Chennai Has Witnessed a Marginal Increase in Commercial Market
There has been a marginal increase within the demand for commercial property in Chennai. Whereas the residential area district witnessed a decrease in demand for workplace area with absorption recorded at around 0.28 million sq. feet compared to close 0.35 million sq. feet throughout the previous quarter, the peripheral commercial district witnessed healthy demand levels with absorption levels recorded at 0.30 million sq. feet throughout the quarter compared to eighty thousand sq. feet registered throughout the previous quarter.
While Chennai has witnessed a marginal increase in demand for prime commercial area, provide constraints would possibly lead to rental values continued to acknowledge with reference to mid term. Information Technology and back office operations are expected to stay major contributors to overall office space area absorption within the town.
Transaction activity within the central business district remained low throughout the quarter and there was no addition within the existing provide. The non central business district small market witnessed a rise in transaction activity throughout the quarter with absorption of around 0.26 million sq. feet, compared to 0.16 million sq. feet throughout the previous quarter. On the provision front, around 0.21 million sq. feet of Grade A workplace area was released in the region.
Commercial market of Chennai has notched up absorption of 0.5 million square foot throughout the primary quarter and also the town could witness a surge in SEZ provide throughout the approaching months.
The year began on a sluggish mode because of cascading impact of world meltdown aggravated by the robust supply route across town. In fact, surveys by international property consultants reveal that the city’s internet absorption throughout first quarter was the lowest in almost 2 years.
In a connected development, manufacturing sector accounted for around fifty one percent of the whole transactions, whereas the share of the IT/ITES dipped to around thirty six percent throughout the primary quarter from around sixty percent throughout the previous quarter. Except the investment grade areas, around sixty thousand square foot of grade B area got chartered out throughout the quarter, of that more than fifty percent was leased out into the CBD locations.
No new provider was witnessed throughout the quarter amid delays in the project completion of Platinum Holdings in Navalur and Isana in Arumbakkam.
The transactions witnessed throughout the primary quarter were targeted for the most part on areas like Mount Poonamallee road besides GST road, Ambattur, Velachery, Perungalathur, Perungudi, Sholinganallur and Siruseri.
According to CB Richard Ellis’ quarterly survey, the CBD witnessed a dip in demand for commercial area with negligible absorption of around 0.09 million square foot. The Off / Non CBD micro-market of Taramani, Guindy and MRC Nagar witnessed stagnation in market activity in comparison to the previous quarter. The Suburban Business District (SBD) including areas like Perungudi, Velachery, Mount Poonamallee Road witnessed most activity throughout this quarter with an absorption of just about 0.32 million square foot being reportable as compared to around 0.25 million square foot in the previous quarter.
Overall the market sentiment continues to stay positive that is predicted to translate into healthy absorption over the approaching few quarters as per the industry sources. The SEZ segment ought to still witness provide additional, thereby being a serious contributor to the market of commercial property in Chennai. IT and back-office operations are expected to remain major contributors of commercial area demand and transaction activity. Rental values are expected to stay stable across most micro-markets over the approaching few quarters.
Subhash Kumar - About Author:
PropTiger is an independent real estate advisor with a pan-India presence. We aspire to be your first port of call If you want to buy a property in Chennai.
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