On the back of the revival in the infotech sector after an economic slowdown, nearly 3.70 million square feet of additional commercial space in Chennai was taken up in 2010, a rise of 32% over the previous year.
"There was clear growth visible. It was definitely a better year than 2009. SEZ space continues to see good absorption. And this year, we expect more than four million square feet to be absorbed," Rajesh Babu, chief consultant, RECS Group, a real estate consultant, said.
IT and banking back offices, which are Chennai's inherent strengths, continue to be the main drivers of demand for commercial real estate.
Medium-sized office space for corporate offices are sought after in the central business district (CBD) and surrounding areas.
The most preferred locations for IT and ITES continue to be
1. Guindy,
2. Perungudi and
3. Mount Poonamallee Road
as they are located closer to the city.
Among large deals in the SEZ space that were signed and sealed were a 5.50-lakh-square-feet deal by Cognizant in Manapakkam, followed by L&T Infotech with a 2.80-Lakh-square feet transaction. Other big ticket transactions in the SEZ space includes a two-lakh square-feet agreement by WNS in DLF IT Park, Zoho acquiring 1.80 lakh square feet, and Barclays Bank signing up one lakh square feet. Clearly, IT companies expanded more in the SEZs than in STPI-approved technology parks in and around the city.
However, there were some large STPI deals as well: 2.0 lakh square feet each signed by Bank of America and HSBC in SP Infocity in Perungudi, 1.60 lakh square feet by banking giant RBS in IndiaLand in Ambattur and 1.10 lakh square feet deal by NokiaSiemens Networks in Pacifia IT Park on OMR.
"There was a definitive improvement in 2010. Enquiries for space was very good with a clear jump in deals getting concluded. The first quarter of calendar year (January to March 2011) may not see any significant deals getting announced, but we see traction happening post March," N Hariharan, office head, Cushman and Wakefield, global real estate consultants said.
The rentals, however, have remained largely unchanged or witnessed marginal increase. "We are now in the era of stable rentals. That is largely due to excessive capacity built-up and supply overhang," Rajesh Babu said.
Deals were struck in the region of Rs 46 a square foot in Guindy in the STPI space while SEZ rentals in Guindy was around Rs 50 to 52 a square foot. On the IT Corridor (upto Perungudi), rental deals were flat at Rs 33 to Rs 35 a square foot while beyond Perungudi it was priced between Rs 22 and Rs 25 a square foot.
Though there is no clear data to quantify extent of idle capacity, industry sources say that as much as 10 million square feet of space is ready and that may dampen any rise in rentals.
Source: http://timesofindia.indiatimes.com/c...ow/7505345.cms
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