Booming Real Estate and Office Leasing Trends in Chennai
By Team DLanes
Residential Market Thrives, Office Leasing Surges
Chennai’s real estate sector is experiencing a significant boom, with approximately 10,300 homes sold in the city during the latter half of 2023, marking a remarkable 41 percent increase compared to the previous year. The surge in demand is attributed to various factors, including rapid infrastructural developments like Metro rail extensions and improved road networks, making Chennai increasingly attractive to homebuyers. Additionally, there’s a noticeable shift towards premium housing preferences, with mid-segment projects dominating the housing supply.
Simultaneously, the commercial sector in Chennai is witnessing robust growth, particularly in areas such as warehousing and data centers, drawing people from across India and boosting the demand for quality homes. Suburban areas like Vandalur-Kelambakkam Road, Porur, and Kattupakkam have emerged as hotspots for mid-segment launches, positively impacting housing sales. The influx of expatriates, especially from countries like the US, UK, and Australia, further contributes to the rise in housing sales, particularly in suburban and peripheral areas.
Moreover, there’s a notable uptick in high-end and luxury segments, accounting for 28 percent of quarterly unit launches, with preferred locations including Perambur, Saligramam, Korattur, and Navalur. The real estate market is also witnessing a shift towards sustainability, with developers focusing on eco-friendly, green-certified developments, appealing to environmentally conscious buyers.
Looking ahead, both mid-segment and high-end projects are expected to drive sector growth, with the mid-segment leading in project launches and sales share. Additionally, the trend of purchasing second homes is anticipated to further stimulate the residential sector’s growth in the coming months.
On the commercial front, Chennai has emerged as a leader in leasing office spaces to offshore multinational companies, surpassing Bengaluru and Hyderabad in 2003. The city’s leasing activity, particularly in the global capability centre (GCC) segment, has been robust, accounting for 84 percent of the total leasing activity. Factors such as lower commercial rentals, availability of Grade A office spaces, and supportive city infrastructure have contributed to Chennai’s appeal for leasing activities.
While Bengaluru and Hyderabad continue to maintain strong rental markets, Chennai’s manufacturing sector, especially in electronics and automobiles, provides it with a competitive advantage. Despite challenges faced by other cities, Chennai witnessed a 92 percent growth in office leasing during the same period, driven by the global IT slowdown and layoffs in Bengaluru.
Experts predict that Chennai’s GCC sector will continue to attract new non-IT sectors like global banking corporations and R&D companies, maintaining its lead in offshore leasing. The increasing demand for office spaces in India by offshore MNCs reflects a strategic shift towards cost-effective solutions, with offshoring functions becoming pivotal for global companies across various industries.
In conclusion, the convergence of booming residential and office leasing trends underscores Chennai’s emergence as a dynamic real estate market with promising opportunities for both homebuyers and commercial tenants alike.
Also read: Chennai’s New Home Supply Surges by 74% in 2023
