24 March 2017

Chennai - Infrastructure initiatives likely to bring positivity among the investors if implemented on time

In the State Budget 2017-18, Tamil Nadu state government has planned a number of key infrastructure initiatives that are likely to provide a long-term benefit to the overall state economy. The state government highlighted that the pace of economic activity is picking up with increased private and public investments in key sectors, that it is expected to boost the economic growth to 9% during the year 2017-2018.

Following are the key announcements in the state budget that are likely to impact the Chennai Real Estate sector. 

Key Highlights

Infrastructure

  • 4 laning / six laning and improvements of 9 important roads inter-connecting major highways in and around Chennai of a total length of 141.60 km

  • Allocation of fund for land acquisition for Section-I of the proposed Chennai Peripheral Ring Road, i.e. Ennore Port to Thatchur on NH5

  • Three metro rail corridors under Phase-II covering a total distance of 107.5 km included in the JICA Rolling Plan

  • INR 2,000 crore for the Tamil Nadu Infrastructure Development Fund (TNIDF) for completion of spill over works in infrastructure projects in Chennai Mega City Development Mission undertaken by Greater Chennai Corporation

Industrial and
Construction sector



  • Global Investors Meet to be held during 2017-18 to attract further industrial investment

  • Establishment of Aerospace Park on 268 acres of land in Vallam-Vadagal SIPCOT Industrial Estate, Kancheepuram

  • Establishment of Plastic Industries Park in Ponneri by Tamil Nadu Industrial Development Corporation (TIDCO), in association with SIPCOT

  • Promotion of electronic hardware industry hub at Sriperumbudur, with the support of Government of India

  • Temporary residential units at major locations around Chennai and other cities in Tamil Nadu on rental basis to employers to accommodate their construction workers

  • Establishment of a textile cluster in Kancheepuram as one among 4 clusters under the second phase of JICA assisted Tamil Nadu Investment Promotion Programme to develop product specific integrated MSME clusters

Tourism
  • Development of Coastal tourism circuits in Chennai, Mamallapuram, Rameswaram, Manapadu and Kanniyakumari under the Swadesh Darshan Scheme

Research View

The key announcements in the budget are strategically focused on developments and investments in city outskirts aided with ease of connectivity in and around Chennai. In our opinion, the transport infrastructure initiatives are likely to develop positive sentiments among the investors and also pull in developer’s interests in the peripheral locations of Grand Southern Trunk Road, Old Mahabalipuram Road, Industrial corridors towards Sriperumbudur and link roads to Mount Poonamallee Highway. If implemented adhering to the timelines, the initiatives are expected to give a major uplift to the real estate investments and increase capital values in the surrounding micro-markets, but the implementation phase should be fast track in order to avoid bottlenecks to the present developments.

As most of the announcements in Global Investors Meet 2015 are yet to gain momentum on the ground, the announcement of next Global Investors Meet will be unable to bring in enthusiasm among the stakeholders. We also anticipate that the initiatives on industrial establishments in Kancheepuram, Sriperumbudur and Ponneri regions will enhance the industrial and warehousing corridors towards the west and north of the city. 



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