Chennai Economy thread

[kg4129]

Great Mr. Kalyana Raman Srinivasan

[Mad 4 Madras]

Usual minds think money buys money, it is these extraordinary unusual minds thinks hardwork and commitment earns money. Really God has bestowed him a lot which now he bestows to others. He himself would be GOD for those near his village. Hats Off!

[kannan infratech]

Thanks Zailsingh.

Touched and moved.

Though I had known about this company, I was not aware of the story behind. I used to wonder that the name Kal Raman was a bit unusual.

Probably this will inspire SSCians to do their bit for the society - giving back in whatever small way, they can.

Come On Guys!

[Leo_r]

Heard of the Success Story of Mr Prem Ganapathy!!!

Link reproduced from Coimbatore thread..

http://business.rediff.com/slide-sho...dosa-plaza.htm

[Indian Sun]

Another awesome story, it was featured in Rashmi Bansal's (of the Stay Hungry Stay Foolish bestseller fame) book "Connect the Dots" which I am currently reading.

[ranga]

Originally Posted by Leo_r

Heard of the Success Story of Mr Prem Ganapathy!!!

Link reproduced from Coimbatore thread..

http://business.rediff.com/slide-sho...dosa-plaza.htm

Another amazing story of enterprise.They say MUMBAI as the city of dreams.if u dream big and work hard towards achieving ur ambitions MUMBAI MATHA will never let u down.It is intersting that Lord Ganapathy is the popular GOD in Mumbai.

[chennaidesi]

This is a question to all forumers recently there is a spate of integrated townships announced in Oragadam,Sriperumbudur and OMR region. Is there market for all the projects, I am sure OMR is O.K. because it is IT centric and the avg pay is high so 90% can afford 30 lakh range for houses but in Oragadam where an avg worker is payed say 7000 rs per month is it possible to market those thousands of apartments?

[ranga]

Originally Posted by chennaidesi

This is a question to all forumers recently there is a spate of integrated townships announced in Oragadam,Sriperumbudur and OMR region. Is there market for all the projects, I am sure OMR is O.K. because it is IT centric and the avg pay is high so 90% can afford 30 lakh range for houses but in Oragadam where an avg worker is payed say 7000 rs per month is it possible to market those thousands of apartments?

There are many employees from outside chennai & outside TN who are interested to book apartments/villas in oragadam-Sriperumbudur belt don't u know that.Oflate many from chennai and TN in general want to buy flat in chennai and that has galvanised the demand for the same and that is the reason many big projects are coming up.Are they so foolish to construct huge residential projects when there are doubts about demand.I find many chennaites underestimating the potential of chennai whereas outsiders could easily gauge the same.For ur information many investors from A.P have invested in large parcels of land up to Tindivanam while the locals are still doubting the potential of their own place.Its regrettable that tamils don't decide fast.

[Arasu]

You are probably right about this as you are about most things. Your experience gives you a better insight than most folks.

Somewhere around 7 years back, when I was travelling in a suburban train in Chennai during my annual soujourn, I happen to sit next to 2 Telugu folks who were conversing between themselves about buying land around Tindivanam and Kanchipuram. On further inquiry, I figured out they were scouting for lands on behalf of rich investors in AP.

You are right. Telugu people are enterprising and risk taking. They see opportunities much before most Indian people. A case in point, when I took some IT training in Chennai quitting my cushy job with a stock broking firm in Bombay, I was shocked to see that almost all the candidates were from AP! Soon after the completion of the training, one of my friends went to set up a similar training program in New Delhi on request from a Delhi based company. When I joined with him in the initial efforts, I was once again shocked to see that 100% of the candidates were from AP.

Each of them had paid about 3-4 lakhs for the training and the promised visa to US. I think not only Tamils but most of Indian would not be willing to spend that kind of money for the training and just a (verbal) promise of a visa to US.

[R2IChennai]

Originally Posted by ranga

There are many employees from outside chennai & outside TN who are interested to book apartments/villas in oragadam-Sriperumbudur belt don't u know that.Oflate many from chennai and TN in general want to buy flat in chennai and that has galvanised the demand for the same and that is the reason many big projects are coming up.Are they so foolish to construct huge residential projects when there are doubts about demand.I find many chennaites underestimating the potential of chennai whereas outsiders could easily gauge the same.For ur information many investors from A.P have invested in large parcels of land up to Tindivanam while the locals are still doubting the potential of their own place.Its regrettable that tamils don't decide fast.

Real estate business in blore and chennai
are filled with teluguite

[chennaidesi]

Originally Posted by ranga

There are many employees from outside chennai & outside TN who are interested to book apartments/villas in oragadam-Sriperumbudur belt don't u know that.Oflate many from chennai and TN in general want to buy flat in chennai and that has galvanised the demand for the same and that is the reason many big projects are coming up.Are they so foolish to construct huge residential projects when there are doubts about demand.I find many chennaites underestimating the potential of chennai whereas outsiders could easily gauge the same.For ur information many investors from A.P have invested in large parcels of land up to Tindivanam while the locals are still doubting the potential of their own place.Its regrettable that tamils don't decide fast.

Ranga Chennai has good potential for flat I dont doubt that, but it is mostly in City areas and nearby suburbs and in OMR the story is different because IT pop. can afford to do it but Oragadam is different story. Since 2007 or 2008 chennai is considered as end-user market only. Slowly it is also becoming investor market I think that's why i raised this question. This is a news that lot of Telugu people are investing in Chennai and I am happy for that. Usually I dont see a trend like other state people showing more interest in Chennai real estate until couple of years ago.

[satchitananda]

Originally Posted by chennaidesi

This is a question to all forumers recently there is a spate of integrated townships announced in Oragadam,Sriperumbudur and OMR region. Is there market for all the projects, I am sure OMR is O.K. because it is IT centric and the avg pay is high so 90% can afford 30 lakh range for houses but in Oragadam where an avg worker is payed say 7000 rs per month is it possible to market those thousands of apartments?

My take on this will be:

a) Chennai Metro is rapid expanding towards OMR on South, GST on SouthWest and Oragadam-Sriperumbudur on West. What was unthinkable 5 years ago is already reality on several issues.

b) Chance of either SR or Metro gets increasingly a reality once Phase I is accomplished. So if either of these areas dont have one, atleast there will be serious talk of it by 2020.

c) The sheer volume of industries coming in Sri-Oragadam belt implies there are going to be not just workers of Rs 7000/mo. but also management who could add to the consumption. Also many of these companies have some % of their staff from abroad who mostly will prefer core Chennai , but given an incentive may choose to relocate.

d) Lastly, additional facilities like these will reduce the pressure to be centered around the core of the city. (at least in principle)

[TShyam]

Originally Posted by chennaidesi

This is a question to all forumers recently there is a spate of integrated townships announced in Oragadam,Sriperumbudur and OMR region. Is there market for all the projects, I am sure OMR is O.K. because it is IT centric and the avg pay is high so 90% can afford 30 lakh range for houses but in Oragadam where an avg worker is payed say 7000 rs per month is it possible to market those thousands of apartments?

It all depends on the supply demand equation. The projects announced are just humongous. 1600 units, 2200 units, 2500 units and I am sure there are 100's of bachcha developers building their own 10 - 50 unit apartments. I wont be terribly surprised if someone with an intricate knowledge comes and says that around 50 - 60k units are being built in the Oragadam belt alone.

No one knows for sure. For example if someone had told me that 2 crore square feet of commercial property will be lying vacant on OMR in 2010, I would have laughed at him. It was generally perceived OMR was an unassailable juggernaut. But it showed that a flood of property coupled with a slow down can shake any dynamics. OMR is still a fundamentally strong area but we see a large supply overhang particularly in the commercial space.

Same thing may or may not happen in Oragadam. I am more confident about the sub 20L properties, but not very sure of the overpriced ones (>30L). That area has not even developed proper social infrastructure (good schools, hospitals, roads, water supply etc). So I will say I am cautiously optimistic about the real estate scenario there. If you are an investor, go for the low end properties, if you have more than 30L, you are better off buying apartments (albeit a relatively smaller one) in the upcoming areas of south Chennai like Medavakkam, Madipakkam, East Tambaram and renting it out. I mean high end properties in Oragadam may turn out to be the ultimate "sucker's trade" in Chennai's real estate this decade.

[chennaidesi]

That's what I am thinking homes like affordable housing in the range of 15L to 20L will sell fast even 10,000 to 15,000 homes in that range can sell in say 3 years time but how much is the potential for 30L> homes?

The irony here is most of the apt announced are high end 30L + homes like Hira. etc.

Thanks for the replay guys.

[karthikarthik]

Originally Posted by Arasu

You are probably right about this as you are about most things. Your experience gives you a better insight than most folks.

Somewhere around 7 years back, when I was travelling in a suburban train in Chennai during my annual soujourn, I happen to sit next to 2 Telugu folks who were conversing between themselves about buying land around Tindivanam and Kanchipuram. On further inquiry, I figured out they were scouting for lands on behalf of rich investors in AP.

You are right. Telugu people are enterprising and risk taking. They see opportunities much before most Indian people. A case in point, when I took some IT training in Chennai quitting my cushy job with a stock broking firm in Bombay, I was shocked to see that almost all the candidates were from AP! Soon after the completion of the training, one of my friends went to set up a similar training program in New Delhi on request from a Delhi based company. When I joined with him in the initial efforts, I was once again shocked to see that 100% of the candidates were from AP.

Each of them had paid about 3-4 lakhs for the training and the promised visa to US. I think not only Tamils but most of Indian would not be willing to spend that kind of money for the training and just a (verbal) promise of a visa to US.

When one of my friend did a course on SAP certification, he refers SAP as state of Andhra Pradesh . In IT, SAP is still dominated by Telugu people.

[ferrari_fan]

Originally Posted by TShyam

No one knows for sure. For example if someone had told me that 2 crore square feet of commercial property will be lying vacant on OMR in 2010, I would have laughed at him. It was generally perceived OMR was an unassailable juggernaut. But it showed that a flood of property coupled with a slow down can shake any dynamics. OMR is still a fundamentally strong area but we see a large supply overhang particularly in the commercial space.

Actually the case of OMR is a little different..

Now that the recession is largely behind us and demand is picking up again, many IT parks down OMR are still vacant because of the STPI benefits expiring, because of which tech companies prefer SEZs now..

The glut is not really to do with the quantity of supply or the recession in this case - it's to do with the type of supply available not matching the type of supply in demand, which I guess developers seem to have misread..

[seku]

One more hero of this week

http://www.ndtv.com/article/india/he...e-hungry-63179



Madurai: He was our Catch last week, an incredible story of a young chef who shunned the lure of a job abroad and a fat salary to feed the hungry and abandoned of Madurai. This is Naryanan Krishnan, in the race for CNN's hero of the year, telling his story to NDTV. (Catch of the Day: He brings hot meals to India's homeless)

He does it all himself - slices vegetables, prepares the rice - using his skills as a chef to cook large meals. Then, he takes food packets to the destitute and mentally ill, often feeding them with his won hands.

Krishnan says he had an offer to be a chef at a five-star hotel in Switzerland, but a turning point in 2002 set him on a different course. "On that day I saw a hungry man eating his own human waste. I was shocked. Quickly I ran and bought him idlis. His face smiled with gratitude", Krishnan, now 29, recalls.

Akshaya Trust, which Krishnan runs, feeds around 400 people thrice a day. All through public donations. As one of the top ten picked globally and now competing for the CNN's hero of the year award, Krishnan has already won $ 25,000. If he wins the top prize he will get $ 100,000.

He needs that money to complete his Akshaya Home, a Rs. three-crore rupee shelter for 400 abandoned and mentally ill people.

"We will rehabilitate 400 people. They can work and get back to their families. They can, above all, die with dignity. They are now moving as dying destitutes." Krishnan says.

To win and make the shelter a reality, all Krishnan needs is lots of Indians voting for him at the CNN website.

[TShyam]

Originally Posted by ferrari_fan

Actually the case of OMR is a little different..

Now that the recession is largely behind us and demand is picking up again, many IT parks down OMR are still vacant because of the STPI benefits expiring, because of which tech companies prefer SEZs now..

The glut is not really to do with the quantity of supply or the recession in this case - it's to do with the type of supply available not matching the type of supply in demand, which I guess developers seem to have misread..

Yeah you are right. Its not that the developers didnt know the STPI will expire in 2010. It was a well known fact, but still they somehow hoped and anticipated that their supply will be taken up by the IT companies. Similarly lot of developers in Oragadam are building premium apartments hoping and anticipating demand will somehow come. The actual reasons are different but the pattern appears similar. That worries me. They may go wrong in anticipating the type of demand that is coming up.

Another factor is that when the dot-com bubble burst, the American Federal Reserve lowered the interest rate which created the housing bubble. Now to prevent the slow down due to housing bubble, they are printing too much easy money which I beleive will cause the next bubble. The worrying thing is that most of the easy money is finding its way into emerging markets. So I fear a emerging market stock market and property bubble may burst somewhere in the middle of this decade due to this easy money. We may see a rapid rise of our stock markets (to say 30K or 40K) and property prices in the next 5 years. And most of the money may find itself in places like the Oragadam belt. So people who invest in those properties may enjoy a good ride but they should be prepared to exit at an appropriate time.

[Arasu]

Originally Posted by karthikarthik

When one of my friend did a course on SAP certification, he refers SAP as state of Andhra Pradesh . In IT, SAP is still dominated by Telugu people.

Yes, I was refering to SAP certification training and when it all started it was in Bombay and Chennai and the training was quite expensive. People had to shell out in lakhs of rupees which was hard to come by then.

The cost of training has come down since then. And I hear Hyderabad is littered with SAP training centres these days. Now, everyone goes to Hyderabad.

[kannan infratech]

The problem with most of the Realty Developers is that they tag on their projects to IT Development, which is easy money (IT Guys are the easy targets for the new townships and apartments).

Chennai has tremendous strengths , other than IT also. Catering to these other segments may be a wiser move. Then, it leads us to Pricing. IT executives (Tech or accounts or admin) are paid much better and they do not mind to buy premium flats. But other segments may not come in big way to buy Premium flats.

Then it leads to Affordable Housing. (Max Limit Rs. 20 L). Most of the builders have sensed this and most of the future projects will also be in this segment.

During the pre recession period, realty companies announced premium housing and accepted huge investments from PEs and FIIs. The profit margins projected are much higher for premium than affordable housing. So they are not able to go back on that now.

PULI VAAL PUDICHA KADHAI. (Caught in a vicious circle).

Affordable Housing will be a big hit in Chennai. The Developers should package the same correctly.