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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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CURRENT MARKETBEAT

Office Buildings CBD
Chennai Office Report

Chennai recorded gross office leasing volume (GLV) of ~2.02 MSF in Q4-25, supported by strong occupier activity across key corridors. IT-BPM dominated with 43% share, while flex operators (20%) and BFSI (17%) continued to expand. GCCs remained a major growth engine, accounting for 51% of Q4 leasing and 41% annually, the highest ever for Chennai. Net absorption hit a record 7.02 MSF for the year, fueled by healthy pre-commitments in new Grade A supply. Vacancy held steady at ~12%, while rentals rose 2% q-o-q and 6% y-o-y.

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Shopping Retail
Chennai Retail Report

Chennai recorded retail leasing volumes of ~0.19 MSF in Q4-25, up by 18% q-o-q, taking annual leasing to ~0.68 MSF. Main streets dominated with 92% share, led by Peripheral South (46%), Suburban South (28%) and Off-CBD (17%). Key locations such as OMR, Adyar, T. Nagar and Anna Nagar witnessed strong traction. Department stores led with 30% share, followed by fashion (20%) and F&B (18%), all driven largely by domestic brands. Mall leasing stood at ~0.01 MSF, with Grade A vacancy remaining tight at 1–2%. Main street rentals appreciated 3–5% q-o-q, with Cathedral Road posting a sharper 15% rise, underscoring healthy demand and strong fundamentals in Chennai’s retail market.

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Warehouse Internal Rack
Chennai Residential Report

Chennai recorded ~3,700 residential unit launches in Q4-25, supported by sustained end-user demand across key suburban and peripheral locations. Southern submarkets led activity, with Suburban South I contributing 68% and Suburban South II accounting for 18%. Mid-segment dominated with 75% share, while high-end and luxury launches contributed 17%, reflecting steady traction for premium housing. For the full year, launches reached ~23,300 units, up 13% y-o-y, with southern submarkets driving 81% of supply. Capital values in premium locations appreciated 6–9% y-o-y, while mid-segment rentals posted a strong growth of 9–15% across key submarkets, underscoring healthy market fundamentals.

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Warehouse Internal Rack
Chennai Industrial Report

Chennai saw warehouse leasing volumes of 2.1 MSF. The western corridor dominated with over 80% share. Industrial sheds clocked 2.3 MSF of leasing, which is 2.3X the volume of H1-24. Engineering & Manufacturing occupiers comprised 57% of the demand.

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Warehouse Internal Rack
India Capital Market Report

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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