The residential and retail real estate seg­ments seem to be lo­oking up, but commercial

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space continues to be dormant in Chennai.

Activity in residential real estate space has gained mome­ntum over the past couple of months in Chennai and the tr­end seems to be getting stron­ger. “The factors influencing buying activity are availability of affordable homes ranging between Rs 15 lakh and 30 la­kh, soft interest rates by ba­nks and financial instituti­ons, im­proved economic sentiment and employment stability,” says Sanjay Chugh of Skylines Pro­perty Consultants, a Chennai-based property advisory.

Some of the major developers like Vijay Shanthi, True Val­ue Homes, DLF, Unitech, Aks­haya Homes, Prince Founda­tions, Dugar, Doshi and Cee Dee Yes are marketing residential projects at attractive prices.

In fact, Akshaya Homes that recently launched two new projects on OMR and GST Road, received an enthusiastic response from the market. “We got an amazing response from home buyers, which was not witnessed in the recent past,” says Chitty Babu, managing director, Akshaya Homes.

Of the 199 flats in Adena on OMR, the company claims that only 18 have remained unsold. Adena offers 38 family friendly flat sizes to suit everyone’s budget. The response for Belvedre on GST Road has been good and flats are available in the Rs 38 lakh – Rs 40 lakh range.

On the retail front, the latest addition to the Chennai skyline has been the Ampa Skywalk Mall that opened towards the end of September this year. Although the mall is to be occupied by retailers in phases till the end of this year, it is all set to become a destination for shopping, entertainment and food with a seven-screen PVR multiplex, Star Bazaar Hyper­market, Westside, Landmark book store, McDonald’s and Rajdhani Thali among others.

Malls scheduled to open in Chennai in 2010 are Express Avenue, Ramee Mall, PS Mall and Chandra Mall. The city’s IT Corridor (OMR) will have two malls — Coromandel Plaza and Riverside next year. In addition, Spectrum Mall, the first mall in Perambur, north Chennai, is under constructi­on but will be operational in 2010.

On the High Streets, Chen­nai witnessed the opening of the largest store of Tanishq in T Nagar and Tata’s Croma in Anna Salai, Anna Nagar and T Nagar. In addition, eateries like McDonald’s and KFC opened their outlets in Anna Nagar and Nungambakkam.

However, the commercial office space segment is far fr­om enthusiastic, with no large scale enquiries. The segment seems to have been im­pacted the most in the light of poor absorption and oversupply of office space mainly in the IT sector. Against the supply of approximately 5.5 million sq ft of IT space, the ab­sorption is estimated to be in the region of 3.8 million sq ft.

With increasing vacancy levels, rentals are under pressure. Several large projects have either slowed down their construction activity or opted for phased delivery to meet demand in future. “Due to in­creasing vacancy, developers are offering attractive commercial terms like lower lease rentals, reduced lock-in period and option to sublet the premises,” Chugh pointed out.