Knight Frank India in its latest report, India Real Estate: Residential and Office (July - December 2023), cited that Chennai commercial real estate market has registered the highest growth in percentage terms, amongst the top eight markets in the country. Registering an exponential annual growth of 92%, the office volume transactions of the city has increased from 5.6 mn sq ft in 2022 to 10.8 mn sq ft in 2023.
At a historic high, Chennai has crossed the transaction volumes of 10 mn sq ft for the first time, (Knight Frank India study period since 2006), surpassing its earlier best annual transacted volumes of 8.7 mn sq ft recorded in 2007. This surge is predominantly attributed to a robust leasing momentum driven by large space take up by multinational corporations. This is reflective in the 56% of city’s office leasing market share by Global Capability Centers (GCCs) and emerged as the dominant end user license or occupier in the year 2023. The heightened demand is effectively supplied with new office space volume of 6.6 mn sq ft,
The vacancy level of the city has declined to 10.5% in 2023 from 13.3% recorded in 2022. The average transacted rent has surged by 6% YoY in 2023 to INR 65 per sq ft per month in the year 2023.
On residential market performance, Knight Frank’s report stated that Chennai's booming manufacturing, hospitality, and logistics sectors are attracting larger workforce, leading to increased demand for affordable housing. This has emanated into 41% increase in sales in affordable price category to 5,536 units, accounting 37% of the total sales during the year 2023. The share of mid-priced home segment was recorded at 40% of the total sales in the city, registering the highest residential sales of 5,896 units during the year 2023. With 5% YoY increase, the total residential sales in the city were recorded at 14,920 units in 2023. The volume of residential launches was recorded at 16,272 units in 2023, marking an annual increase of 6% over the year 2022.
At a steady price appreciation of 4%, the city registered an average residential price of INR 4,472 sq ft per month.