Madras lures firms with its prices and slower pace
In terms of real estate prices, Madras holds a clear edge over all other Indian metropolitan cities and mini-metros.
Sprawled over a huge area of 174 square kilometres, and with a population of just under six million, Madras remains affordable to the middle class and offers a better quality of life for its citizens than most other faster-paced Indian cities.
With flat ownership rates ranging from 2,750 rupees (about HK$563) per square foot in the elitist Nungambakkam area, to 1,800 rupees per sq ft along Ring Road, to a mere 700 rupees per sq ft on the outskirts of the city, Madras still permits the salaried class to have a decent-sized home.
Of late, the politicians have been at it again with their name-changing game. Hard on the heels of Bombay being officially re-named Mumbai (as it used to be in pre-colonial days), Madras has gone back to its Tamil vernacular name of Chennai.
Until a couple of decades ago, Madras was a relatively peaceful place, with a profusion of single and double-storey bungalows, with wooden grills, sloping tiled roofs, gracious courtyards with gardens and even servants' quarters.
Liberalisation, a rapid escalation in population and heavy urbanisation have combined to increase the pressure on land in the city, which has resulted in a vertical growth in land prices.
'The boom started in the early 1980s when Madras became the focus of business activities,' said M. Rama, director of Rama Constructions, one of the pioneers in apartment construction.
'This increased demand led to sky-rocketing of land rates, which could not be matched by purchasing power. The salaried class had no choice but to move into flats and apartments.' Many corporate giants have been attracted to the city because the prices of even premium commercial property are reasonable, and such property remains available.
Rents are reasonable too, ranging from 20 to 30 rupees per sq ft per month in the main business areas. This compares with 80 to 100 rupees in Nariman Point, heart of Bombay's business district, and 60 to 70 rupees in New Delhi's Connaught Place area.
Along Anna Salai, the main road that snakes through the centre of the city, ownership prices of commercial space range from 3,000 to 5,500 rupees, which compare favourably with rates in excess of 30,000 rupees prevailing in Bombay's Nariman Point.
Companies such as E. I. D. Parry, Ashok Leyland, Southern Petrochemicals (SPIC), MRF Limited and India Cements have made Madras their headquarters, and others are shifting some of their corporate functions away from Bombay and New Delhi to the city.
Several multinationals have also been attracted to the city after prices of quality office premises in Bombay (and even Bangalore) climbed out of reach.
The US motor manufacturer Ford, for example, is setting up a factory on the outskirts of Madras. Similarly, non-resident Indians are looking at Madras as a good base.
'The city is capable of providing world-class infrastructure for commercial and residential purposes,' Arihant Foundations & Housing managing director Navratan Lunawat said.
S. Varadarajan of Canfin Home Finance said: 'Madras is also perhaps the safest of the Indian metropolitan cities, with a minimum level of property-related underworld activity.' Some of the other well-known real estate developers in the city are Alsa Constructions, Alacrity Housing, SI Properties, Chaitanya Builders and Ashok Leyland Properties.
Nevertheless, as the influx of people into the city continues, the signs of a boom in the real estate sector have already started appearing. Madras has seen a 50 per cent rise in land prices and 70 per cent rise in flat prices during the year.
The most desirable residential areas in Madras are T-Nagar, Nungambakkam, Teynampet, Kodambakkam, Triplicane, Mylapore and Adyar. The per sq ft rates for apartments vary from a high of 2,750 rupees in Nungambakkam, to 1,900-2,000 rupees in T-Nagar, to 1,500-1,600 rupees in Teynampet, to as reasonable as 850-1,500 rupees in Adyar, depending on the exact location.
Perhaps the least expensive middle-class residential accommodation is available in the more accessible suburbs - within 15 kilometres of the central business district - of Saidapet (850 to 900 per sq ft), K. K. Nagar (550 to 700 per sq ft), Arumbakkam and Vadapalani (500 to 600 per sq ft).
Because of increasing demand for residential projects at reasonable rates, the property developers are moving towards the outskirts of the city. The expanding city limits make it necessary for the state government to provide basic facilities such as drinking water, drainage and electricity.
Certain suburbs - notably Tambaram, Thiruvottiyur and Porur - are developing at a cracking pace. The city has also seen the emergence of a number of self-contained townships.
The city does have scope for expansion, but there are limitations. Industry and a high level of water and air pollution have made further habitation in the northern part of Madras almost impossible. The eastern part is bound by the sea, leaving only the southern and western parts available.
Unfortunately, not many people are willing to move to these areas because of limited sewerage, telecommunications, drinking water and transport.