Financial Daily from THE HINDU group of publications
Monday, Nov 22, 2004
Industry & Economy
Real Estate & Construction
Info-Tech - Infrastructure
IT policy drives up realty prices in Guindy, Ambattur
Chennai , Nov. 21
WITH land and real estate prices on the Old Mahabalipuram Road (OMR) skyrocketing, property developers are turning to the old areas like Guindy and Ambattur industrial estates and the GST (the Grand Southern Trunk) Road.
In the last one year, land prices on the OMR have gone up by more than 40 per cent. For instance, in Sholinganallur the price is about Rs 2.5 crore an acre (close to Rs 14 lakh a ground). Beyond Sholinganallur the price comes down along the stretch of the road from Rs 1.2 crore to Rs 1 crore.
The price for land within the industrial estates in Guindy and Ambattur has also gone up by almost 50 per cent in the last one year, according to real estate sources. The current price in the Guindy estate ranges from Rs 40 lakh to Rs 50 lakh a ground.
Land at Ambattur costs Rs 8-10 lakh a ground, and the prices are going up steadily. (The land price in Thirumangalam, which is a residential locality near Ambattur, is about Rs 40 lakh a ground).
The spurt in land prices within the industrial estates was helped by the State Government's IT policy, which allows IT companies within the estates, the sources added.
According to market sources, the Eveready-Khivraj deal to develop the 1.3 million sq ft Khivraj Tech Park in Guindy industrial estate on 8.5 acres would push up land prices in the area. The land was acquired at a price "considerably higher than market rate".
Developers said that they have been advised to look at sites other than OMR for the IT industry.
Besides the land price, the other disadvantages of the OMR are lack of supporting infrastructure and distances that employees have to commute.
The availability of transport facilities to the industrial estates with residential areas, educational institutions and hospitals in their vicinity are being cited as advantages.
The demand for quality real estate in the city has been spurred by major brands like Dell, IBM and Verizon scouting for space to set up shop or expand, they said.
However, city planners and developers expect the city's infrastructure to come under severe strain if all the projects - of about 40 lakh sq ft - that have been announced so far were to take off.
They said that the city does not sufficient infrastructure, including roads, drainage and water for such development. Many of the projects that have been announced are not expected to leave the drawing-board stage.
One of the projects in the offing is that of ETL Infrastructure Services Ltd. The company is setting up its second facility in Perungudi, which would cover 6.5 lakh sq ft, at a cost of Rs 120 crore, said Mr S. Thiagarajan, Advisor, ETL Infrastructure Services.
This would be a campus-like facility on 25 acres. The funding would come from the parent company, Elnet Technologies, and other investors, he added.
Two more floors would be added to the first software park, Elnet Software City, located next to Tidel Park.
The Shapoorji Pallonji group is building about 10 lakh sq ft on its own property on the OMR.
The Bangalore-based RMZ Corp is extending its RMZ Millenia Business Park project by adding another 1.7 million sq ft, bringing the total space available to 2.2 million sq ft, the company spokesman said. The facility is coming up in a 15.75-acre campus.
Recently, Accenture tied up with the Rattha group to build two lakh sq ft, with the option for another four lakh sq ft, over three years.
The total project cost in the first phase is Rs 60 crore, with Accenture bringing half the amount. The Ratthas, who have interest in garment manufacturing, have also invested in land in the area.
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