Following the commercial success of Demonte Colony 2, a sequel to Ajay Gnanamuthu's Demonte Colony, the filmmaker has confirmed that the third part of the franchise is underway.

Ajay has posted a picture of himself along with the technical crew in the European nation of Malta. This could be the film's pre-production. The third part's returning cast features lead actors Arulnithi and Priya Bhavani Shankar with Muthukumar and Meenakshi Govindarajan in supporting roles. Sam CS returns as the music composer for the third installment.

Released last August, the film opened to mixed reviews from the critics and audiences alike. However, the film really did well at the box office with a collection of over Rs 80 crores worldwide. An excerpt from the CE review of the film reads, "Speaking of intensity, Demonte Colony 2 does everything it can, from jumpscares to hyperventilating victims, to dark haunted rooms, and unbearably loud music, to make sure we feel a sense of dread. However, very little of the horror scenes work. This could either be because the poor VFX takes you out of the experience, we don’t connect with the characters, or the horror scenes themselves do not feel inventive enough."