Large residential projects may grab a lot of attention. Sales here may indicate market trends but developments offering a handful of apartments in a plot of a couple of grounds, a characteristic of Chennai, continues to attract buyers in prime locations. Developers focussing on this segment have set their eyes on faster turnaround.
While overall demand may be slow in keeping with the general trend, small, niche projects offering apartments priced between a Rs 2 crore Rs 5 crore, are seeing sustained interest as there is not much choice in these locations.
But those who can afford them are the High Networth individuals either with inherited property or those with deep pockets who prefer the prime locations for traditional reasons. Those on a limited budget need to look at the suburbs.
N. Sairam, Partner, G.R. Natarajan and Company, a real estate developer with over 20 projects in the pipeline ranging from developments of half a dozen apartments to over 60 apartments, says location and necessity drive sales in prime areas within the city. While overall sales are slow in line with overall market situation, there is a segment that continues to invest to stay in quality residential developments in specific locations.
The reason may be as diverse as old habits and tradition – people prefer Mylapore for its “sabhas” and the music festival, people who have lived for generations in a locality redevelop their individual houses into apartment blocks and manage to stay on. Others who have invested in a plot in a layout are selling off those assets to buy apartments in prime residential localities in the city.
He recalls government employees investing two years ago in what were suburbs such as Madipakkam. Those plots bought for a few thousand rupees today fetch over Rs one crore or more. Land owners sell those property to buy apartments within the city. Of course, there are the NRIs and those with deep pockets.
Apart from the necessity of constructing fewer apartments in a project because land parcels are small within the city, there is a preference for projects with fewer apartments. The reasons may be exclusivity or people feel that having fewer neighbours to deal with could be a lesser hassle.
Take for instance the Avana, a luxury residential project by AR Foundations coming up on College Road, with about a dozen apartments of about 4,200 sq. ft priced at around Rs 10 crore an apartment. The developer Amarnath Reddy says High Networth Individuals, the typical buyers of such high-value projects, prefer projects with fewer apartments. Projects can be planned and delivered faster in about a year and a half. For the developers too the benefit is in faster turn around of projects. AR Foundations concentrates on such projects and has positioned itself in that brand segment.
N. Nandakumar, Managing Director, Devinarayan Housing, believes projects with fewer apartments are ideal in the central parts of the city where large land parcels are few and far between. Of course small projects do not offer the common amenities that a large project can offer: facilities like club house, gym, maybe even a small theatre. Projects by Devinarayan typically are pegged around Rs 3.5-4 crore. It now has over a dozen projects going on in the city with over 70 apartments.
Nandakumar, who is also the president of the Tamil Nadu chapter of Confederation of Real Estate Developers Association of India says, in Chennai over 300 residential apartments are coming up as a part of small projects. It is easy to sell these projects but the challenge is in the speed of delivery. Typically these projects are completed in about a year or so.
With land prices ruling high – in most prime residential areas a 2,400 sq. ft plot can cost upwards of Rs 5 crore, built up space is bound to be costly. Keeping the projects small has its benefits say developers.