Demand for Rented Office Spaces in Chennai
The Indian sub-continent has seen an acceleration in demand for office spaces and office rentals. According to a recent study for the financial year 2020-2021, the Southern cities such as Bengalaru and Chennai offer a mega contribution of almost 65% of the total demand for office space in India. The pandemic situation over the last two years has put brakes on the demand for office space in Chennai and yet the rental rates have increased by almost 10% on a yearly basis.
Chennai commercial real estate is mainly dominated by the back-office operations of multinational companies so the yearly demand for office space for rent in Chennai has always been steady and on the rise. Even during lockdown phases, major Indian cities have recovered quickly to restart office operations.
Economic Recovery After Reduction in Cases
After the previous year's slump in office space absorption in the city, Chennai real estate developers feel that the space absorption was much better even during the pandemic phase and had a low impact on the commercial property market. The quick pace of vaccination drives all over the city has helped reduce the Covid-19 cases and has boosted the growth of the office space market in Chennai.
Real estate experts suggest that there is a lull in supply in areas such as CBD, Guindy, Anna Salai, Tnagar, Nungambakkam, and Perungudi. However, these are the preferred areas due to easy connectivity, transport facilities, and social infrastructure. For instance, if you desire a commercial space for rent in Perungudi, especially in the World Trade Center, rather than in Madipakkam, you may have to invest more according to the growing land demand.
Developers are quite confident that the office leasing business will gain full recovery with ease in lockdowns and people resuming office work in office spaces. The JLL data suggests that by the end of the year 2021, key southern cities may witness a record growth for a new supply of office space.
New Office Spaces Chennai
JLL reports that the new supply of office space in India has increased by almost 75% to cross 25 million sq. Ft mostly across major cities despite the pandemic. The new commercial space supply was 25.11 million square ft. In 2021, in cities Mumbai, Delhi (NCR), Pune, Bengaluru, Kolkata, Chennai, and Hyderabad.
Property developers are optimistic that office space for lease in Chennai will gain momentum once businesses are reinstated. When the workforce in India gets fully vaccinated, people can return back to their offices, and the demand chain will be sustained.
New office space supplies in key areas such as Old Mahabalipuram Road and Central Business District were some places that witnessed an increase in rental spaces in the year 2018. Similarly, in 2021, healthy leasing operations were noticed in Mount Poonamallee Road, PTR, or Pallavaram Thoraipakkam Road, Guindy, and OMR areas.
Industry and real estate specialists state that the five percent rise in Chennai's rental market was coupled with net absorption in places that include Ramanujan City, SP Infocity in Perungudi were taken by commercial giants Amazon, World Bank, and Freshdesk to name a few. The continuous rise of small-scale businesses and start-ups has enhanced the chances of a possible rise in rental office spaces in the city within the next few years.
Top property advisor Colliers feels that the tech firms are the primary reason behind the rising demand for office leasing in Asia. The tech sector may account for almost 25% of the total office space demand over the coming years.
You can seek guidance from leading property developers Brigade Group in India to invest in top property sectors in Chennai that are considered ideal office rental space.