The Hindu Business Line : Tiong Seng bags Chennai software park contract

TIONG Seng Contractors Pvt Ltd, a Singapore-based company, has bagged the contract to design and build a software park being jointly promoted by Singapore's Ascendas Pte Ltd and a Tamil Nadu Government undertaking, at Taramani in Chennai.

Work on the first phase, which will be spread over 5,00,000 sq. ft, has started and is slated for completion by April 2005. The cost of the first phase is Rs 130 crore. The building will be spread over 10 floors and will have a food court and vehicle parking on the first and second floors.

Ascendas had signed an agreement with the Tamil Nadu Industrial Development Corporation (TIDCO) to jointly develop the software park to house information technology and IT-enabled services companies. This is meant to be the second phase of the Tidel Park, which was inaugurated by TIDCO four years ago.

Ultimately, the software park being promoted by Ascendas and TIDCO will have 1.5 million sq. ft of built-up space spread over 15 acres. The total cost is estimated to be Rs 450 crore.

Tiong Seng, according to sources, bagged the contract following a competitive bidding process adopted by Ascendas. Continental Constructions, a civil contractor, is the sub-contractor for the structural part of the building.

TIDCO will hold an 11 per cent stake in the Rs 44-crore equity of the project with Ascendas having the balance stake.

According to the sources, Ascendas hopes to begin marketing the project from August. It does not expect any difficulty in marketing the space as there is good demand from software companies and those in IT-enabled services.

The next two phases will be taken up and completed in the next three years.

Typically, according to real estate industry sources, the Ascendas software park can hope to get a lease rent ranging from Rs 25 a sq. ft to Rs 52 a sq. ft; the second figure being the lease rental at the Tidel Park now including maintenance charges.

Originally, Ascendas hoped to complete the first phase by the fourth quarter of 2004, but the date has been pushed back by four months now because of the time taken to finalise the contractor.

It may be recalled that Ascendas signed an agreement with TIDCO in July 2002 to develop an IT complex in Chennai. As per the agreement, Ascendas, a subsidiary of Jurong Town Corporation of Singapore, will be responsible for the overall implementation of the project, including managing it and assisting in structuring its financing. It will also be the lead marketing agent for the project.

Both IT industry experts and real estate industry sources said there is good demand for ready-built and built-to-suit office space from the IT industry in Chennai. A lack of quality space in Chennai has resulted in a number of companies in the ITeS sphere going to other cities such as Bangalore and Hyderabad.

More Stories on : Software | Infrastructure | Tamil Nadu

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