Prime areas see realty prices erode in Chennai

 Paradoxically, rentals in prime commercial business district (CBD) and off-CBD declined in the same period.

 According to real estate agency, Cushman & Wakefield, one of the reasons for such a trend is the rapid development of commercial real estate towards the south of Chennai in suburban areas like Guindy and Annanagar. Rentals increased by around Rs 27 per sq ft per month in the last six months.

 Commercial rentals in prime commercial business districts (CBD) has declined to around Rs 36 per sq ft per month representing a 5.3 per cent decline in the last six months.

 Commercial rental prices are between Rs 30 and Rs 36 per sq ft in prime CBD areas like Anna Salai, Nungambakkam, and RadhaKrishnan Salai and prime retail areas are like T.Nagar, Pursawakkam and Mylapore.

 Rentals in off-CBD areas, areas away from a three km radius of prime CBD areas, fall to around Rs 30 per sq ft per month, representing a 6.1 per cent drop. Rental prices was around Rs.25 per sq ft per month for office space off-CBD.

 Commercial real estate property prices in prime CBD areas declined to about Rs 3600 per sq ft representing a four per cent decline.

 At the same time residential property prices in the city, across locations, over the last six months increased by an average 10 per cent.

 The prevailing low interest rates on home loans is one of the reasons for this rise, according to real estate analysts.

 Interest rates on home loans dropped on an average by about 2.5 per cent in the last two years and currently hover between 8 and 8.5 per cent.

 Velachery, Virugabakkam and adjoining area, MRC Nagar, Anna Nagar west, Madipakkam and Mogappair are the upcoming residential areas in the city.