The revolutionary policy shift in favour of an opened economy by the Indian Government in 1991 brought tremendous growth to all sectors on the wheel of Indian economy; especially the importance was stressed on developing infrastructure in the country. The main obstacle for Indias development was once attributed to be lack of infrastructure and pathetic policy of negligence by administration in this sector as well as housing problems. The situation changed with the policy shift and lot of attention and investment were diverted in developing road network, housing, water supply schemes, eAdministration and education.

Development of road infrastructure ultimately resulted in developing and connecting small cities and villages with major cities and influx of manpower to major cities as well as creation and development of many suburban areas in Bangalore, Chennai which includes places like Mamanddur, Chengalpet in the southern end which is 78 kms from Chennai city and on the Bangalore highway the growth has extended upto Sri perumbudur, Cochin in the State of Kerala, Hyderabad (called Cyberabad), Mumbai, Delhi NCT, Noida, Ghaziabad, Faridabad, Gurgaon and many places. Development of these places have necessitated creation of more housing and offices for the Corporate houses who have plans to settle down in these cities and a forecast by a well known financial consultant has indicated that the Indian real estate sector can grow from the current $12 billion to $90 billion by 2015 and India is the most promising real estate market in Asia.

Among the four metropolitan cities in India, the port city of Chennai has a distinct advantage of a major corridor to Southern India and the finest English language pronunciation and vast population of literates. Also, it has a distinct advantage in terms of residential rental and capital values. While Mumbai and Delhi are commercially important, their rental and capital values are much higher than Chennai. Lower operational cost, availability of land and low cost of accommodation has been the major attracting factors for many domestic and multinational companies to settle their operations from Chennai.

On the advent of many multinational corporate houses other than IT and BPOs, like BMW, Nokia, Hyundai, and St Gobain setting up their state of the art production units, real estate business in this Southern Metropolis is on record growth and apartments which were

available at the rate of Rs.75 Lakhs per flat in 2003 has touched the Rs.1 crore level within the last two years period, despite all odds of lack of infrastructure and all time scarcity in supply of potable water and electricity. The Tsunami effect brought the prices a bit lower for sometime but it has again started rocketing up in sea-front areas like Mylapore and have seen a remarkable increase in bookings and the cost of a flat at rate of Rs.50 lakh and above depends on the facilities offered.

The Government of Tamil Nadu brought out the ITeS policy of the government of Tamil Nadu in 2003 with their intention to make Chennai the ITeS hub of the entire country and going to ensure greater focus on other industry segments such as BFSI, healthcare, education and design and engineering. Already, Chennai has a major chunk of 15% to 20% of the total software export business in India and now the ITeS sector is on the move and this would bring a further growth on the already heated up Real Estate market in the city.

In Geological terms, Chennai is considered to be in a less dangerous zone and other than the recent Tsunami calamities there were no major reported incidents of seismic impacts in the past few decades. Also, Chennai has a good record in reported crimes compared to other cities in India. All these facts have invigorated the confidence of business and investor community in India and abroad to look towards Chennai as a good investment destination.

Places like T. Nagar, Mylapore, Abhiramapuram, Adayar are the most attracted places by the investors for housing since they have good proximity to schools, hospitals and industrial areas. Also, establishment of more 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. But pollution and other infrastructural crunches have affected the central Chennai area where it has become very difficult to obtain the environmental clearance from the Central Government for projects exceeding Rs.50 crores and above. In the residential market, Chennai witnessed a steep price increase in 2004 with an average of 10% increase in capital and rental values. Residential land and Apartment prices have surged with prices in the city ranging from Rs.3,000 Rs.8,000 per Sq.ft. and areas like Boat Club have even higher prices. Also, the NRI investment also saw considerable improvement in the last 4-5 years. Apartments in range between 8 to 20 lakhs were in good demand and more and more developers engaged in the construction of luxury apartment business due to higher demands from the relocating executives and other professionals. Residential plot sale and steep increase in prices expected even in city outskirts like Kulathur, Teachers Colony, Britania Nagar, and Vinayaka Puram where prices were at the rate of Rs.65 per sq.ft to Rs.100 per sq.ft. in 2000 have surged up to Rs.250 or more per sq.ft. It is expected to further increase due to the establishment of a large number of educational institutions like the one from the famous Velammal Educational Society Engineering College and schools as well as churches and unpolluted atmosphere attracting people to these areas.

In the retail market segment there are at least 10 major investments in shopping malls coming up Chennai, in areas like N.M. Road, Vadapalani,P.H.Road,Anna Salai, C-IN-C Road, OMR (Plans for 3-4 Malls), Velacheri and N.H.Road and will be operational shortly an it will bring to an end of Chennais quest for malls.

Fraudulent property transactions which were one of the nightmares for all sections of buyers and investors have come to an end with the introduction of computerization of records and insurance cover which protects against malpractices and the National Housing and Habitat Policy, 2005, with provisions of `title insurance' in the country.

Despite all efforts Chennai facing infrastructure problems like narrow roads, transportations facilities, city cleanliness like and potable water sources which are considered to be major obstacles for development of this important city in Southern India.