Chennai has been at the helm of activity and business like never before. With the growing number of IT and ITES companies in the city, there is also a growing number of population which has created demand for residential properties in Chennai. Most of the professionals as they move into the city opt for residential rental space. But due to a void in the demand and supply ratio the rental rates for residential properties in Chennai is on the upward trend.

Localities in Chennai like T. Nagar, Mylapore, Abhiramapuram and Adayar are some of the most attractive places for the investors for housing since they have good proximity to schools, hospitals and industrial areas.

However, establishment of IT Companies, higher education institutions and hospitals have brought out tremendous developmental scope to suburban areas such as Old Mahabalipuram Road, where unlike other places in Chennai have good availability of water and land area and unpolluted surroundings.

Chennai in the last few months have witnessed a hike in residential rentals in Chennai by 10 to 15 per cent, mostly in South Chennai, driven by the concentration of IT parks and offices in this up market area. The high demand for Chennai residential rentals can however be understood by the rental value at posh locations like Boat Club road which is about Rs 58 per sq ft.

While rent in areas such as Besant Nagar, Thiruvanmiyur, Adyar in South Chennai is about Rs 15 per sq ft; a rent differential of 7 to 10 per cent is seen between South Chennai and parts of the city such as Anna Nagar and Kilpauk.

Real estate experts has expressed concern that Chennai is likely to face shortage for residential spaces for the next three years as a large number of new IT and ITES projects have been proposed. This indicates more workforce into the city and thereby, more residential spaces. This influx of people into Chennai has also opened the doors for investment property, where people are seen investing in properties to be leased out to the professionals and expats who have thronged the city and are demanding better facilities and amenities.

The changing scenario

Rental income on residential properties remains to be attractive. Although the demand for the higher end properties in not as strong as the lower segments in the residential market developers have started large scale projects with improved amenities.

Industry experts are of the opinion that Landlords have not yet understood what the premium clients wants and cater to the demands of the high-end residential rental customers, mainly the expatriates who demand better and modern facilities as per their lifestyle.

While landlords are still sticking to lawns, electric fittings, woodwork, attached bathrooms, vitrified tiles and servants' quarters, the priorities set by the top-notch customers are amenities such as 24x7 power back up, modular kitchens and bathrooms with shower cubicles, good water (hot and cold-water mixers), better water pressure and stabilizers to counter power fluctuations. The expatriates also prefer to have their rental space to be painted tastefully with coordinating wood-work.

Luxury apartments are also catching up in the race as they are catering to the demands of the high-end customers and expats. Besides, Chennai rental homes in various segments like independent houses, bungalows, penthouses and condominiums are the new attraction in Chennai residential rental market.

Residential rentals in Chennai is in demand for all segments – rental apartments/flats and rental homes. Rental apartments in Chennai are mostly in demand among the professionals and executives who choose apartments of various specifications based on the number of rooms, facilities and budget.