Royapettah, an old locality in north Chennai, is attracting developers' attention as many redevelopment projects and new projects are being built in the area. While Royapettah is already developed due to its central location, prices for property range from Rs. 12,000-16,000 per square foot depending on the locality. The area offers both affordable and high-end housing options and is well-connected to other parts of the city by roads and public transport. With schools and residences, Royapettah is transforming into a prime residential and commercial area as developers redevelop existing houses and construct new projects.

1. DISHYA.SHARMA
@timesgroup.com
F
or years now, Royapettah
has been known for its
old world charm due to
its old style buildings and ar-
chitecture. However, with the
changing face of the city, this
north Chennai locality is see-
ing a number of developers
stepping in and sprucing up the
area.
Since Royapettah is an old
locality, the area is already de-
veloped. "Given its central lo-
cation, Royapettah is close to
old office spaces and industries
that have established their base
in north Chennai. The area
forms a junction that connects
to some of the busiest areas,
such as Mylapore and Tripli-
cane, and Central Business
District in Chennai," says N
Nandakumar, MD, Dev-
inarayan Housing.
In Royapettah, one can in-
vest in either affordable or
high-end housing, as both the
options are available. "The
prices in Royapettah range be-
tween `12,000 and `16,000, per
square feet. The cost varies ac-
cording to the locality. In Balaji
Nagar, the prices of property
can go up to `16,000, whereas
property in streets behind
Lloyds Road cost around
`12,000. The rental prices for a
2BHK range from `25,000 to
`30,000," Nandakumar adds.
The rent ranges between `30 to
`35 in posh side of Royapettah
whereas `15 to `20 per square
feet in mixed pockets of the
area.
"Royapettah is that part of
the city which is a blend of both
the old and the new. Amir Ma-
hal, bordering Triplicane, has
the old world charm, while the
area around Lloyds Road is
modern and new. With schools
like DAV Public School and
Church Park situated in and
around the area, the area has
some of the best schools in the
city," says Ajit Chordia, presi-
dent, CREDAI.
Apart from established road-
ways, businesses and homes,
connectivity is a big advantage
for the residents here. "It has
Chennai, April 16, 2016
NEWSDIGEST
RETAILING GAINS
MOMENTUM
An estimated US$75-80 million PE in-
vestment is expected to enter retail
real estate this year, according to JLL.
PE investment has been largely con-
fined to a few retail players in India. In
2015, PE investment into retail prop-
erties alone was US$ 39 million, and
in 2016, it is expected to be in the
range of US$ 75-80 million.
The retail sector can look forward to a
more cheerful 2016 with the govern-
ment relaxing sourcing norms for sin-
gle-brand retail. Moreover, the budget
has allowed 100 percent overseas
capital in processed food retailing
through the Foreign Investment Pro-
motion Board (FIPB) route.
The FDI inflow in retail trading in-
creased between October 2014 and
September 2015 to US$ 70.75 million.
Coupled with economic stability, liber-
alisation of the FDI policy and im-
provement in the consumer senti-
ment, this is expected to help global
brands witness a very a conducive en-
vironment for investment into Indian
retail as well as retail real estate sec-
tors
STRONG HOUSING CREDIT
The total housing credit outstanding
in India as on December 31, 2015
crossed `11,90,000 crore for an
annualised 18 percent growth in the
first nine months of FY16 because of
a pickup after the second quarter,
supported by disbursements against
construction-linked loans, growth in
the small ticket affordable housing
segment, demand from tier II and III
cities, and some increase in primary
sales during the festive season. SBI
and HDFC dominate but the rest of
the housing finance market is
fragmented.
and its accessibility to other
parts of the city."
"Alwarpet and Teynampet
have two or three large office
buildings, which are small
(less than 2000 sq m land).
Having said this, the IT build-
ing on St Marys Road is com-
manding a premium over the
Mount road and Guindy.
However, the land prices still
does not justify the office
rentals. Rentals must go up in
CBD and prime locations like
Alwarpet and Nungam-
bakkam," says AjitChordia,
managing director, Olympia
Group, who feels that these
are high-end residential
spaces with good connectivi-
ty. "The office spaces that
have been developed here are
a result of a joint venture.
Good social infrastructure
like hotels, residential spaces,
schools, retail outlets, public
transport connectivity and
good roads are the factors
that support prime office
spaces here."
With many high-end resi-
dential apartments coming
up, these localities have been
transforming into prime resi-
dential and commercial
space. Adding to this, Babu
says, "The supply for high-end
residential projects is high,
which is sufficient enough to
accommodate the demand for
one year. Hence, these locali-
ties will move towards its ide-
al area to be a prime commer-
cial locality."
Rental range today for a
new office space in a location
like Teynampet hovers
around `75 to `85 per sq ft per
month for a warm shell space
depending on the quality of
the space being offered.
Spikes in rental are excep-
tional in a few cases.Older
spaces which don't offer scal-
ability get leased in a rental
range of `50 to `70 per sq ft
per month for a warm shell
specification again depending
on where the exact location of
the building.
High-end ITeS firms con-
tinue to prefer city spaces
than to move to peripheral ar-
eas and manage transport
which becomes an incremen-
tal activity and adds to their
cost as well. There are also
many smaller enterprises and
start-ups who don't think of
scaling up in numbers for a
smaller period of time and opt
for renting residential apart-
ments.
"These locations are being
vied by consulting, auditing
firms, banks and corporate of-
fices. CBD buildings today in
Chennai are also an attractive
proposition for setting up
healthcare units and mini
hospitals. CBD rentals are
costly and these firms can't
hold these operations on a
larger scale. The charm of
these locations will continue
to remain intact as these are
very close to the traditional
catchment areas and have ex-
cellent connectivity by all
modes of transport. We may
increasingly see these loca-
tions turn into city office
spaces while processing cen-
tres operate in the suburbs",
adds Satish.
– Sai Vinai Cheithanya R
T
he Central Business
District (CBD) and its
adjoining neighbour-
hoods used to be the ul-
timate destination for
office spaces many years back. But
the office space scenario has been
changing over the past decade.
The high demand for office spaces
in the CBD has pushed the radius
further from the original area, as
supply has become less over time.
Today locations till Guindy are as
well accepted as CBD locations.
However, locations that are off
CBD, like Nungambakkam, Anna
Salai, Alwarpet, Teynampet still
continue to still attract business.
Satish Chander Narayanan, as-
sociate director, investments,
Cushman & Wakefield says, "After
2007, the largest supply of office
space in these locations came up
in 2014, when Prestige Polygon at
Teynampet was built over an area
of 0.60 million sq ft. The next size-
able building gearing up for tenan-
cy is the High Street IT Park, with
about 0.20 mn sq ft. The paucity
of land parcels in these locations
and also their inability of these
buildings to offer large floor plates
has been the main reason for cor-
porates to be driven to other sub-
urban locations. These locations
today act as hubs for companies to
host their corporate offices, while
the processing centres are in the
suburbs."
Accessability plays a key role
here, as Chitty Babu, CEO, Ak-
shaya puts it. "IT commercial
space is majorly spread across the
OMR, GST, Ambattur, Guindy and
other suburbs. However, there is a
constant demand for grade A of-
fice spaces in CBD from corpo-
rates because of its address value
AREAFOCUS
MANY HIGH-END RESIDENTIAL
APARTMENTS ARE COMING UP AND
THESE LOCALITIES HAVE BEEN
TRANSFORMING INTO PRIME
RESIDENTIAL AND COMMERCIAL SPACE.
THE SUPPLY FOR HIGH-END RESIDENTIAL
PROJECTS IS HIGH, WHICH IS SUFFICIENT
ENOUGH TO ACCOMMODATE THE
DEMAND FOR ONE YEAR.
FASTFACT
SERIOUSBUSINESS
Although new peripheral business districts are coming up Chennai, older
areas like Teynampet and Alwarpet still continue to attract business
Royapettah is attracting developers'
attention as many redevelopment
projects and a handful of new
projects are being built here
Oftheold
andthenew
an MRTS stations close by
and also has a number of
MTC buses passing through
various points within Roy-
apettah, linking it to most ar-
eas of the city. The neigh-
bourhood is good," explains
Subba Rao, MD, CeeBros.
In spite of the locality hav-
ing reached saturation point
years ago, many developers
are taking keen interest in de-
veloping the area. "There are
some new projects that are
coming up in the area. Also,
many of the existing houses
are being redeveloped by re-
altors." Nandakumar adds.
- With inputs from
Ranjitha G