Chennai From Resilience to Growth -

Chennai From Resilience to Growth

Chennai From Resilience to Growth. City with major infrastructural developments.

Chennai – a major metropolitan city with historical importance and significance has been tough and resilient to combat the impact of natural calamities and emerge as a strong contender to become an outstanding contributor to the growth and development of the nation. The city’s economy has been driven by services and manufacturing sectors and maintains a perfect balance of overall growth. Its strategic position which enjoys a large network of major roads, railways, ports and airports have been instrumental in enabling trade from the city.

Chennai From Resilience to Growth
Chennai From Resilience to Growth

The major infrastructure projects such as the monorail, metro connectivity and the new international airport are likely to catalyse future growth of the city. Already home to major national and international automobile manufacturers, the upcoming Aerospace park at Sriperumbudur is going to metamorphose the economic landscape of the region. This will not only create an opportunity for increased investments and revenues but will also help generate tremendous employment opportunities, leading to rapid urbanisation.

Chennai’s residential real estate market has been witnessing a continuous fall in prices. While the sales have been more than supply until 2017, the market reversed in 2018, pushing the unsold inventory to 30,000 units. However, the market is expected to be back on the growth trajectory with controlled supply and bottomed-out prices. The report unravels the growth potential of the city amidst the existing and upcoming infrastructure facilities, residential real estate dynamics, the impact of IT-ITeS and the automobile manufacturing sectors that are likely to impact the growth in the future.

MASTER PLAN FOR CMA 2026

The development of the CMA is entrusted to the Chennai Metropolitan Development Authority (CMDA) – a nodal planning agency that prepares the master plans for the region. The CMDA prepared the Second Master Plan for Chennai Metropolitan Area, 2026, outlining the detailed development plan, along with land use, transportation, housing and other important aspects of the CMA.

The second master plan for Chennai metropolitan area has proposed a separate land use plan for the city specifically. The total area of the city’s urban agglomeration as per the new master plan is projected to be 1,18,916 hectares of which the share of the city will be only 15%. The allocation of land within the city, for the development of residential use, is 33.58% and 13.78% for mixed residential use. This is a strong contrast from the previous master plan which lacked the focus on the housing need. Increasing population amidst rising employment opportunities in the IT-ITeS and industrial sector necessitated a laser focus on housing developments. Thus, it implies that more emphasis has been given to residential which supports the urban planners’ concern to provide housing to all citizens. The authorities are also equally interested to create a healthy and sustainable environment as evident from the allocation of 21.31% for roads, water bodies’ hills and ecological developments within the city and a 27.79% allocation was given to the rest of the CMA.

Chennai Master Plan 2026 was approved in 2008 by estimating that the city’s population will reach 126 lakhs. Hence, to increase the overall density by allowing FSI to 2 for non-multi-storeyed residential developments along the MRTS influence areas (Thirumayila to Velachery) for residential developments. The master plan also encourages high-rise developments along the wider roads and larger plots to allow multi-storeyed buildings in the rest of CMA area. Master Plan 2026 boosted for LIG housing developments by providing an additional FSI of 0.25. Overall, the plan has been designed to encourage residential real estate developments across the city.

Chennai’s economy is driven by automobile, manufacturing and IT-ITeS sectors with an estimated GDP of USD78.6 billion in 2018. The city contributes 14% to the country’s IT services making it the second largest exporter. Chennai is also home to 40% of the automobile production in the country which earned it the tag of ‘Detroit of India’. The decadal growth rate of population and population density is slower in comparison to other south Indian cities such as Bengaluru and Hyderabad, due to which the nature of residential real estate developments here is significantly different. To support the population growth of the city, CMA has drafted a master plan to accommodate and facilitate the rising residential real estate developments.

Chennai Infrastructure Snapshot

Chennai’s total length of the road network is 2,780 km consisting of ring roads and radial roads. The city is also a major node of the Golden Quadrilateral of National Highways. The city is connected to other Indian cities by four National Highways leading to Kolkata (NH 5), Bengaluru (NH 4), Trichy (NH 45) and Tiruvallur (NH 205) along with several prime radials. Chennai hosts the headquarters of the Southern Railways. The city has two main railway terminals -Chennai Central Station and Chennai Egmore – which provide access to other major cities and other small towns across the country. The city is served by two major ports. The Chennai and Ennore Ports are in the Northern area of Chennai. Chennai Port is one of the largest and oldest artificial ports in India and ranked among the growth generating major ports, despite the threats and perceptions on diversion of cargo to emerging private ports. During the financial year 2017-18, Chennai Port handled 51.88 MMT (million metric tonnes) of cargo compared to 50.21 MMT handled in 2016-17 registering a growth of 3.33% and the trend is likely to continue during the current fiscal. Ennore Port located on the Coromandel Coast, about 24 km north of Chennai is another major port of the country. The port handled nearly 800 vessels during 2017-18 and over 500 vessels till Oct 2018. The total cargo handled has increased significantly from 14.96 (MMT) in 2011-12 to 30.45 MMT in 2017-18 registering a compounded growth of nearly 13%.

Chennai airport is the third busiest airport after New Delhi and Mumbai airports. It is a major airport in Southern India and has the facility of domestic and international terminals adjacent to each other connecting with common canopy. At present, the passenger capacity of Chennai airport is close to 14 million annually, which is expected to rise after a few modifications. There has been a substantial increase in the number of flights to small towns and metros which has further led to an increase in domestic passengers in the city.

Upcoming Infrastructure

Chennai has grown significantly over the last few years. Employment opportunities, along with a decent lifestyle are the two major factors that have attracted people to the city. With increasing population, the city’s real estate landscape has also grown by leaps and bounds and is now spread across various zones. While realty development in Chennai paused momentarily due to massive floods of 2015, the fundamental demand drivers remain unbroken and the city is likely to remain on its growth trajectory in the future periods, reinforced by upcoming new infrastructure. The Government’s focus on infrastructure improvement will surely boost Chennai’s realty sector in the years to come.

East Coast Road (ECR) Expansion:

The National Highways Authority of India (NHAI) is currently working on road widening of a 690- km stretch connecting Chennai with other cities of Tamil Nadu. The entire cost of road extension is approximately INR 10,000 Crore and is clubbed under the Bharatmala project. In 2018, the state government has given in-principle approval to upgrade ECR and it is to be renamed as NH 332 A.

Maduravoyal Expressway:

This 19-km elevated expressway proposed between Maduravoyal in the west and the Chennai Port along the Cooum River. While it has been delayed, NHAI has prepared a revised detailed project report and plans to resume the execution soon. The elevated expressway will connect Maduravoyal to the port through Koyembedu. The corridor once completed is expected to de-congest traffic in Ambattur Estate Road and Ponamallee High Road. While realty development in Chennai paused momentarily due to massive floods of 2015, the fundamental demand drivers remain unbroken and the city is likely to remain on its growth trajectory in the future periods, reinforced by upcoming new infrastructure. The Government’s focus on infrastructure improvement will surely boost. Chennai’s realty sector in the years to come.

Chennai Mono Rail:

The State Government has premeditated three corridors in Phase I of the monorail system. The total length of the corridors foreseen under Phase I of the system will be approximately 111 km. The development of the system is currently under initial stages of implementation viz. feasibility study and bidding process for pre-qualification is currently under progress.

CHENNAI METRO RAIL

Chennai’s metro rail network comprises two phases and integrates all important locations along the three arterial roads of Chennai namely Anna Salai (Mount Road), E.V.R. Periyar Salai (P.H. road) and Jawaharlal Nehru Salai (100 Ft. Road). The three corridors include Madhavaram to Siruseri (41 km), Nerkundram to Light House (14 km) and Madhavaram to Perumbakkam (33 km). Of around 88 km stretch under the second phase, 54 km would be underground while the rest would be elevated that are currently under development. The entire project is scheduled to be completed by 2019. On execution, the metro rail network is likely to significantly improve intra-city connectivity as well as reduce traffic congestion along the main arterial corridors of Chennai and good connectivity for the commercial zone at George Town. Construction work on the extension of Phase-I of the metro rail network from Washermenpet to Thiruvottiyour has been initiated in the first half of 2018.

Expansion of Chennai Airport:

Chennai airport is currently being expanded, which includes construction of new terminal buildings of approximately 140,000 sq. m. and an additional runway. The total cost of the modernization project (Phase-II) is about Rs 2,476 crores and work on terminals have already commenced. Once the expansion is done, the passenger capacity after modernization of proposed Chennai airport will be 30 Million Passenger Per Annum (MPPA), increasing from the current 14 Million. Chennai’s Second International Airport: The Second International Airport of Chennai at Sriperumbudur is a project taken up by Airport Authority of India. While the commencement date is yet to be announced, the proposed airport would ease traffic congestion in the existing one and help in further expanding the international routes to the city.

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