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Auction for a 9 acre plot on Chamier’s Road in Chennai’s central business district is likely to take real estate valuation in the southern markets to a new high.

As the deadline ended last week, big names including DLF, Unitech, Nitesh Estates along with Citigroup, HDFC Realty and Hiranandanis were in the fray putting in bids valued at over Rs 500-550 crore. The Chennai Archdiocese, which manages the property through a trust, is offering the land on a 66-year lease. The bids are likely to be opened this week. The land is for a 66-year lease and there is no specific renewal clause attached to the offer.

The land — with a little over 8 acres available for development — is located adjacent to Boat Club, the most sought after and premium location in the city. It is also the largest land parcel to be made available for commercial exploitation in the area. According to sectoral experts, the property has a huge catchment area for attracting business. The successful bidder can develop up to 1 million sqft of built-up space. Since the land is being offered on lease, it is likely to attract interest for commercial development like a hotel, high-end mall or serviced apartments.

It is believed that the bidding fray also includes tier-II players like Nidhi Estates, Arihant Foundation and Puravankara. The Chennai-based Arihant has joined Unitech in placing a bid. A prominent Singapore realty fund and a prominent hospitality major had also evinced interest in the project, but it could not be confirmed if they have put in bids. While the property is close to Park Sheraton & Towers, there is another hotel, Raintree, on a parallel stretch on St Mary’s Road, which is witnessing the development of a 2 lakh sqft IT Park by Lancor.

Promoting an IT Park on this Church property may not be ideal, given the presence of high-end residential units nearby, but it can also have a fair share of grade A commercial space. The last three prominent transaction in the Boat Club area included IDBI’s 43 grounds that fetched a whopping Rs 175 crore at Rs 17,000 per sq ft in February 2007. A few months earlier, TVS Family’s 23 grounds had fetched Rs 84.85 crore at Rs 15,371 per sqft and Rs 3.69 crore per ground. And in late 2005, a 11.66 ground property, which belonged to HSBC, was sold for Rs 14,833 per sqft.

News Source: Economic Times, 14 Aug'07