Chennai is on the radar of foreign real estate funds

Chennai is on the radar of foreign real estate funds and large developers after the southern city recently witnessed two big-ticket property deals. AIG Real Estate Fund along with the Bangalore-based real estate firm RMZ Corporation has purchased an 11-acre plot at Guindy belonging to Hindustan Teleprinters (HTL), a subsidary of telecom equipment maker HFCL, for Rs 298.10 crore. In another deal, Shyam Kothari, brother-in-law of Mukesh Ambani, has bought IDBI’s 2.5 acres Boat Club property in Chennai for Rs 175 crore. These deals have taken the commercial property price in Chennai to a new high. International property consultants Jones Lang Lasalle was the advisor to both the deals. The HTL-AIG deal has pushed land price in Chennai to a record Rs 27.1 crore per acre from the earlier Rs 15-18 crore per acre. The price of premium properties in Chennai has increased significantly over the last 12 months, driven by high demand, and limited supply. Guindy, traditionally an industrial centre, has in recent years emerged as a centre for IT companies and has seen development of commercial space. Software companies and technology parks have come up within the Guindy Industrial Estate adjacent to the property. A major IT project, the Olympia Tech Park, with about a million sq ft of commercial space is coming up nearby. HTL, a subsidiary of Himachal Futuristic Communications (HFCL), is under the purview of BIFR. Himachal Futuristic took a 74% stake in the firm in 2001, when the government divested its holding. HTL has another 50 acres on the arterial Mount Road, which is now expected to be auctioned shortly.