Developers flock to Chennai's IT Corridor

By SiliconIndia   |   Wednesday, 18 February 2004, 08:00 Hrs
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CHENNAI: With huge investments in the pipeline in the IT and infrastructure sectors and the extended metro railway (MRTS) commissioned, residential property developers are flocking to Chennai’s IT corridor, which is expected to become a six-lane IT Expressway by the year-end, as announced by the state government recently, reports Economic Times.

Almost all the leading developers have launched residential projects in the belt, particularly in and around the Perungudi region. Jain Housing has been an early bird. Three months ago it announced a project of four blocks of 27 flats each priced at Rs 1195 per sq ft.

“Initially the response was lukewarm. But soon after the announcement of the six-lane road project, demand has increased multifold,” said a Jain Housing official.

Last week, Heritage Property Development Company announced a mini township plan of 82 independent houses at Perungudi costing upwards of Rs 13.5 lakh. The entire lot is claimed to have been sold out within the first two days. Another builder, True Value Homes, has priced its project at Thorappakkam in the corridor at Rs 1150 per sq ft (on offer).

Other players like Arihant, Ceebros, Anand, Land Marvel, Rams and VijayaShanthi and Maruthi Foundations and Ramaniyam also have projects lined up for this region. While some of them have already launched projects, some are still in the process of finalising land deals.

The target market for these projects is the growing segment of IT professionals working in companies located on the corridor. Companies having software development centres in the area include Cognizant, Infosys, TCS, Xansa, Polaris and Wipro. The World Bank is also setting up its own BPO facility here. There are also a couple of projects announced by the state-owned Elcot, like Elnet software city.

The going rates for residential flats range between Rs 1000 and Rs 1200 per sq ft. A couple of developers are said to be looking at the option of revising their rates upwards thanks to the sudden spurt in demand. Land prices are quoted in the range of Rs 8-10 lakh per ground.

“Demand for suburban residential property has increased during the last two quarters, primarily due to the increasing number of IT/ITES professionals working in the IT corridor and the falling housing loan interest rates. Majority of this demand has been for the budget segment,” says the latest report of Colliers International on the Indian property market.

Till date, suburban residential areas like Velacherry and Madipakkam have been the residential options particularly for young IT professionals, mainly due to their affordability when compared to areas within the city and to some extent, due to the proximity of certain sectors to the IT corridor.

Currently, the residential capital values for areas within the city like Adyar, Besant Nagar and Alwarpet/RA Puram are between Rs 1800 - Rs 2000 per sq ft, while rental values are around Rs 9-10 per sq ft per month. “Capital and rental values have remained unchanged across the city in spite of the large amount of supply across the city.

This is mainly due to increased end-user buying. Yields on residential property in Chennai have been between 4-6%,” according to Colliers International.

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