Property investment: Chennai beats rest of India

The high-end and mid-segment of the Chennai residential property market have seen maximum appreciation in capital values of 38 per cent and 40 per cent, respectively, during the first quarter of the current financial year.

In the high-end segment, Chennai was followed by Bangalore and Gurgaon with appreciation in capital values of 30 per cent and 29 per cent, respectively, during the same period compared to the first quarter of FY13, according to a report by Cushman & Wakefield.

In the mid-segment, Mumbai and Gurgaon occupied the second and third slot for highest increase in capital values of 19 per cent and 18 per cent, respectively.

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In Chennai, the high appreciation was a result of surge in demand due to upcoming infrastructural projects.

North Bangalore is expected to see an uptrend in capital values for the high-end category - in North-west side an uptrend in capital values is expected for both high-end and mid-end segments because of the rise in demand due to the ongoing metro work, while in East, a price rise in the mid-end category is likely due to continuous demand from the information technology population.

In the Mumbai market, despite the decline in overall market activity, capital values are expected to remain stable in the upcoming quarters thanks to the rising input costs.

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South Central Mumbai is expected to witness increased level of activity with a few prominent projects expected to be delivered in the coming months, the report said.

Gurgaon recorded higher appreciation due to the high demand from both end-users, the workforce working in the various companies located here and investors, coupled with the limited project completion.

The capital value of high-end property in South Central Delhi has witnessed a 15 per cent appreciation this year due to limited supply and high demand.

The capital values across the national capital region (NCR) are largely expected to remain stable. However, with quite a few projects in final stages of construction and new project launches at higher prices, Gurgaon is likely to witness increase in capital values.

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The uptick in special marketing initiatives and benefits offered by developers along with steady demand among end users, may result in marginal appreciation in capital values in some projects in Noida.

Shveta Jain, executive managing director (south Asia), Cushman & Wakefield, said: "Capital values have largely remained stable across most micro markets except for some key locations in NCR, Chennai and Bangalore. Prices are expected to remain largely stable in the coming months as developers will be looking mainly to boost sale and increase cash flows in projects being currently executed."