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Footprint of Chennai’s Future Business Districts and Resurgence of Integrated Townships

Shweta k • 20/01/2022

Rajiv Gandhi Salai evolved as one of the most sought-after destinations in Chennai to work and live with the amalgamation of lucrative investments; experiences of Walk-to-Work culture combined with the imminent infrastructure that connects south with the rest of Chennai.

With the shift in workplace preferences, Chennai witnessed a pivotal shift in business districts traversing south to the – IT Corridor. Rajiv Gandhi Salai is dotted as the self-sustaining growth corridor which offers copious options for integrated townships with city-like high-end infrastructure and amenities - assuring high rental yield and capital appreciation over the years.

The impending infrastructure fuelling connectivity with the shift in business districts and preferences towards communal living are expected to drive burgeoning residential demand over the next few years.

In this report, we delve into how the unprecedented times of the pandemic brought about a newfound interest in integrated townships. The rationale behind the shift in business districts and how Rajiv Gandhi Salai conceived as the IT metropolis with its testament to high-end integrated townships, now caters to a diverse community.

Read the Report.

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CURRENT MARKETBEAT

Office Buildings CBD
Chennai Office Report

Chennai office market recorded a gross leasing volume of 2.1 MSF, a 20% q-o-q growth, driven by the Suburban South (41%) and the South-west (21%). Net absorption stood at 0.3 MSF. Global Capability Centers (GCCs) comprised 42% of Q4 demand, a 39% q-o-q increase, while engineering & manufacturing and BFSI, contributed 31% and 22%, respectively. Grade A supply of ~0.93 MSF was witnessed with 60% concentrated in the North-west submarket. City-wide vacancy rates increased to 16.8% while rentals grew 8% y-o-y.

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Shopping Retail
Chennai Retail Report

Chennai’s main streets recorded leasing of 0.2 MSF in Q4-24, a 37% q-o-q growth, and a 2X increase y-o-y. Fashion segment led with 29% share, followed by F&B (18%). Mall leasing stood at 0.02 MSF, a 13% q-o-q growth. Peripheral South and CBD submarkets collectively accounted for 77% of the quarterly mall leasing. City-wide mall vacancy stood at 14.27%. Main streets such as Cathedral Road, Usman Road-North and Anna Nagar 2nd Avenue recorded a rental growth of 2-4% q-o-q.

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Warehouse Internal Rack
Chennai Residential Report

Chennai residential market saw ~4,050 unit launches, a 38% y-o-y growth in Q4-24. Suburban South I and II collectively led with a 62% share. The mid-segment dominated with 77% share, followed by the high-end and luxury segments, capturing 18% share, witnessing 35% growth compared to 2023. Capital values for Off-Central II, Suburban South I & II and Suburban North rose 5-9% y-o-y and 4-5% y-o-y for the high-end segment of Off-Central I & II. Rental values for mid-segment units in Off-Central II and Suburban South I & II rose 5-8% y-o-y.

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Warehouse Internal Rack
Chennai Industrial Report

Chennai saw warehouse leasing volumes of 2.14 MSF. Oragadam submarket dominated with 57% share, followed by Madhavaram (16%) and Irungattukottai (14%). Logistics/3PL sectors led with 41% share, followed by automobile sector (23% share). Industrial leasing stood at 1.04 MSF. Oragadam, Irungattukottai and Sriperumbudur comprised 81% of leasing volume. Oragadam, Madhavaram and Periyapalayam saw 4-5% y-o-y rental growth. Poonamallee submarket saw 8% rental growth over H1 2023. 

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Warehouse Internal Rack
India Capital Market Report

Q2 2024 witnessed massive investment inflows amounting to INR 231.5 Bn (USD 2.77 Bn), marking a 1.5x q-o-q growth. The Logistics & Industrial (L&I) segment led with 56% share.

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