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Wednesday, February 21, 2001

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Raheja's commercial project in Chennai ready for occupation

N. Ramakrishnan

CHENNAI, Feb. 20.

RAHEJA Towers, the first commercial project of the K. Raheja group in Chennai, has been completed and is ready for occupation. More than 50 per cent of the space has been either sold or leased out and the company hopes to sell or lease out the remaining space in the next few months.

With a total built up area of around 3.99 lakh sq.ft., the 11-floor building has been constructed on the arterial Anna Salai.

The project is a joint venture between the Union Co. Motors Ltd and the K. Raheja group. The 60-ground land on which the building has come up belongs to Union Motors. Therefore, of the total built up area, the Raheja group will have 52.5 per cent of the space and the Union Motors the remaining 47.5 per cent to either sell or lease.

The building was originally designed with multi-functional companies in mind, but the changing market conditions with the information technology sector driving the demand for commercial property made the promoters re-work their plans, according to source s in the Raheja group.

The building now has an optical fibre exchange provided by BSNL which will cater to about 2,500 optical fibre lines. The VSNL has also agreed to provide an IPLC (international private leased circuit) through a router, depending on the bandwidth requireme nt, according to them.

IT companies, according to the sources, require large floor plates for them to custom bond the space. Raheja Towers offers 38,000 sq.ft. on a single floor.

One Chennai-based IT company, Mascon Global, has leased about 38,000 sq.ft. of space in the building at a lease rent of Rs 42 per sq.ft. per month, according to the sources.

The average lease rent in the building is Rs 45 per sq.ft. per month with 20 months deposit, while the price for outright sale is Rs 3,750 per sq.ft. for space in the third to eighth floors. CB Richard Ellis, the property management consultants, will be in charge of maintenance.

A number of international airlines and some private insurance companies are in discussions for taking up space in the Raheja Towers.

According to real estate industry sources, the commercial property market in Chennai is `active and stable'. The demand is for good quality construction where the building maintenance is preferably in the hands of reputed firms.

The industry sources expect a shortfall in supply up to December 2001. This is mainly because there are not too many commercial projects which offer large floor plates. The Tidel Park offered 89,000 sq.ft. space in one floor and that was taken up in no t ime. The next biggest floor plate is at the Raheja Towers. Other projects offer only up to 10,000 sq.ft. in one floor, according to the sources.

The sources said that large commercial projects that had been announced were expected to be ready only by February or March 2002 when the supply position would improve. However, the sources said, project promoters would not be in a position to demand a h igher price due to the shortfall in supply due to the threat that the IT companies would go in for custom-built premises.

They said that a number of IT companies were putting up their own buildings and once these were ready, the companies were expected to move into their own premises. This was expected to happen some time next year after which the space occupied by these co mpanies now would become vacant.

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