultimately merging with

the East Coast Road. This is popularly called as the 'IT

Corridor' because this stretch has become home to many

IT/ITES companies.

The IT Corridor Project is being implemented in two phases – Phase-I(20 km) between Madhya Kailash

Temple Junction and Siruseri, and Phase-II(26 km) between Siruseri and Mahabalipuram. The 2.1 km long

ECR Link Road connecting IT Corridor at Sholinganallur and East Coast Road at Kudumiyandithoppu is also

included in Phase-I. As part of the Phase-II, two bypasses would be provided in Kelambakkam and

Thiruporur. With the commissioning of Phase I, the travel time from Madhya Kailash to Siruseri has been

reduced by half an hour.

The prestigious TIDEL Park is home to a number of BPO and IT/ITES companies. Almost all major IT/ITES

companies like Satyam Computer Services, HCL Technologies, Tata Consultancy Services, Accenture India,

TECCI Park, Wipro Technologies, Cognizant Technology Solutions, Scope International, Photon Infotech,

Polaris Software Lab, and Infosys are situated along the IT Corridor. Prominent Government Institutes and

technical/ educational institutions are also situated along the Corridor. The corridor stretches from Tidel Park

in Tharamani to SIPCOT IT Park in Siruseri. All IT bigwigs like Infosys, TCS, CTS have their own facilities in

the It corridor.

Besides, Small Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT) has developed a Cyber City,

spread over 2000 acres (8 km²) in Siruseri, abutting the IT Corridor. A number of IT/ITES Companies are in the

process of setting up their facilities in the Cyber City

The burgeoning population of information technology professionals is having a logical influence on real estate

development, with a slew of residential apartments coming up along the IT Corridor. The total investment in

such projects in this area is estimated at a whopping Rs 550 crore. There are currently about 70,000 people

employed in the IT and BPO companies along this corridor alone. The impetus for real estate development

has come from projections that about an additional one lakh people will be employed in the IT belt in the next

one to two years.

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b. Mixed Corridor

GST Road is one of the first roads on the outskirts of the city to witness

development many decades ago. Better road and rail connectivity, proximity

to airport, availability of water in plenty in many of the localities have made

people opt for residential accommodation near GST Road.

The workforce of the industrial belt at Maraimalai Nagar, Padappai and Oragadam areas finds living along the

GST Road more convenient than in localities near their workplace. The areas had witnessed a flurry of

construction activity in 2006 and 2007, leading to an increase in the availability of housing stock.

GST road is a preferred destination for middle class families who continue to opt for residential

accommodation.

c. Manufacturing CorridorSriperumbudur, which is also known as Detroit of India has seen rapid industrialization, attracting huge

investments due to its proximity to Chennai port, infrastructure growth, establishment of STPIs and SEZs and

availability of quality manpower.

Hyundai was one of the initial investors when they established their Indian car operations in 1999 in

Sriperumbudur. Later, Saint-Gobain and Nokia, Ford, Hindustan Motors, Mitsubishi, BMW and lately Nissan

set up operations turning this Chennai suburban town into a large scale industrial hub. As of 2008,

Sriperumbudur is a special economic zone with more than $2 billion invested by companies like Flextronics,

Foxconn, Jabil, Dell and Samsung. The town is also regarded as India's answer to Shenzhen, China,

although it is not yet a SEZ. Every month, Sriperumbudur corridor is often reported in the news for some new

industrial projects. The industrial corridor between sriperumbudur and oragadam is rapidly developing with

plenty of apartments by giant developers.

d. Warehousing & Supply Chain Corridor

The NH-5 & TPP Road being strategically located in good proximity to the sea port and railway station is an

established Logistics & warehousing corridor in the city. Logistics traffic by road has been growing at a

compound annual growth rate of 7.5%. Key Logistics & Warehousing functions include transportation,

Freight-Forwarding, and some value-added operations like Management of Information Systems (MIS).

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1. Real Estate Investment Options

Property Investment is the talk of the day as it offers better returns on

investment than any other investment option. Residential properties in

particular are certainly rewarding than any other property investment

opportunity. There are several options in the market that are equally

rewarding as the residential properties. Alternatives include

Residential and Commercial plots and Commercial office space.

Commercial retail space is one option which can be decided depending on the location and builder. Ÿ This option offers little rental appreciation. Ÿ Investments in these avenues are huge and remain blocked for a while as a result of which you may not be

able to exit.Ÿ The commercial properties may require modifications since companies look for ready to move propertiesŸ May not be suitable for most of the property Investors because of the ticket size – Not a viable option

Residential plot is the best option for property Investment because of the following reasonsŸ Buildings Depreciate over a period of time, while Land only appreciates”Ÿ The lifestyle of living in apartments can’t match the lifestyle of living in an own piece of exclusive land &

houseŸ Purchasing a piece of land and constructing your own house is always a cheaper and better option. We

can construct our houses according to our own tastes and requirements. Where as in apartments, its only

compromise!!Ÿ Plots and Independent houses have always had better appreciation than apartmentsŸ Plot owner will have redevelopment rights on his property. On the other hand, in most group housing

projects, apartment owners do not have this kind of right.

Residential Apartments

Corridor Name Profile of the people Living Standards Cost of Property

IT Corridor IT professionals, white collar employees and Students

Good Road Connectivity, Serenity, Rich living conditions

Most expensive and highly appreciating land parcels than any other corridor of Chennai

Mixed Corridor Mix of white Collar & blue collar employees. Includes some of the IT companies

Good Road & Rail Connectivity. Mixed bag living conditions with all economic sections

This corridor is next expensive corridor after IT corridor. It is also considered as a very hot

destination for residential investments

Manufacturing Corridor

Blue collar employees with very little percentage of expats & white collar employees

Good Road Connectivity. The area is dominated by blue collar employees since it is a manufacturing corridor

This corridor is next hot destination for residential property after Mixed Corridor

Supply Chain & Logistics Corridor

Transporters, Blue collar employees

Good Road Connectivity. This corridor has lowest property prices. Scope for land appreciation is also

very less

COMPARATIVE CHART OF CHENNAI’S CORRIDORS

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2. The benefits of living near recreational areas

If given a choice to live in a crowded, noisy street or near a peaceful, green park, you would instantly pick the

second. And you would be right. After all, who would not want to live near a lush, pleasant Park or Recreational

Area?

There are innumerable advantages of living near a green zone. Recent studies have shown that people living

near Parks and Recreational Areas are more active. Living near an open green space encourages people to

walk around more, ride bicycles and such people are less prone to obesity and weight issues. The presence of

green zones and parks nearby reduce the green house effects and offer a natural unpolluted environment

which is beneficial for your body and mind. This is applicable to children, teenagers and adults. The presence

of a green and healthy environment like a park or a Recreational Area has positive effects on the mental level

as well. People living in the vicinity of parks are more relaxed and show less signs of stress and worry.

If your house is located near a park, then your property will have an ‘Increased Market Value’. The value will

depend on a variety of factors like the size of the park, distance of the park from your property, details of the

neighborhood etc. Such locations have economic advantages to the municipal or civic governments too.

People living near parks enjoy many economical benefits that are unknown to urban residents.

A house that has a beautiful and peaceful park nearby will immediately grab the attention of prospective

clients if the property comes on the market. People are always looking for a house that is an ideal retreat from

crowded and noisy streets.

The advantages of living near a park are countless, enabling anyone to effortlessly answer the above

mentioned question. A house near a lush green park with fresh air and zero pollution is everybody’s dream

and you should definitely keep these points in mind when looking for properties in the market.

3. A must process to go through before purchasing a plot

When we think about Property Buying in Chennai, the first thing that comes to mind is the reliability of the deal.

Everyone wants to make sure that they only get the best Property Deal, so as to ensure that their hard-earned

money doesn’t go in vain. Indeed, most of us have worked our lives out, saving the money only to buy a dream

property. And when the opportunity comes, you can get deceived of all your savings without having the faintest

idea of what exactly happened. In order to avoid such unfortunate situations, we need to go through the

following process.

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Step 1:

Step 2:

Step 3:

Step 4:

Step 5:

Step 6:

Research, Research and Research

Identify Potential layouts in the narrowed down areas

Visit the layouts personally and see the appreciation value with your eyes

Show and talk to your family and known circles

Collect the documents and take a legal opinion from Advocates

Negotiate and make a deal

Do extensive research on growth corridors of your city. There are many reports/articles available on internet

on very high potential growth corridors. After decent amount of research, you could able narrow down few

pockets, which are suitable to your requirements based on your working/living area.

Once again thorough research is the mantra. The best option is to stick to reputed promoters. Even though

reputed promoters might be bit expensive, their adherence to fulfill the promises to safeguard their brands is

always a safe bet. After all, it is a life time investment.

No matter how much research we do on the internet, it may not help us to understand the potentiality of the

area. A physical visit is what all is required. Traveling to nearby places of the layouts will give you the brief idea

of possible returns. Also, direct interaction with the nearby community will give you more insights on the

particular area

Before making a decision, Show the place to your family members and know circles and take their opinions.

The idea is to make as much noise as possible. You will come to know about any misrepresentations if any by

doing this.

4. Why to purchase from a reputed promoter?

Every Indian wants to be the owner of his or her piece of land or plot. However, it is essential to know about the

promoter of the property. There are number of cases of fraudulent/misrepresentation in Indian real estate

transactions. Just finding the right location or layout is not enough; one needs to be very careful with the seller

since there are numerous ways to cheat the purchaser. It takes a complete background check on the

seller/promoter before completing a clear transaction. Following are some of the reasons to purchase

property from a reputed promoter.

Reputed promoters will have an obligation to fulfill the promises committed while selling the property Big players spend more time, money and efforts to continuous search for better locations which have bright

future prospects in terms of living conditions and return on Investments etcA small case on a reputed player may end up with huge compensation to the end user. Ultimately resulting

in clean and better transaction with the end user Reputed promoters spend crores of rupees on brand building. They won’t take the chances of spoiling the

brand equity by providing an ill deal/transaction Reputed players will always have better deals while purchasing land parcels. This sometimes helps them

to offer a better deal than the small time players

1.2.

3.

4.

5.

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6. Superior amenities and facilities such as club house, roads, maintenance, security, blacktop roads and

street lights are only possible with reputed players7. Most of the small time layout promoters sell the amenities earmarked plots, which belong to the entire

association of the layout. This may not be the case with reputed promoters8. Dealing with professionals is always better than dealing with non-professionals. It offers peace of mind

while going through the transaction process Though it might be a bit expensive proposition dealing with reputed promoters, it offers clean, transparent and

happy transaction. After all, it is a once in lifetime investment.

5. Documents to be kept ready before approaching for a loan

The first step to acquiring a property for any salaried person is to apply for a land/home loan. There are some

documents that the banks or other financial institutions ask for before sanctioning Home Loans. The following

papers with completely filled Application Form need to be submitted:

1. A Photo-Identity ProofŸ Driving licenseŸ PassportŸ PAN CardŸ Ration CardŸ Letter from a recognized Government authority

2. Income Proof for Self employed IndividualsŸ Brief description of business Ÿ Papers of Tax Returns Ÿ Registration Papers Ÿ Copies of balance sheets

3. Income Proof for Salaried IndividualsŸ Pay slips Ÿ Appointment letter Ÿ Taxation documentsŸ Documents Required While Buying A Home:

There are a few papers that you must collect from the seller before signing the deal to buy a property. These

documents ensure that you do not get cheated. Also it is intelligent to get these documents checked by

professional experts such as advocates or land consultants. The list of the documents includes:1) The Original Property Agreement Document2) Property Title3) DTCP approval copy or CMDA approval4) Site layout copy5) Commencement certificate (issued by the Municipal Corporation of the area)6) Chitta/Patta/Adangal

The best way to complete the paperwork on time is to take assistance of reliable Placement Advisors. There is

no dearth of Property Agents that offer assistance to people. However, one should conduct an online search

properly and rely on a company that has a unique online identity and maximum visibility on internet

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It is a dream for any Indian to buy a piece of land in India. Infact, most of the property investments are by NRI’s.

Traditionally, Indians are found of owning a piece of land. Indian laws, over the years, have changed to

accommodate NRI’s aspirations to own a piece of land. The Reserve Bank of India regulates all the property

transactions and all such transactions also fall under the purview of Foreign Exchange Management Act

(FEMA).

The definition of NRI according to FEMA is an NRI is a citizen of India who is resident outside India. A non-

resident Indian can buy either a residential property or a commercial property in India. Also, An NRI can

purchase any number of residential or commercial properties. But, there is a small restriction that an NRI

cannot buy agricultural land, plantation land or a farm house in India. He cannot even acquire such property

as a gift. One small exception is an NRI can inherit such property.

NRI’s can pay for these transactions either by way of funds remitted to India from abroad through regular

banking channels or through the balance in the NRE, NRO or FCNR Account. For such transactions, NRI’s

need not have to take permission from RBI.

According to the Indian Income Tax Act, If Any person (resident or NRI) owns more than one house property,

only one of them will be deemed as self-occupied. There will be no income tax on a self-occupied property.

The other one, whether you rent it out or not, will be deemed to be given on rent. If you have not given the

second property on rent, you will have to calculate deemed rental income on the second property (based on

certain valuations prescribed by the income tax rules). The same rule applies even if the NRI holds two

houses in two different countries. For example: If an NRI is a resident in USA and lives in his/her own house in

USA and owns a house property in India, he is liable to pay income tax on the deemed rent amount to Income

tax department. The deemed rent is determined by certain valuation rules prescribed in the Income Tax Act.

Even the inherited property attracts the Income tax on rent received.

NRI’s can also access property loans for a buying property in India. According to Reserve Bank guidelines,

the NRI can avail loan amount of up to 85% of the transaction. They can repay loans through normal banking

channels.

6. NRI's guide to buying Property in India