Sea change in Chennai metro hospitality corridors

CHENNAI: The hospitality map of Chennai is witnessing a paradigm shift with action shifting from the arterial Mount Road and the airport to upcoming corridors like MRC Nagar and Guindy.

Apart from top brands like Leela, Taj, ITC and Hilton — all of which are located in either of the two locations — new players, entering the hospitality sector, too are opting for these hotspots. Ceebros and Empee Group are giving finishing touches to their projects, that are to be commissioned soon.

Unlike Bangalore and Hyderabad, where activity on the hospitality front has more or less been confined to Whitefield and Gachibowli (both in the outskirts) respectively, in Chennai, all the projects have come up in the heart of the city.

It is rather unusual for a new hotspot to emerge within the Central Business District (CBD) in a 350-year-old city like Chennai but the vagaries of development would have it so.

The decision to offload huge parcels of land in single transaction contributed to the changing facade of MRC Nagar and Guindy. It was after the MAM Ramaswamy-Chettinad Group decided to launch a flagship real estate project and liquidate some of its existing holdings in the backwater area that gave fillip to the then underdeveloped MRC Nagar, said a leading developer.

While MRC Nagar offers proximity to the CBD, Guindy is located close to the airport and the IT and industrial growth corridors of GST Road, Mt Poonamalle Road and Old Mahabalipuram Road, according to Jones Lang LaSalle-Meghraj MD Ramesh Nair.

Upcoming hotels staying away from Mt Road has positioned these two locations as distinctive hotel destinations, distinguishing them from other hotel sites, he told ET.

While MRC Nagar will see five-star room inventory surge by around 800 units, Guindy would see 1,200-plus rooms being added during the year. Some of the prestigious projects lined up on these two corridors include JW Marriott (328 keys), Leela Kempinski (380) and Ascott (188) at MRC Nagar besides ITC Grand Chola (650 + 100 serviced apartments) Empee-Hilton (260), Grand Hyatt (201), SRM Hotel (120), Raj Park (100 plus) at Guindy.

For long Guindy area is having Le Royal Meridien as the only 5-star delux hotel. In that area ITC is building its
"the grandest, largest and the most capital-intensive projects" — the 750-key five-star hotel project.

‘RainTree on Mount Road,’ the second hospitality venture of Ceebros, is situated on the stretch of road that leads to the Guindy hospitality corridor. The 230-key business hotel has a commercial property alongside. This greenfield hotel is slated to be open by April this year.

Ceebros MD Subba Reddy, who bought the property five years ago, told ET the main reason for the emerging hospitality corridors is their connectivity to the CBD.

Despite slowdown in the construction activity the whole of last year, Ceebros, ITC and Empee were able to sustain the momentum, due to the fact that they had acquired land at "historic" prices, less than Rs 50 lakh a ground (1 ground = 2,400 sq ft). Meanwhile, brands like JW Marriott, Leela, SRM, Grand Hyatt and Ascott had to cough up a premium for the properties since the acquisition happened at peak market prices post-2007, when prices were hovering around Rs 3 crore per ground.

Proximity of prominent convention centres like Mayor Ramanathan hall and Image auditorium in MRC Nagar and the Chennai Trade Centre in Guindy were an added advantage, especially for the business hotels, observed South Indian Hotels and Restaurants Association advisor R Rangachari.

MRC Nagar being one of the few places where multi-storied buildings could be erected close to the coastline helped hoteliers to tap leisure travellers too, another developer told ET.