The Hindu Business Line : Big demand for large floor plates from IT, ITES cos in Chennai

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Big demand for large floor plates from IT, ITES cos in Chennai

Nina Varghese

Chennai , Aug 3

About 26 million sq ft of commercial space is under construction here, of which around 16 million sq ft is expected to be delivered in the next 12 months, according to a review of market activity by Trammell Crow Meghraj, international property consultants.

New supply on Anna Salai and Nungambakkam is minimal, the review said. There is considerable development taking place on R.K. Salai, Egmore, Ambattur, Guindy and Porur. New commercial space is also being developed on the Old Mahabalipuram Road up to Siruseri.

About 90 per cent of the demand is for large floor plates from IT and ITES companies. These companies are taking up space in suburbs such as Old Mahabalipuram Road, Pammal Raod, Ambattur, Guindy and Ekkatunthangal.

Suburban properties

There is increasing demand for properties located in the suburbs due to better infrastructure, larger floor plates, lower rentals, availability of parking and less congested roads. Chennai is also witnessing vacancy rates of less than five per cent in new commercial space. Over 95 per cent of the new developments are occupied within three to eight months, the review said.

Both capital and rental values are showing a gradual upward trend. Grade A office space in the central business district CBD areas has commanded rates in the range of Rs 572 to Rs 758.1 ($12.3 to $16.3) per sq ft per annum for lease and Rs 4,130 to Rs 5,167 ($88.8 to $111.1) per sq ft for outright sale.

Office space in the IT corridor is available for lease and outright sale at Rs 423.24 to Rs 483.7 ($9.1 to $10.4) per sq ft per annum and Rs 2,530 to Rs 3,032 ($54.4 to $65.2) per sq ft, respectively.

Rentals and capital rates in suburbs are prevailing at Rs 302 to Rs 409 ($6.5 to $8.8) per sq ft per annum and Rs 2,023 to Rs 3,032 ($43.5 to $65.2) per sq ft, respectively.