Cushman & Wakefield MarketBeat reports analyze quarterly economic and commercial real estate activity including supply, demand and pricing trends at the market and submarket levels.
Learn more by clicking our most recent Chennai MarketBeat reports on the various sectors below.
Chennai recorded a gross leasing volume of 1.74 MSF, a 5% and 10% rise on q-o-q and y-o-y basis respectively. Quarterly activity was driven by prime submarkets of south-west (34%) and suburban south (33%). GCCs remained dominant with 32% share followed by IT-BPM sector, comprising 28% share. Net absorption stood at 0.52 MSF. The city witnessed no supply addition this quarter, however, it is expected to receive a healthy supply of 5.28 MSF over the next two quarters. The city-level rentals saw a marginal q-o-q rise of 0.7%.
Chennai's total retail leasing activity for Q2 2024 stood at 0.1 MSF, primarily driven by main street leasing. Accessories and Lifestyle segment dominated main streets with a 37% share followed by automobile and CDIT sectors capturing 20% and 17% share respectively. Domestic brands comprised 77% of the leasing volume. Chennai's mall vacancy rate surged to 14.7% given supply addition. While overall mall rental rates remained stable compared to Q1 24, certain malls witnessed up to 4% increase y-o-y. Prime retail locations experienced a rental increase of up to 6% y-o-y.
Chennai residential market saw 5,088 unit launches. The Suburban South I submarket dominated with a 48% share, followed by Suburban South II with a 36% share. The mid-segment captured 69% market share, a significant increase from 64% in Q1 2024. High-end and luxury segments comprised 22% of the quarter's unit launches. The luxury segment witnessed a jump from 2% in H1 2023 to 8% in H1 2024. The affordable segment contributed 9%. Average rental values grew 6% y-o-y. Within the mid-segment, a 2-6% y-o-y capital value appreciation was witnessed.
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.
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.
The evolution of the flex segment in India’s office market has been a story of rapid transformation. The flex space operator footprint surged by 23% in 2022 and 18% in 2023, marking the sharpest rise seen in history! With H1-24 already adding about 5 MSF to the total inventory, 2024 continues to maintain this momentum.
India's office leasing market witnessed a robust momentum in Q2 2024, achieving a hat trick with over 20 msf since Q4 2023.
Our ‘REWORKING’ series examines decision-making for occupiers under four key considerations: Cost, Carbon, Culture and Community – under which the changing demands, needs and impacts on office spaces and strategies can be examined.
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