Chennai emerging as IT hub

TCS, HCL, Alcatel among firms in Guindy, Ambattur industrial estates

Chennai's emergence as a software and BPO hub is evident in the changing landscape of the Guindy and Ambattur industrial estates.

Two years ago, the areas were host to sick enterprises. Now, they are basking in the gleam of information technology and IT-enabled services companies. Guindy, set up in 1956, is located in south west Chennai and Ambattur, which came up in 1964, in the north-west.

The objective behind establishing the Guindy and Ambattur Industrial Estates was to promote small and medium enterprises engaged in engineering, casting, forging, sheet fabrication and related activities.

Earlier, the Ambattur's landscape was dotted with the likes of TI Cycles, part of the Murugappa group, TVS group companies and Britannia Industries. There is also a strong presence of small and medium auto ancillaries that supply to Ashok Leyland, Maruti Udyog and the TVS group.

The scenario has changed. Ambattur now has IT bigwigs like TCS and HCL and business process outsourcing companies.

Ambattur is a stone's throw from Chennai-Tiruvallar highway and is accessible through rail network too, with the Chennai Central-Arakkonam railway line passing through it.

Ramesh Nair, associate director-corporate solutions, with real estate consultancy Jones Lang LaSalle says Chennai has grown so fast that it has embraced Guindy and Ambattur. Both offer advantages such as easy accessibility, reasonable land costs and proximity to middle income residential areas.

HCL Technologies, TVS Electronics and Alcatel are among the units present in Guindy. Eveready, Khivraj and two more groups from Kolkata are promoting a Rs 220-crore area called Olympia IT park. The built-up space, when completed, will cover 1 million sq ft. The IT Park will be housed in an 8.4 acre property owned by Eveready Industries.

The first phase of 6 lakh square feet is to be ready by December 2006. RR Industries expects to invest Rs 200 crore in two projects of 10 lakh sq ft in Chennai in one year.

A S Hariprasad, managing director of GKS Constructions Aids and member of the Ambattur Industrial Estate Manufacturers Association, says, the large companies in Ambattur that became sick tried to rake in cash by selling their properties to software companies.

He points out that the image of Ambattur Industrial Estate has undergone a dramatic change with the influx of IT and ITES companies.

With over 1,500 software engineers working in the industrial estate, upmarket restaurants have sprung up, as have sports facilities. Ambattur is easily accessible from Anna Nagar, Mogappair and Korattur, which have dense residential clusters.

There is a plan to upgrade infrastructure here at an envisaged investment of Rs 47.2 crore. This includes good roads, logistics, better street lighting and sewage systems.

The Centre is providing a grant of Rs 35 crore, while the state government will pool in about Rs 1.3 crore. The rest will come from the existing units. The project is slated to commence in January 2006 and will be completed by late 2006 or early 2007. Many more IT companies are then expected to move in. Guindy, with its proximity to the airport and IT corridor has witnessed a four-fold rise in real estate prices in recent times, much more than that Ambattur.

One real estate consultant says the price of well a located property has increased by almost 50 per cent over the last couple of years, up from about Rs 40-50 lakh a ground (2,400 square feet) two years ago to Rs 60-70 lakh.