Uncertainty in land cost & Govt regularities break down commercial market in Chennai.

Pavan kumar, Chennai

14th January 2015

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Replies (4)

Hi Mr Pavan,
As per different sources, the new government at the Centre speaks in the right language .Business sentiments have improved in the wake of a stable government that is encouraging policies in terms of relaxation of FDI norms, and taking forward investment vehicles like the REITs. This is exactly the message builders have sent to the state government. In a document to state IT Secretary TK Ramachandran, builders said high land cost is an obstacle in bagging contracts from one large automobile firm and an IT company which are waiting to enter Tamil Nadu with plans to occupy 3 million sq ft.

Hemanth, Chennai

14th January 2015

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@ Pavan,
According to me, higher acquisition cost of land impacts competitive rental offering for the client when compared to Bengaluru or Pune . With IT firms expected to participate in the much-anticipated global investor summit in the state, easing the approval process will make Chennai attractive, builders said in the memorandum.

Srinivas , Chennai

15th January 2015

Hi Pavan Kumar,
Besides the effect of the Moulivakkam incident which has made end-clearances hard to get, fundamentals such as high land costs are making commercial realty unattractive. The areas that are bucking this trend are the most-sought-after stretches, like the pre-toll booth stretch on IT corridor Old Mahabalipuram Road. In this stretch, just 5% of office space is vacant and rentals have surged 35% compared with 2011 levels. One acre of land on this strip costs around Rs 35 crore, 40% more compared with four years ago. With large demand from corporations and nonviable business conditions, developers are looking for help.

Tilak, Chennai

14th January 2015

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Hi,

Completion certificates for multi-storey buildings have been few since June last year, when an eleven-floor residential block under construction crashed, killing more than 60 people. The Chennai Metropolitan Development Authority has since begun scrutinizing all building plans and completion certificates. This slowed the process of issuing completion certificate, which is necessary for a building to receive water and electricity supply, and for its commissioning.

Chandra mouli, Chennai

14th January 2015

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Hi Pavan,
I heard in news that , real-estate developers in Chennai are seeing high land costs and regulatory overdrives eating into business potential, even as corporations wait to set up offices in the city. At about 1.5 million sq ft, new commercial realty that came up in 2014 was the lowest in a decade.

subramanya, Chennai

14th January 2015

Comment

@ Pavan,
Against average demand of about 4 million sq ft, the supply will barely touch 2.5 million sq ft in the coming years, according to different sources, which said there was a clear possibility of the shortage of space driving business to locations such as Bengaluru, the top destination in South India for commercial real estate.

Gaurav, Chennai

14th January 2015