The Chennai residential market has registered a 3% year-on-year growth during the first half of 2023. The city recorded sales of 7,150 housing units during the first six months of 2023 compared to 6,951 housing units sold in H1 2022, according to Knight Frank India’s latest report, India Real Estate: H1 2023 (January to June 2023).
Details provided in the report shows that new home launches also increased by 7% YoY from 7,570 housing units in H1 2022 to 8,122 housing units in H1 2023. During the January to June 2023 period, the average price of residential properties in Chennai too rose by 3% YoY to ₹4,350 per sq ft from ₹4,300 per sq ft.
According to Knight Frank, the steady pace of sales has led to a fall in the average age of inventory in Chennai to 10 quarters in H1 2023 from 12.6 quarters in H1 2022 while the Quarters-to-Sell (QTS) has largely remained stable at 4.4 quarters in H1 2023 as compared with H1 2022.
Sales was largely concentrated in the south and west micro-markets, which cumulatively accounted for 89% of the total sales during the period. The south micro-market locations along the OMR and GST Roads have continued to garner most homebuyers’ interest comprising a total share of 64%, while the more affordable locations such as Porur, Valasaravakkam and Ponamalle toward the west accounted for 25% of the total share.
The mid segment of ₹5-10 million, as always, constituted the bulk of sales and accounted for 40% during H1 2023 as compared with 44% in H1 2022. Developers launched 8,122 units in the first half of 2023, a 7% increase from the same period last year. Locations such as Medavakkam, Navalur (OMR), Siruseri SIPCOT (OMR), Thoraipakkam (OMR) and Pallavaram saw increased development activity during the period.
THE CHENNAI OFFICE MARKET
Details provided by Knight Frank show that the Chennai office market has recorded an all-time high in office leasing volumes during H1 2023. Office transaction volumes increased by a staggering 107% year-on-year to be recorded at 4.5 mn sq ft. driven by strong leasing momentum by multinationals during H1 2023. The market has also fostered a broad tenant base during the period. Offshore units of multinational corporations that operate across the globe i.e., global capability centers (GCC), accounted for the majority of the transactions for Chennai during H1 2023. Around 47% of the overall transactions were leased by GCCs occupiers.
Companies whose operations mainly cater to Indian markets accounted for 28% of the office space leased during H1 2023. Within the India facing space the BFSI sector was the most dominant and accounted for bulk of the transactions. These were followed other service sectors such as engineering, logistics and healthcare. The demand for flex spaces continued to remain strong, accounting for 13% of space taken up in H1 2023.
