Smart real estate investments

Two years ago, we started this series with the idea that many Indians were slowly moving from buying real estate to live in, to treating it as an investment. This shift indicated how people living in Delhi were fine to invest in a realty project in Hyderabad or Pune, knowing very well that they may never live there. We went a step further, by mentioning localities that one could invest in. The purpose of identifying localities was influenced by factors one would consider when moving to a place themselves. So, locality, existing and upcoming infrastructure, proximity to schools, colleges and hospitals were considered. Of equal importance were the employment prospects in the vicinity of these locations. Equipped with all these factors, we featured several locations, with an update on how the recommendations fare in the Newsroll section of this issue. We leave you with two destinations to ponder on this time.

Advantage of proximity to the new airport- Hennur has taken the right steps to make it big in the realty map. Here’s a lowdown of all that and

more.

Hennur in North Bangalore has transformed from a sleepy village to an area of increased residential development. Today, it is part of the city and very much in demand largely because of the ever increasing inflow of people working in the IT/ITeS sector in Bangalore. After south and east Bangalore got saturated in the late 1990s, the time for north Bangalore has come. The development of Manyata Tech Park in Hebbal and other large IT developments coming up on Bellary Road, Hennur has found attention. Says Maneesh Gupta, director-valuation & advisory services and residential services, Colliers International; “Hennur is becoming a logical residential extension to cater to the rising growth of IT Parks in the city.” Though Hennur is still under development, it’s vibrant for its proximity to what essentially every residential area needs—schools, parks, college, hospitals and shopping malls, which add to the infrastructure and amenities in the area.

The rental market in Hennur is still at a very nascent stage, but this micro market has been witnessing hectic activity in the recent past. Says Satish B N, executive directorsouth, Knight Frank India; “In the past one year, capital values have moved up by approximately 10 per cent.” Capital value of apartments range between Rs.4,500 and Rs.9,000 per sq.ft, with apartments available from Rs.60 lakh onwards to Rs.1.25 crore. Independent homes, such as villas can be had for Rs.5 crore-Rs.6 crore. Satish feels there is room for further growth and capital values can further go up by 30-35 per cent in the next two years.

According to Srinivasa Reddy, associate director-Research & Real Estate Intelligence Service, JLL India; “A significant office supply in pipeline, in this part of the city, the demand for housing is likely to sustain in the near term with rise in affluent employee base.” Although it is six years since the new airport came into existence, north Bangalore has gained from development. Agrees Idirees Chenakkal, head- Research & Consulting LJ Hooker (India): “The proposed hardware park and IFCI financial city which are located at Bagalur is just 15 km from Hennur.” The development of an alternate road (21 km stretch) that connects to the airport from Hennur (Outer Ring Road) is an alternate route to reduce pressure on the existing airport road (Bellary Road) are other favourable factors that Hennur is benefiting from. Investors can consider taking positions with a 6-7 year time frame.

A tempting option near a metropolitan city- Medavakkam has good social infrastructure and is close to Chennai. Good enough reason for

investment.

In a 2012 investment advisory report, Knight Frank ranked Medavakkam in southern Chennai sixth among 13 micro markets in order of investor return over the next five years. Three years later, it still retains the potential to invest in. With capital values rising steadily, it has now become one of the most preferred investment hubs of Chennai. Of course, given the likely increase in both social and physical infrastructure facilities expected in the next few years the trend of price appreciation is likely to remain. Says Sarita Hunt, managing director-Chennai & Comibatore, JLL India. “It is advisable to invest in the next few months in the right product to cash in on this.”

Medavakkam is adjacent to the suburbs of Sholinganallur, Selaiyur, Madipakkam, Keelkattalai, Velachery and Tambaram. What works in favour of Medavakkam is that it is strategically located between the Old Mahabalipuram road (OMR) or IT corridor and Grand Southern Trunk Road (GST Road) with easy connectivity to Velachery and Pallikaranai. The micro-market is at a distance of 14 km from Chennai Airport and 25 km from the Chennai Central Railway Station. The Nanmangalam Reserved Forest is only 3 km away. Says Kanchana Krishnan, director- Chennai, Knight Frank (India); “Medavakkam has good social infrastructure in terms of housing, schools and hospitals.” There are also business class hotels in Medavakkam. It also houses reputed schools and colleges and hospitals. “There are, however, not many avenues for entertainment,” says Maneesh Gupta, director-valuation & advisory services and residential Services, Colliers International.

Over the past two years capital values in Medavakkam have moved up by 15-20 per cent. “It currently ranges between Rs.4,000-Rs.5,200 per sq.ft,” says Hunt. This would depend on location, brand, size of development and specification offered. Adds Hunt, “With the augmentation of infrastructure facilities promoted by the government, the appreciation in capital value is likely to continue.” A 2BHK apartment in Medavakkam will be available for rent in the range of Rs.8,000-Rs.10,000 per month while a 3BHK apartment would be available in the range of Rs.12,000-Rs.15,000 per month. “Considering the positive economic indicators and government’s focus on affordable housing and availability of quality land banks this micro market should see better appreciation in the medium term,” says Krishnan.

olm@outlookindia.com