Chennai
During the years 2006-08, Chennai’s commercial property developers went overboard to build IT parks making use of the state government’s liberal sops by way of increased FSI at 3.75 for IT buildings.
A single window clearance was introduced besides automatic conversion of land and the nodal agency ELCOT cleared the proposals at breakneck speed to thwart the competition posed by neighbouring states. But little did they realise the implications of a global meltdown nor the cascading impact of downturn on the overall IT sector in Indian cities.
Today Chennai alone has over 5 million sq ft of commercial space in IT buildings in the non-SEZ sector waiting for the tenants. This has caused irreparable damage to the developers over the years in terms of maintenance and inventory carrying cost. CREDAI, Tamil Nadu, an umbrella organisation of leading developers who have agreed to follow a common code of ethics, had represented to the government time and again to permit them to lease IT space for non-IT sectors.
Even a specific request was made to let at least the normal FSI space so that soaring maintenance cost could be offset but the request got bogged down in the bureaucracy for several years. In the meantime the inordinate delay in clearing the proposal has already caused untold agony to commercial developers.
There is light at the end of the tunnel now for commercial property developers in the city.
The CMDA has finally submitted its report to the government on the commercial property developers’ long pending demand to enable them to lease IT space for non-IT sectors. The CREDAI has earlier requested the government to allow the developers to lease commercial space built for IT sector using the enhanced FSI provision for non-IT sectors like banking, insurance and financial services in view of the slowdown in IT sector and millions of sqft lying vacant across the city.
Though the impact may not be felt immediately, it will definitely give a breather to the commercial property developers to weigh multiple options taking into account the changing market scenario, say property consultants. Wherever there is partial development, it will enable them to change the building plan midway paving the way for a more realistic assessment of the situation and according plan their development.
V Nagarajan, Property Consultant
Source: http://content.magicbricks.com/chennai-vacant-it-space-awaits-tenants
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