weekly Newsletter on Real Estate in ChennaiChennai Realty May 2011

www.chennairealty.bizVol. 1: Issue 1

New VisionNew TeamInfinite Possibilities!

Launch date : 21st May 2011Available in Stands from June 2011

ASK Real Estate Special Opportunities fund, a realty-focused private equity fund has invested Rs.50 Cr in a special purpose vehicle (company) floated by

Chennai-based Real Value Group. The money would be used for developing a residential project at Kottivakkam in Chennai which will see Real Value Group develop 6.75 lac square feet of space on a plot of 4.32 acre. The project is located close to Taramani Railway station and in the vicinity of the IT corridor on OMR and entertainment corridor on ECR in Chennai.

Founded in 1995, Real Value Promoters has completed over 7 million square feet of construction and have another 6.5 million under pipeline. The company currently has 3 on-going projects, Neel Kamal and Sai Surya both on OMR and Sai Skanda at Velacherry. Pipeline projects are coming up at Oragadam and Greenways Road.

e-Stamping system launched in Tamil Nadu

Stock Holding Corporation of India (SHCIL), a public sector financial

services provider, has lauched e-Stamping system in Tamil Nadu. With e-Stamping it is now convenient for anyone to pay stamp duty online without the hassles involved in obtaining a stamp paper or franking a document. The e-Stamping system has been introduced to replace the use physical stamps. The system is secure and reliable and ensures the

S & P Foundation launches Living Spaces

Chennai based, S & P Foundation has launched its latest project offering ‘Living

Spaces’, Mogappair West Extn. Phase I to be developed over 10.9 acres would have 592 apartments with a total built up area of 7 lakh square feet with apartment sizes ranging from 550 sft to 1790 sft. The entire project spread over 80 acres will be developed over 5 years at an investment of over Rs.1500 crores. When completed, the township will have 2800 apartments and 300 villas. Living Spaces incorporates modern infrastructure and social amenities catering to a diverse community to meet their individual tastes, lifestyles and budgets. For further information, visit www.sandp.co.in

Chennai caught in “Sand Storm”

stamp duty paid reaches the government safely. The system has done away with the risks associated with the physical stamping of documents.

Important features include: • e-Stamp is available at no extra cost i.e you pay only the amount of stamp paper required • A single e-stamp can be purchased for any denomination • Third party verification of e-stamp certificate is possible for genuineness • An e-stamp can be purchased by paying cash /Demand draft , RTGS or NEFT

This facility has been made available throughout Chennai, Kanchipuram and Thiruvallur districts through the branches of SHCIL and through select branches of Indian Bank, Corporation Bank and Central Bank. For further information, contact Ms. S Karpagam, Area Manager, SHCIL-Chennai or visit www.shcilestamp.com

Chennai developers are facing severe shortage of construction sand

leading to the price of sand going up by 3.5 times from Rs.15 per cubic feet to over Rs.40 per cubic feet. Sometime back the prices went as high as Rs.60 per cubic feet as the High Court had banned the use of machines for sand quarrying operations and manual labour becoming scarce. The closure of sand quarries in the neighboring districts of Kancheepuram, Tiruvellore, Vellore and Villupuram meant that sand had to be transported from as far as Tiruchi which is 330 kms from Chennai. Add to this the wastage, over sized particles and heavy moisture content, the price works out to as high as Rs.60 per cubic foot for concrete and Rs.80 per cubic foot for plastering sand. The severe shortage has led to hoarding of sand making its availability very hard forcing builders to go slow on their projects.

With Chennai requiring about

10000 loads (200,000 tons of sand) every day,

there is a serious need for developers to look at

alternative options to sand as construction

cannot happen without the basic

materials such as sand, cement and steel.

Nature takes about 600 years

to convert rock into 1-inch of sand and

with large scale construction happening all year round there is simply no sand to mine. The prices of cement and steel have already skyrocketed in the last 1 year putting builder’s margins under severe pressure.

ASK ties up with Real Value

Dear Patron,

I am happy to present to you the 1st edition of ‘PropWatch’, our weekly newsletter that tracks major developments and important stories in the real estate sector across India and abroad. The intention is to give a quick overview on issues which will have a direct or indirect effect on the real estate sector in Chennai.

This newsletter is yet another step in our modest attempt to bring a new dimension to media reporting on real estate and construction sector in Chennai. We believe in the saying ‘Nothing is Ever Perfect; There is Always Room for Improvement’. Hence we request your honest feedback on this newsletter which will help us learn, improve and innovate as we continue our journey to becoming a reputed voice of Chennai’s real estate industry.

Happy Reading!Kishore KumarEditorChennai Realty.biz

Chennai Realty

Weekly Wealth Monitor

TVS Group – To drive into

Low Cost Housing

The Chennai headquartered automotive group, TVS is all

set to drive into the real estate sector with the planned launch of their low cost housing project near Sriperumbudur at Nanmangalam about 50 kms from Chennai. TVS Housing, a company incorporated in March 2010 would be developing 28 acres at Nanmangalam which when completed will house over 2500 apartments. Key aspect of the township project involves development of 1 BHK apartments in the size range of 385 – 500 sft to be priced between Rs.7 and Rs.10 lacs. The project is scheduled for launch in the 2nd half of the year.

Though there is a huge opportunity on ‘Low Cost Budget Apartments’, the concept has seen little interest from developers who feel that there is very little margin for them to operate in the sphere and with the giving rapid rise in the cost of construction materials and interest rates, it will be difficult for them to sustain profitability unless it’s a very large project of over 100 acres. The challenge again is that the low income segment is not covered by traditional home loan institutions which affect their affordability for buying a home of their own.

Mall-oh-MallChennai is all set to see an upsurge

of shopping malls in the next 12 months. Till recently, Chennai which played home to the 1st shopping mall in the country in Spencer Plaza, was lagging far behind in the supply of quality retail space behind other metros like Bangalore, Hyderabad and even Cochin. Citi Centre and the recently opened Express Avenue has provided little succor for the average Chennaiite who still feels lack of proper shoptainment options in Chennai.

Prominent malls at Chennai:S.No. Mall Name Location Developer Area (sft) Status

1 Express Avenue Royapettah Express Group 9 lacs Operational2 Ampa Sky Walk Aminjikarai Ampa Housing & Development 3.5 lacs Operational3 Chennai Citi Centre Mylapore B S Abdur Rahman Group 1. 5 lacs Operational4 Chandra Mall Virugambakkam National Compan 1.5 lacs Scheduled for launch5 Spectrum Mall Perambur Ganga Foundations 1.2 lacs Scheduled for launch6 Ramee Mall Teynampet Ramee Group 1.5 lacs Scheduled for launch7 Coromandel Plaza Semmencherry Suryavardhan Estates 2.8 lacs Scheduled for launch8 Grand Mall Velacherry P S Srijan Group 3 lacs Scheduled for launch9 Riverside Mall OMR, Karapakkam Marg Group 10 lacs Scheduled for launch

10 Forum Mall Vadapalani Prestige Group 17 lacs Scheduled for launch11 Forum Mall Nandanam Prestige Group 12.75 lacs Scheduled for launch12 Ozone Mall Anna Nagar Ozone Group 14 lacs Scheduled for launch13 Allied Mall Siruseri Allied Housing 7 lacs Scheduled for launch14 Velacherry Mall Velacherry Kshitij Group 21 lacs Scheduled for launch15 Skycity Mall Poonamallee High Road Dugar Group 8 lacs Scheduled for launch

Infosys co-founder to invest in hospitality sector

N S Raghavan, one of the co-founders of Infosys, is expanding his presence in the hospitality sector. Nadathur Holdings, the investment vehicle owned by Raghavan, has formed a joint venture with Sri Lanka-based Sunshine Travels. This joint venture is expected to invest approximately $50 Million in a phased manner to develop, acquire and manage hotel assets in different parts of the country. In addition to investing from the family-office fund, Raghavan, runs a venture capital fund.

WELSPUN INFRA ACQUIRES 35 PERCENT STAKE IN LEIGHTON CONTRACTORS

Welspun Infra Projects Pvt Ltd (WIPPL), a part of the

Rs 13,500-crore Welspun Group, has acquired a 35 percent stake for Rs 470-crore in leading project development and contracting firm Leighton Contractors, the Indian arm of Australia’s Leighton International. About 60 percent

of the share capital of WIPPL is held by Welspun Infratech Ltd, a subsidiary of Welspun Corp Ltd (WCL) and 40 percent by Welspun Infra Developers by way of an investment of Rs 150-crore and Rs 100-crore, respectively. The balance Rs 220-crore is funded by way of an external debt.

-15.73

-37.21

27.54

30.68

-6.76

-60 -40 -20 0 20 40

CONSTRUCTION

REALTY

BANKING

INFOTECH

RETAIL

Last Year

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21732 22140

4080

5000

10000

15000

20000

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Last week This week Up / Down

Gold (10 gms in Rs.)

Gold (10 gms in Rs.)

Gold (10gms in Rs.)19590

19135

189001900019100192001930019400195001960019700

Last week This week

Sensex

Sensex

Sensex

121.4 125.58

4.180

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Crude (per Brl in US$)

Crude (per Brl in US$)

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Forthcoming EventsHindu Metroplus Lifestyle Show

30 May - 6 Jun 2011 Chennai Trade Center, Chennai

Luxury Homes 20117 - 9 July 2011

Chennai Trade Center, Chennai

Metal Buildings & Steel Structures Expo 2011

23 - 26 June 2011 Pragati Maidan, New Delhi

LifESTyLE

CoNSTruCTioN

rEaL ESTaTE

Chennai Realty

Chennai ProPerty trends

Sub MaRketS aveRage ReNt iN May 2010(Rs. / Sft per month)

aveRage ReNt iN apRil 2010(Rs. / Sft per month)

CBD (Anna Salai, Nungambakkam, RK Salai,

T Nagar, Egmore, Alwarpet)

Grade A 70 - 100 70 - 90

Grade B 55 - 65 55 - 65

Off CBD (Guindy, Kiplauk, Taramani, Adyar, Anna Nagar)

Grade A 50 - 65 50 - 65

Grade B 42 - 47 42 - 47

Suburban Business District(Velachery, Perungudi, Mount Poonamallee Road)

Grade A 35 - 45 35 - 45

Grade B 30 - 40 30 - 40

Peripheral Business District (Perungalathur, Sholinganallur, Siruseri, Ambattur, GST Road)

Grade A 35 - 40 35 - 40

Grade B 25 - 35 25 - 35

CoMMeRCiAL

locatioNS capital value 2 bHk (Rs./Sft)

ReNtal value 2 bHk of 1000 Sft (Rs./Month)

capital value 1 gRouNd of 2400 Sft (Rs. lacs)

budget pReMiuM budget pReMiuM aveRage

ceNtRal

Abhiramapuram PerungudiTriplicane

800038007000

14000450013800

1500080008000

240001200016000

250 - 35070 - 120200 - 250

NoRtH

AmbatturPurasawalkamShenoy Nagar

300080009000

40001200012000

80001200012000

120002400018000

80 - 100250 - 300180 - 250

SoutH

AlandurSaidapetKottivakkam

550050006000

700070007500

800080008000

140001800020000

85 - 95160 - 200150 - 180

WeSt

KoyambeduNungambakkam Porur

6000100003700

7000150004200

8000160005000

20000300008000

130 - 150250 - 35055 - 60

outeR

Tiruvallur KelambakkamOragadam

21002500 1800

270030002000

500065003500

7000140006000

12 - 1820 - 30 8 - 12

ReSiDeNtiAL

CoNStRUCtioN MAteRiAL PRiCe iNDex *coMModity uNit MeaSuRe pReviouS Week cuRReNt Week

CEMENT Per 50 KG BAG Rs.270/- Rs.275/-

STEEL Non ISI 6MM / Ton Rs.38,500/- Rs.38,000/-

STEEL TMT 8MM dia / Ton Rs.42,100/- Rs.42,100/-

STEEL 10-25 MM dia / Ton Rs.40,900/- Rs.40,900/-

STEEL RMS / Ton Rs.45, 500/- Rs.44,500/-

STEEL STIRRUPS / Ton Rs.46,500/- Rs.45,500/-

STEEL VSP/SAIL 10mm dia / Ton Rs.46,800/- Rs.46,800/-

BRICKS 1 No. Rs.5.60/- Rs.6/-

RIVER SAND Cubic Feet Rs. 30/- Rs.35/-

FLY ASH Per Ton (Ennore) Rs. 100/- Rs.100/-

BLUE METAL 20MM / Cubic Feet Rs.26/- to Rs/29/- Rs.26/- to Rs.28/-

BLUE METAL 40MM / Cubic Feet Rs.24/- Rs.24/-

QUARRY DUST 0 – 2 MM / Cubic Feet Rs.15/- Rs.17/-

BITUMEN GRADE 80/100 Rs.36,246/- Rs.36,606/-

BITUMEN GRADE 60/7O Rs.37,198/- Rs.37,558/-

* C

ourte

sy :

BA

i, C

henn

ai “Wisdom is not a product of schooling but of the

lifelong attempt to acquire it”

Albert Einsten

Knowledge is

Power

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rs. 275/-

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rs. 500/-

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