With both DLF IT SEZ and Tata’s Ramanujan IT City nearing completion in Chennai, there are no major additional supply of IT space over the next two years.
There could be a short supply of IT SEZ space over the next couple of years with the next major supply of IT space anticipated only in 2018.
Work on Ramanujan IT City by Tata Realty and Infrastructure, with total space of about 4.5 million sq ft, is in the final stages. Over 800,000 sq ft has been pre-leased. In the last three years, it has completed and leased out 3.4 million sq ft of IT space to domestic and multinational companies.
Lease rentals have doubled to over ₹ 90 per sq ft a month, apart from maintenance and other charges. When the first lot of IT space was commissioned in mid-2012, TRIL fetched about ₹41 a sq ft.
C Velan, Executive Director and CEO, TRIL, said the demand forecast for IT space is buoyant in the current year and the coming year. Chennai typically sees absorption of about 2-3 million sq ft of IT space.
CybercityThe 25-acre Ramanujan IT City, just a few hundred metres down the IT corridor on the Old Mahabalipuram Road will also house a 120-unit serviced apartment by Indian Hotels Company and a 1,500-seat international convention centre targeted for completion in 2018.
Amit Grover, National Director-DLF Offices, said DLF’s Cybercity Chennai has begun the final phase of construction of 1.6 million sq ft of IT space in August. This additional space is scheduled for delivery in one year.
Over 5.6 million sq ft is in operation at the 44-acre campus in the southern part of Chennai. Over 400,000 sq ft of space has been pre-committed and discussions are on for about 200,000 sq ft. There is strong activity in the banking, financial services and insurance space in Chennai, he says.
Lease rates range around ₹70 per sq ft a month.
Completion of the two of the largest IT spaces within the city is a landmark in itself, say real estate watchers. Apart from the 2 million sq ft space available at Chennai One Hub, there is no major supply anticipated till 2018.
A total of about 7-8 million sq ft of IT space will hit the market during 2018 when four major developments are expected to be completed by leading developers such as K Raheja, Brigade and Embassy to the west and south of Chennai.