Chennai’s commercial real estate market has seen a 75-fold growth over the past 25 years, reaching 76.5 million square feet by the first half of 2024 from 0.5 – 1 million square feet in 1999, according to a report released by property consultancy JLL.
Meanwhile the residential segment has grown about 27 times to 2,75,000 housing units from 10,100 during the same period, the report added. Property values today range between ₹5,000 to ₹25,000 per square feet, up from ₹850-2,500 per square feet in 1999.
The report titled “A transformational journey: 25 years of Chennai” highlighted that the office segment growth has been largely driven by the IT/ITES sector and the rise of global capability centers (GCCs).
Chennai today commands 12% of India’s overall GCC market share, with a particularly strong foothold in the banking, financial services, and insurance (BFSI) sector, where it claims 15% of the national footprint, per the report. It noted that 60% of the technology operations of Fortune-listed BFSI companies have chosen Tamil Nadu as their base.
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“With continued infrastructure development and strategic policies in place, Chennai is well-positioned to capitalise on emerging trends in technology, sustainability, and urban living. The city’s resilience and adaptability bode well for its future as a key player in India’s economic landscape,” said Siva Krishnan, Senior Managing Director (Chennai and Coimbatore), Head – Residential Services, India, JLL.
According to the report, starting 2021, an increase in the percentage of end users in the plots segment has led to a surge in plotted development projects in the suburbs of the city. Implementation of Real Estate Regulatory Authority (RERA) has streamlined the market by improving various parameters such as transparency, accountability, and project delivery timelines.
The report highlighted that there is a visible upsurge in residential projects along metro rail corridors. In 2024, major infrastructure projects such as Kilambakkam Bus Terminus and Parandur have also been added.
Logistics and industrial segment on stable trajectory
As per the report, in the logistics and industrial sector, the stock has moved up to 50 million square feet in 2024 from 1 million square feet in 1999, reflecting a 50-fold expansion. It credited the growth to the city’s strategic location and the government’s push for manufacturing and exports.
According to the consultant, approximately 40% of India’s EV manufacturing takes place in Tamil Nadu. The report stated that market dynamics are stable with an average absorption of 7 million sq ft per year and almost 70% of the stock is Grade A.
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Similarly, retail space in Chennai has expanded from 1.17 million square feet to 7.1 million square feet in 2024, depicting a six-fold increase in the past 25 years, the report said.
The report also noted that perhaps one of the most significant developments has been Chennai’s emergence as a major data center hub. The city is now the second-largest data center market in India, with a colocation capacity of 88 MW.
With the presence of six cable landing stations, good availability of power, and talent pool, Chennai is becoming an ideal location for data centres, JLL said in the report. The city has two data centre hubs – Ambattur and Siruseri – with more than 20 km of distance between them, making it possible for cloud players to adopt a three-site strategy with the emergence of a new data centre zone.
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According to JLL, approximately $1.54 billion of investment is expected in Chennai in the next two years in the data center sector, which is 27% of the overall investment in India.
