Chennai emerges as third-largest office market in 2023
The average size of completed developments tripled to 490,000 sft. in 2023, compared to 146,000 sft. in 2018
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Hyderabad: Chennai has witnessed the rise of modern campus-style office developments in recent years, driven by the demand from global and Indian firms. The city saw increased new developments in 2023, offering various space options to occupiers and boosting absorption rates.
The market has occupied a strong confidence in the market and an integrated public transportation system has resulted in well-distributed office activity across the city. OMR Zone 1 remains the most active micro-market, followed by OMR Zone 2.
The average size of completed developments tripled to 490,000 sq. ft. in 2023, compared to 146,000 sq. ft. in 2018. Additionally, the average deal size saw a substantial increase from 21,000 sq. ft. in 2018 to 35,000 sq. ft. in 2023.
In 2023, the top five developers DLF, Tata Realty and Infrastructure (TRIL), Xander Group, CapitaLand, and ETL Infra accounted for 30% of the completed office stock. Developers such as DLF, Brigade Group, CapitaLand, ETL Infra, Olympia Group, Mindspace REIT, and RMZ Corp have unveiled large-sized office developments exceeding one million sq. ft. in key micro-markets including OMR Zone 1, OMR Zone 2, MPH Road, and Off CBD.
Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, remarked,“Chennai's real estate market has experienced exponential growth over the past decade. The government's sector-specific policies, aimed at attracting investment and job creation, have significantly enhanced Chennai's real estate landscape. Tailored initiatives for industries such as engineering & manufacturing, fintech, IT, aerospace, and electronics have led to a substantial increase in office space absorption in 2023, positioning Chennai as a key contributor to India's overall office market.”
Ram Chandnani, Managing Director, Advisory & Transaction Services, CBRE India, commented, “Chennai's appeal as an investment destination, particularly for global and domestic manufacturing firms, is expected to drive innovation and technological advancements. With companies increasingly adopting technologies such as Artificial Intelligence, SaaS, Big Data, and IoT, Chennai is at the forefront of evolving trends. The growth of BFSI and E&M GCCs in Chennai is likely to further reshape the city’s office real estate momentum.”
