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Footprint of Chennai’s Future Business Districts and Resurgence of Integrated Townships

Shweta k • 20/01/2022

Rajiv Gandhi Salai evolved as one of the most sought-after destinations in Chennai to work and live with the amalgamation of lucrative investments; experiences of Walk-to-Work culture combined with the imminent infrastructure that connects south with the rest of Chennai.

With the shift in workplace preferences, Chennai witnessed a pivotal shift in business districts traversing south to the – IT Corridor. Rajiv Gandhi Salai is dotted as the self-sustaining growth corridor which offers copious options for integrated townships with city-like high-end infrastructure and amenities - assuring high rental yield and capital appreciation over the years.

The impending infrastructure fuelling connectivity with the shift in business districts and preferences towards communal living are expected to drive burgeoning residential demand over the next few years.

In this report, we delve into how the unprecedented times of the pandemic brought about a newfound interest in integrated townships. The rationale behind the shift in business districts and how Rajiv Gandhi Salai conceived as the IT metropolis with its testament to high-end integrated townships, now caters to a diverse community.

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Chennai Office Report

Chennai office market recorded gross leasing volume of 2.17 MSF, 10% growth over Q1-25. Fresh leasing dominated, contributing 92% to Q2 leasing. Peripheral South led with 33% share, followed by Suburban South (31% share). IT-BPM commanded a 47% share, followed by the BFSI sector (22% share). The city saw 1.22 MSF of new Grade A supply while net absorption rose to 2 MSF, an 84% q-o-q increase. City-wide grade A vacancy stood at 13.85% while overall city-wide rentals grew 6% y-o-y. 

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Shopping Retail
Chennai Retail Report

Chennai saw retail leasing volume of 0.16 MSF in Q2-25, with main streets, comprising 72% share. North-west submarket led with 45% share, followed by the Suburban South at 22%. F&B segment captured a 28% share, followed by the supermarket/hypermarket category at 27%. Malls recorded 0.04 MSF of leasing activity with overall vacancies at 13.56%. Superior malls reported tighter vacancies at 1-2%. Grade A mall rentals saw a modest uptick while select main streets grew 4-7% q-o-q. 

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Warehouse Internal Rack
Chennai Residential Report

Chennai residential market saw launches of 6,872 units in Q2-25. The Suburban South I submarket dominated with 48% share, followed by Suburban South II submarket (35% share). Mid-segment dominated supply with 76% share, while high-end and luxury segments followed with 17% share. Across most submarkets, rents grew 3-5% q-o-q. Capital values appreciated with weighted average prices for Suburban South I and II new launches growing by 16% and 26% y-o-y.

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Warehouse Internal Rack
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Chennai saw warehouse leasing volumes of ~ 5 MSF, a significant 72% growth compared to H1-24. Oragadam submarket led with 20% share, followed by Madhavaram (19% share). Sector-wise, demand was driven by the 3PL players (45% share) and the Automotive sector (14% share). Industrial leasing surged to 2.4 MSF, 2.3X the volume recorded in H1-24. Oragadam submarket dominated, accounting for 56% of this volume. Key industrial submarkets, including Oragadam, Gummidipoondi and GST Road, saw 4-7% y-o-y rental growth.

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Cushman & Wakefield India Capital MarketBeat reports analyze quarterly economic and commercial real estate activity including supply, demand and pricing trends at the market and submarket levels.

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