Chennai recorded office transaction volumes of 8.1 mn sq ft in 2024 while new office completions were recorded at 2.1 mn sq ft. Global Capability Centres (GCCs) dominated the market share in the city in 2024, constituting 39 per cent of total transactions of 3.2 mn sq ft.

In 2024, Chennai’s rental rates soared to a high of ₹69.2 per sq ft per month, reflecting a 6 per cent YoY growth. This surge was driven by strong leasing momentum and increased occupier demand from GCCs, IT outsourcing firms, and India-focused businesses. The limited availability of stock further amplified rental growth in the Chennai market.

Chennai’s residential market experienced a 9 per cent YoY growth in 2024, with sales reaching 16,238 units. Homes priced between ₹50 lakh to ₹1 crore in Chennai continued to lead the market, accounting for 43 per cent of total sales in 2024 at 7,022 units. This reflects the sustained demand for mid-segment housing, appealing to middle-income buyers seeking value-for-money options. Housing sales in the super luxury category of ticket size of ₹1 crore mn to ₹2 crore witnessed the highest percentage growth in YoY terms at 107 per cent, the report said.

The Chennai market saw its second-best year in office leasing with over 8 mn sq ft transacted in 2024. The market which has found favour especially with the GCCs, however, saw a YoY reduction in transactions by almost a quarter over 2023, due the abject lack of supply thus restricting the office uptake in 2024.

New supply or completions in Chennai’s office market witnessed a sharp decline in 2024, falling by 69 per cent YoY with only 2.1 mn sq ft of new office space recorded for the year. Limited office supply, coupled with relatively higher occupier leasing activity, has led to a continuous decline in vacancy rates that stood at 6.8 per cent in 2024, the report said.

Office rent

During 2024, rentals in Chennai increased by 6 per cent YoY following an upward trend including robust leasing momentum and heightened occupier activity by GCCs, IT outsourcing, and India-facing businesses. Combined with limited available stock, these factors have further fuelled rental growth in the Chennai market.

Srinivas Anikipatti, Executive Director- Tamil Nadu and Kerala, Knight Frank India, said, “Chennai’s office market witnessed the second best year in 2024 after 2023’s exceptional growth. Growing occupier interest in GCCs is pointing towards a robust year ahead. However, the lack of quality supply is a matter of concern as demand for office space may soon look for alternatives in other cities, putting Chennai at a disadvantage.”

• Also read: Bengaluru dominates commercial office-leasing space with 18.1 msft in 2024: Knight Frank India

The Chennai residential market has exhibited a 9 per cent YoY increase in residential sales, reaching 16,238 units in 2024. Sales in the Chennai residential market was predominantly concentrated in the south and west micro-markets. Chennai witnessed the launch of 17,431 residential units, marking a 7 per cent YoY increase. Of these, 8,576 units were introduced in the second half of the year, reflecting a 5 per cent YoY growth in 2024.

Developers launched 17,431 units in 2024, marking a 7 per cent increase from the units launched in 2023. Launches were predominantly seen in the ticket size category of 5-10 mn constituting 51 per cent market share in 2024. Most of the launches were concentrated in the southern and western micro-markets during the period, 56 per cent and 28 per cent respectively during H2 2024. This growth was predominantly driven by demand in the south and west micro-markets, which remain key residential hubs due to their connectivity, infrastructure, and rising preference among homebuyers.