The Joint Development Authority Route for Builders in Chennai

So how do top builders in Chennai often tend to construct new developments? One popular method in the city by the Coramandel coast is by forming JDA’s or a Joint Development Authority with landowners. JDA’s allow builders in Chennai to build on land with a separate allocation of property for the original land owner. This is beneficial to the original land owners as they become the owners of a great property at either a throwaway price or even free. In contrast most developers in north India prefer to purchase land outright when they construct a development. The hidden advantages of both these methods are best known to the developers who use them.

Perhaps one reason may be that there is a larger share of real estate in private hands in south India that is well suited to development than there is in the north of the country. This may be why some of the best builders in Chennai are more inclined to construct on land acquired by JDA’s rather than by buying land outright.

Much of the apartments in Chennai may have been constructed via the JDA route benefiting developers as by providing a living area for the original land owners at their own cost, developers may be have free reign to build the rest of the units in the development as they wish allowing them to make a handsome profit despite the free or inexpensive units they provide to the original landowners. In south India, some flats for sale in Chennai may have been placed on the market by the original land owners who profited immensely through home ownership via the JDA route benefitting them further by providing them with property without them having to part with any capital.  

The relative popularity of JDA’s in South India may have yet another reason. Apartments in Chennai built by the cities developers may be intended for the end user in a far greater proportion than in parts of the country where JDA’s are less common. The smaller residential projects in Chennai may reflect this trend as large tracts of land are less commonly owned by individuals leading to homes built in JDA’s to contain a relatively large number of 2 BHK flats in Chennai which are less attractive for speculators than they are for long term investors and end users.

Many new projects in Chennai are under construction following the guidelines of JDA’s. In the most simplistic terms it is likely that such projects in Chennai are a popular vehicle for home ownership as they provide an easy an perhaps more affordable route for end users as well as a more  affordable construction route to builders in Chennai. The smaller size of the area of the developments as well as lower unit costs make such developments more affordable and as luxury apartments in Chennai are as yet a smaller fraction of the real estate market than they are in other parts of the country, the reason for constructing using JDA’s provides the city’s builders the opportunity to service the cities far larger market of middle income home buyers.

Perhaps the single greatest reason for JDA’s may simply be the high cost of purchasing and financing involved in land bought outright. In many such cases the cost borrowing to purchase land may be as high as 20 or even 30 percent with the result that many builders in Chennai prefer to build on land acquired by JDA and rather than paying a heavy cost for borrowing; simply give a few units for free while selling the rest at a high price.

Residential property in Chennai emerges as a promising destination.

Real estate property in Chennai has emerged as a favorite destination for investors and buyers. The city is a home to many blue chip companies and also enjoys a robust infrastructure and excellent connectivity. Driven by these factors more and more people are willing to invest in residential property in Chennai. It also has several good colleges and acclaimed institutes that attracts a good footfall every year.

Let's have a look on the factors that spur the demand of Chennai below.

Burgeoning Infrastructure

 Infrastructure in Chennai is constantly growing and emerging into a major IT, automotive and an electronic manufacturing hub. Commercial demand is also witnessing a positive growth. A spate of new companies are investing and setting base in the city, creating more employment opportunities thereby stimulating the residential demand in and around the city. Infrastructure is being developed to suit the needs of various industries that are setting foot into the city. Focus is on the Outer Ring Road (ORR) were the Phase I (Vandalur to Nazarthpet – NH 4) has already been completed. ORR Phase II where land acquisition is in advance stages will boost the real estate activity along this corridor. Chennai and its adjoining cities are among the best for primary and higher education in the country today. Healthcare and medical facilities in the city are also among the best available in the country. Development of new hospitals, schools, malls and multiplexes in the emerging locations are all stimulating growth for the city’s infrastructure. Thus real estate property in Chennai is expected to witness positive impact backed by these developments.

Transport

The Public Transport lines across the city are taking a turn for the better with more bus services and routes announced by the government facilitating faster and better commuting. Along with this, the Chennai Metro Rail project which is expected to be ready by the end-2015, and the Monorail project which has recently gained momentum will drive residential prices along their respective corridors.

A End-User Driven Market

The residential market in Chennai, unlike in other Indian metropolitan cities, is driven by end users who constitute a major strata of the buyers. This buyer base provides a strong foundation to long term investments in the city’s residential market as it reduces market volatility.

Flexibility, Availability and Affordable Price Tags

It is recommended that buyers make an investment decision keeping in mind the various schemes and offers that are being offered by developers. Also in the current market the buyers have a wide choice of locations, apartment sizes and prices, which going forward may not be available due to the increase in demand in the near future. Apart from Chennai city, locations close to the IT hubs, specifically on the OMR and ECR is expected to witness a lot of traction and interest from buyers on the back of employment opportunities and development of social infrastructure. All these factors have significantly pushed the residential property in Chennai to bring it up the curve. Chennai emerges as a hot property for investment in residential units as it is expected to reap in tons in near future.

Best Real Estate Property In Chennai

Chennai real estate has witnessed a massive boom in the recent past significantly because of the IT/ITES empowerment in the city. This has majorly affected the investment rate in the area as  the city is burgeoning on a rapid pace and gives an extra mileage from other cities as well.

With the presence of numerous IT parks, Chennai has seen a lot of cosmopolitan  migration in the recent part as everybody wants to stay near to their work station. Hence people are migrating from different parts of India in search of better employment opportunities every day. With each passing day, the cosmopolitan grace of the city is growing. This has significantly increased  the demand of residential property in Chennai.

The outer ring road has emerged as a hot residential property in Chennai  due to strategic location. While South Chennai has continuously beaten the record in pulling the buyers interest , the Outer Ring Road (ORR) made Northern Chennai captured a good amount of traction among the buyers on the back of robust connectivity. Number of Grade A+ builders are showcasing their interest with a slew of upcoming projects in Chennai.

All the projects are crafted with finest details and offers world class amenities. The variety of Chennai properties ranges from flats, villas, pent houses, row houses etc.North Chennai was earlier known to be place for blue collar workers. But the place has witnessed a drastic change in the recent past with lots of giant companies entering into the space.

It has generate thousands of white collar jobs which also had an inverse effect on the real estate property in Chennai. Another factor that has significantly contributed to the popularity is the affordable prices. Demand for properties here is constricted to plots and land. but  good demand for flats is also seen .

The immense land bank that lies in the suburbs attracts many new  constructions of latest residential trends. The affluent constructional activities equipped with all the facilities in Chennai’s CBD has set new benchmarks  in  the development and expansion of its boundary. It has been observed that the areas close to the IT parks and business hubs have witnessed massive appreciation. The areas which have been hitting the list includes like ECR, Navalur, Porur, Varasvarakkam, Pallikaranai, GST Road, Velachery, Padur, Siruseri, Perumbakkam, Pallavaram are all swanky areas.

With the help of aids from all over the country and government, Chennai has witnessed robust development. With a spate of upcoming projects in Chennai, targeted to satiate the core needs and offer world class amenities, the residents are now spoilt for choice. They can relish every facility and enjoy a premium infrastructure in their given budget, which makes it an amazing deal for the investors and end users.