CHENNAI: They put their faith in the IT boom and planned large, luxury apartment projects on Chennai’s IT corridor. Today, though, builders are feeling the pinch as the residential sector on the IT corridor is undergoing one of its worst crises ever.
Of the 40,000-odd residential apartments that are expected to come up in the outlying areas of the city over the next three years, 50% have been planned along the IT highway. The industry’s biggies – DLF, Hiranandani, Puravankara , True Value Homes, Arihant, Vijay Shanthi, Akshaya , SSPDL, L&T , Doshi, ETA Star and Mantri – all have their presence on this sixlane road that is also home to IT giants such as TCS, Cognizant , Satyam and Infosys.
But more than a year into their projects, many have sold hardly 30% of their stocks. The Chennai builders have been keeping up a brave face and have not reduced prices, even when their counterparts in Bangalore started selling flats at discounted rates.
Builders here have not increased prices (average price Rs 4,000 per sq ft) since their projects were launched. “We bet our stocks on these projects as the city is already facing a shortage of 30,000 dwelling units. To add to the demand, eight million sq ft of IT space has been added in the Siruseri IT Park and another eight million sq ft IT space is being readied in the park over the next three years. Going by a conservative estimate of 100 sq ft per employee, it would have generated 1.6 lakh new jobs, and for us, selling 20,000 flats to IT professionals should have been a cakewalk,” said Prakash Challa, president of the Tamil Nadu unit of Confederation of Real Estate Developers ‘ Association of India.
But their calculations have gone wrong. IT professionals are in no hurry to buy flats now. “The reasons for the slump are many – prohibitive land prices, construction of big apartments costing Rs 60 lakh and more when the demand is high for smaller ones in the sub-Rs 30 lakh segment and the steep increase in housing loan rates,” said, a real estate analyst.
“Against a monthly booking of 30 to 40 units last year, we’re down to three to four, and many try to negotiate the price. People are adopting a wait-and-watch approach.
To add to the builders’ woes, the IT sector is going through a bad phase. Many companies that recruited students on campus this year have not yet taken the new employees on board. Some companies have even suspended civil works.
A leading IT company, which was developing a 50-acre plot of land in Sholinganallur and was expected to add 10,000 employees soon, has stopped construction halfway through, reliable sources said.
Even techies holding steady jobs have been affected by the slowdown. “Our increments this year were very low. Most professionals have put investing on hold,” said R Maneesh, a senior executive in an IT firm. He had been scouting for a flat on Old Mahabalipuram Road but finally bought one in Kochi last year. – Times of India
Credit woes: IT cos may cut 25000 jobs
BANGALORE/NEW DELHI: The banking, financial services and insurance (BFSI) segment is the largest outsourcing vertical for Indian technology players. The space contributes up to 40 per cent of the revenues for some top IT firms.
The industry employs around 3,50,000 people in the BFSI space of which the top six players alone account for 180,000 jobs. The domain accounted for $10 billion of the total $32 billion revenues the industry posted during the last fiscal.
What’s happening in the global financial markets can result in the loss of as many as 20,000 to 25,000 jobs in India. That means, the likes of Cognizant, TCS, Infosys, HCL, Wipro and Satyam will announce huge lay-offs over the next couple of quarters.
Earlier the company had declared its plan for the expansion and hired people till as late as almost July 2008. Lehman Brothers said in a statement that its New York office intends to file for bankruptcy protection as it owes over $600 billion to its lenders. However, it highlighted that no other Lehman brothers’ US subsidiaries or affiliates, including its broker-dealer and investment management subsidiaries, are included in the filing.
Wipro eyes Lehman’s India BPO
NEW DELHI: Indian outsourcing firms Wipro Technologies and Copal Partners have expressed interest to bid for the Indian back-office unit of collapsed Lehman Brothers, a daily paper said in an unsourced report.
The US investment bank, which filed for bankruptcy protection on Monday, has asked its 1,200 employees in a Mumbai unit, which does equity research and analytics support for its mergers and acquisitions business, to leave by the end of September, the newspaper reported.
Recession hits US clout
To state that the United States economy is suffering from a steep downturn is an understatement. There is a consensus among most analysts that America is in a recession amid high inflation and rising unemployment.
Even China and South Korea are witnessing a decline in economic activity as a result of the economic malaise in America.
Europe’s financial institutions seem to suffer the most because of the large amounts of US subprime and real estate holdings in their portfolios. The strength of the euro vis-a-vis the dollar is also a strong negative for the euro-zone economies.
While the situation in America is causing havoc throughout the world’s financial markets, Russia seems to be faring better than ever.
As one of the top oil and natural gas producers in the world, and the major supplier of energy resources to Europe, the soaring price of its energy exports has empowered Russia and allowed it to regain its lost clout on the world stage.
Rising dollar: Mobiles go expensive
NEW DELHI: If you are planning to buy a new mobile phone, brace up to pay more. A 15 per cent rise in the dollar against the rupee has hit cellphone makers badly.
All major cellphone makers are evaluating a 7-10 per cent price increase if the dollar appreciates further. About 100-million cellphones are likely to be sold this year compared to about 70 million last year.
The rupee hit a two-year low at Rs 46.60 against the dollar on Tuesday, forcing cellphone makers into meetings. “We are evaluating the situation. The appreciation in the dollar against the rupee has made all the components costly. The industry will have to take a decision on price revision upwards it if it goes towards Rs 50 against the dollar,” says Samsung Mobile country head Sunil Dutt.