Realty short in supply in Chennai

Chennai, March 30 | Updated: Mar 31 2006, 05:30am hrs
For the realtors in Chennai, 2006 will become a boom period. The expected huge shortfall of commercial space will see the rental prices of official as well as residential areas jump manifold in most part of the city, said real estate sources.

Given an all-round growth over the past two years in the state, particularly from the software sector, coupled with the increased activities from other sectors, a shortfall of around four million sq ft commercial space is seen in Chennai alone during 2006, said the sources.

According to the available statistics, the demand for commercial space during the year is estimated to be between 6.5 million sq ft and seven million sq ft. However, the supply is expected to be less than 50% - around three million sq ft only during the year, the sources maintained.

In the last three months alone over one million sq ft commercial space has been absorbed by leading IT companies such as Satyam, Cognizant, Scope International, AIG, US Tech, and few others from other areas, said sources.

Despite the demand for commercial space, real estate majors such as DLF, GMR, Vishwarti Builders, Mars Construction, L&T are not expected to go aggressively due to environment problems as well as RBIs stricture to banks on lending to the sector. With majority of the realtors focusing on IT and ITES companies for premium and immediate transactions, the demand for office space has gone up and is estimated to be around 3,00,000 sq ft during the year.