CHENNAI: The hustle and bustle at Koyambedu market, one of Asia’s biggest hubs for perishable goods, could soon be a thing of the past as the state government wants to turn the 85-acre wholesale market into a commercial centre for setting up swanky office spaces, retail mall, multi-purpose sports facility, and a five-star hotel.
Cushman and Wakefield, a global real estate consulting firm appointed by the Chennai Metropolitan Development Authority (CMDA) to prepare a pre-feasibility report on ‘redevelopment of Koyambedu wholesale market complex and identification of best use option’, has suggested shifting of the market partly or completely to Thirumazhisai on the outskirts of Chennai.
As most of the shops in the market are owned by the traders, the government is mulling over a compensation package to make them shift to the Thirumazhisai market. Sources said the government wants the consultant to come up with a plan to protect the traders’ rights and incentivise them to voluntarily move to the new location in Thirumazhisai.
As per the plan, 35% of land area or 29.75 acres will be earmarked for setting up open areas, parks, gardens and playgrounds, and roads. Commercial complexes will come up on 30 to 50 acres, and the rest of the land will be retained for future development. If the market is shifted only partially, some part of the land will be used for accommodating the remaining traders.
Koyambedu market makes Rs 12 crore/year on average
The report said the proposal could transform Koyambedu, which has become too crowded due to heavy vehicular and pedestrian movement, into a retail and hospitality destination. “It will become a prominent commercial (office), retail, and hospitality destination that will attract visitors from all over the state,” the report said. Sources said the government is looking at vertical development of Koyambedu, which is emerging as a transit hub linking Phase I and Phase II of the Chennai Metro Rail service.
Official sources said the market, being maintained by the CMDA, gets just 2% gross margin for maintaining the facility. The market generates an average annual revenue of `12 crore. With an annual expenditure of Rs 11.70 crore, the profit is just Rs 30 lakh per annum.
“This highlights the need for more effective utilisation of the land, better market operation, and the need to create avenues for higher revenue generation through efficient product mix and modernisation of market activities.” the report said.
Entry fee, parking fee, and upkeep of common areas are the major sources of revenue for the CMDA.
The report says there has been no new development in the north-west regions of the city, including Koyambedu. Most of the office spaces in the region are over two decades old. Only 5% of office stock is present in the north-western parts compared to 35% in southern parts. While the average monthly rent in the northwest is only Rs 35-50 per square feet, it is Rs 80-100 per sqft in other micro-markets of the city.
Traders to be paid to make them move out
CMDA plans to convert the 85-acre wholesale market complex into a commercial hub for setting up office spaces, retail mall, multi-purpose sports facility, and a five-star hotel