A number of the larger IT companies have bought large tracts of land in the outskirts of Chennai and yet others have leased out space for their companies in the city. For those companies looking at putting up their own buildings in the city, the two routes connecting Chennai to seaside resort Mahabalipuram have become an attractive destination.

While Pentafour Software already has its unit located there in Kottivakkam, on the old Mahabalipuram Road. Tata Consultancy Services, one of the largest companies in the software sector, is in the final stages of constructing its own sprawling campus. PolarisSoftware Lab has also bought a few acres to set up its own software factory.

Yet another buyer reportedly scouting for land in the area is Infosys Technologies, which has already approached the government agencies for approval to set up shop in the city. Official sources say that Infosys could be looking at about 25 acres to put up its own premises.

Ramco systems, a Chennai-based software product developer, already has its own building in the neighbouring Taramani area. Silverline Industries, meanwhile, has chosen to go the other way, to Anna Nagar, while software major Satyam has its own building in Alwarpet, the centre of the city.

Wipro Information Technology is learnt to have purchased a commercial complex in the industrial belt Guindy region for its Chennai operations and so has Mastech.

On the construction front, Chennai also has the TIDEL software park, with about 1 million square feet of built up area coming up.

While this is the trend on the buyers part, there are more companies which areleasing out huge chunks of commercial property for their office space. Electronic Data Systems (EDS) has leased close to 50,000 square feet for its Chennai operations while Infosys has leased out 27,000 square feet. TCS has three buildings and Satyam has two.

Other heavyweight players include HCL, Cognizant Technologies, DSQ, Polaris, Indigo Technologies, Software Solutions India, Silverline Industries, Qualcomm and Pentafour.

Several other companies which have expressed interest in setting up operations in Chennai and are currently scouting for properties include Computer Associates, DE Shaw, Sun Microsystems, SAP International and Citicorp Overseas.

In the downtrend real estate market, software companies seem to be the only ones going shopping for property. Over the past six months at least the biggest deals struck in the property market have been associated with the software companies, say property consultants. And these are the companies which have also kept the rates going.

Currently, the rulingrates stand at around Rs 30-Rs 35 per square feet of prime rental space. And for suburbs like Guindy, where Infosys is located, the rentals are around Rs 25 to Rs 30 per square feet for prime property. In the absence of demand from these companies, the rentals would have been lower by at least 10 per cent to 12 per cent is the industry estimate.

As for land purchases, though industrial land still continues to hold a premium, the rates have gone down marginally. Here software developers are again the major buyers with auto-ancilliaries coming second. The price of land along the old Mahabalipuram road ranges between Rs 18 lakhs-Rs 25 lakhs an acre.