The Hindu : Tamil Nadu / Chennai News : GST Road sustains rental values ReAlty CHECK

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Tuesday, Mar 10, 2009
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Tamil Nadu

Tamil Nadu - Chennai

GST Road sustains rental values ReAlty CHECK

Aloysius Xavier Lopez

— Photo: A.Muralitharan

Locational advantage is the main reason for people seeking houses near GST Road.

CHENNAI: Even as various parts of Chennai experience considerable reduction in property and rental values, many residential localities in proximity to Grand Southern Trunk (GST) Road are able to maintain the rental values over the last few months. At some locations, an increase of 10 per cent in residential rentals over that of last year is also being reported.

“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,” said M.K.Sundaram, Chairman of Builders’ Association of India (South Centre).

People in the realty sector say the locational advantage is the main factor behind the popularity of 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.

However, property values have reduced by around 30 per cent going by the market value of recent transactions, says P.Raja, a broker. The rate of reduction in property values has been relatively high in areas beyond Tambaram. The decrease in property value is not significant in areas such as Chromepet, Tambaram and Pallavaram, according to Ganesh Murthy, a broker.

In the past, the rate of increase in rental values in many of the residential areas near GST Road had been lesser than in other localities of Chennai, according to brokers. So it is not surprising that the rental value has not moved significantly in the recent months, says B.Velu, a broker.

One of the major rail network in the city - Chennai Beach to Chengalpattu - running parallel to GST Road, has also contributed to the sustenance of rental values in some areas, say brokers.

While middle class families continuing to opt for residential accommodation in areas near GST Road is a key reason for sustenance of the rental values, IT professionals experiencing pay cuts have started taking interest in the area because of relatively affordable rentals with better connectivity.

With regard to property transactions, the number of sellers is increasing significantly even as the number of buyers remains a microscopic minority, according to Mr.Velu. Residential areas near the Paranur railway station near Mahindra City have experienced an increase in residential rental value of around 10 per cent, said K.T.Inbasekaran, a broker. However Maraimalainagar, a few km away, has been witnessing a reduction in rental value. The availability of larger number houses without tenants in Maraimalainagar has contributed to the reduction, he says. “Given the fact that the GST road precinct is close to upcoming IT SEZ’s, excellent residential catchment locations such as Tambaram, Chromepet and Pallavaram with good rail and air connectivity, rentals have seen an increase in many areas over the last 2 years from Rs. 10 to 15 per sft per month,” said Ramesh Nair, Managing Director-Chennai, Jones Lang LaSalle Meghraj.

The apartments in areas near the road were priced in the range of Rs.2,700 to Rs.4,500 per sqft, he said.

“Properties along roads such as Thoraipakkam Pallavaram and Kelambakkam Vandalur Road, which originate from GST Road, are expected to also benefit in the medium term,” he added.

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