CHENNAI: Covid-19 has flattened the vertical growth curve of the real estate market along Old Mahabalipuram Road. With almost all software firms in IT parks along the stretch encouraging employees to work from home, prospects of the residential realty sector — which depends on developments in the IT sector — have been dented.
The pandemic has already caused severe damage on the IT Corridor, ranging from reduced activities in IT parks to closure of star hotels and a fall in occupancy rate in apartments, and a section of developers planning housing projects on OMR has decided to hold things.
Conservative estimates by stakeholders such as resident welfare associations, property managers and water tanker operators show that one in every three apartments on OMR has remained vacant in the past four months, triggered by IT companies declaring a work from home system and sparking its workforce to move to their hometowns. Rental value has been reversed up to 50%, worrying the real estate sector.
K Chandrasekar of Rajam Property Management Services Private Limited said OMR was the worst hit in the real estate market when compared with other areas. “We maintain 100 rental properties on OMR, of which 15 have been vacated and another 35 have been locked up after the tenants shifted to their native places. In contrast, we maintain 400 properties on rentals in west, central and southern parts of the city, where only 2% of tenants have vacated and rent was revised only by less than 10%,” he said. Most of these properties were investments made by NRIs. “If the situation continues, OMR will lose its sheen as an investment destination for residential vertical.”
The future of at least 5,000 apartments under construction between Perungudi and Tiruporur is uncertain. Developers were vying with one another to launch projects due to demand despite the stretch being notorious for poor civic infrastructure such as lack of Metrowater supply, groundwater salinity, absence of underground sewage system and non-availability of suburban trains or metro rail connectivity.
A developer looking for land parcels on the stretch for a residential project has decided to wait and watch. “Land prices are high and even if I launch a project now, there will not be many takers because OMR already has enough stocks to be sold in our price bracket. Rajiv Gandhi Salai was on our priority list among top three locations before Covid-19, but we are concentrating on western suburbs now,” said the developer preferring anonymity.
But, developers on OMR with existing projects are bullish as the crisis caused by coronavirus was a temporary phenomenon. Mehul Doshi, director of Doshi Housing said that parts of OMR is getting piped water supply by this year end and the IT corridor will continue to thrive in the real estate market. “Work from home will shoot up the demand for housing and the corridor has witnessed development of good social infrastructure making it an attractive destination for homebuyers,” he added.
The pandemic has already caused severe damage on the IT Corridor, ranging from reduced activities in IT parks to closure of star hotels and a fall in occupancy rate in apartments, and a section of developers planning housing projects on OMR has decided to hold things.
Conservative estimates by stakeholders such as resident welfare associations, property managers and water tanker operators show that one in every three apartments on OMR has remained vacant in the past four months, triggered by IT companies declaring a work from home system and sparking its workforce to move to their hometowns. Rental value has been reversed up to 50%, worrying the real estate sector.
K Chandrasekar of Rajam Property Management Services Private Limited said OMR was the worst hit in the real estate market when compared with other areas. “We maintain 100 rental properties on OMR, of which 15 have been vacated and another 35 have been locked up after the tenants shifted to their native places. In contrast, we maintain 400 properties on rentals in west, central and southern parts of the city, where only 2% of tenants have vacated and rent was revised only by less than 10%,” he said. Most of these properties were investments made by NRIs. “If the situation continues, OMR will lose its sheen as an investment destination for residential vertical.”
The future of at least 5,000 apartments under construction between Perungudi and Tiruporur is uncertain. Developers were vying with one another to launch projects due to demand despite the stretch being notorious for poor civic infrastructure such as lack of Metrowater supply, groundwater salinity, absence of underground sewage system and non-availability of suburban trains or metro rail connectivity.
A developer looking for land parcels on the stretch for a residential project has decided to wait and watch. “Land prices are high and even if I launch a project now, there will not be many takers because OMR already has enough stocks to be sold in our price bracket. Rajiv Gandhi Salai was on our priority list among top three locations before Covid-19, but we are concentrating on western suburbs now,” said the developer preferring anonymity.
But, developers on OMR with existing projects are bullish as the crisis caused by coronavirus was a temporary phenomenon. Mehul Doshi, director of Doshi Housing said that parts of OMR is getting piped water supply by this year end and the IT corridor will continue to thrive in the real estate market. “Work from home will shoot up the demand for housing and the corridor has witnessed development of good social infrastructure making it an attractive destination for homebuyers,” he added.
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