[GAGA REALTY] [JOINT VENTURE] [GAGA HOMES]
The real estate landscape in Chennai has undergone a dramatic transformation in the past 25 years, with office witnessing a 75 fold increase in leasing at 76.5 million sq. ft by H1 of 2024, said JLL in its latest report. A similar growth trajectory has been witnessed across all segments of real estate in the city. The real estate sector in Chennai has experienced significant growth, particularly in the office segment, driven by the IT/ITES sector and the establishment of Global Capability Centers (GCCs). Chennai has emerged as a prominent GCC hub, significantly impacting Tamil Nadu’s economic landscape. The state now accounts for 12% of India’s overall GCC market share, with a strong presence in the Banking, Financial Services, and Insurance (BFSI) sector, claiming 15% of the national footprint. Notably, 60% of the technology operations of Fortune-listed BFSI companies are based in Tamil Nadu.”Chennai’s transformation over the past 25 years is nothing short of remarkable. The data clearly shows the city’s evolution from a manufacturing hub to a diversified economic powerhouse. With continued infrastructure development and strategic policies in place, Chennai is well-positioned to capitalize on emerging trends in technology, sustainability, and urban living. The city’s resilience and adaptability bode well for its future as a key player in India’s economic landscape,” said Siva Krishnan, Senior Managing Director (Chennai & Coimbatore), Head – Residential Services, India, JLL. The residential sector has grown tall as well. From just 10,100 housing units in 1999, Chennai now boasts 275,000 units till H1 2024, which is a 27-fold increase. This expansion has been accompanied by a significant rise in property values, with capital values ranging from Rs 5,000 to Rs 25,000 per sq. ft in 2024, up from Rs 850-2,500 per sq. ft in 1999. Post Covid, that is 2021 onwards, an increase in the percentage of end users in the plots segment has led to a surge in plotted development projects in the suburbs of the city. Implementation of Real Estate Regulatory Authority (RERA) has streamlined the market by improving various parameters such as transparency, accountability, and project delivery timelines. There is a visible upsurge in residential projects along metro rail corridors. In 2024, major infra projects such as Kilambakkam Bus Terminus and Parandur have also been added. “The logistics and industrial sector has also seen remarkable growth, with stock increasing from 1.0 million sq. ft in 1999 to 50 million sq. ft in 2024, a 50-fold expansion. This growth has been fuelled by the city’s strategic location and the government’s push for manufacturing and exports. Approximately 40%* of country’s EV manufacturing takes place in Tamil Nadu. Market dynamics are stable with an average absorption of 7 million sq. ft per year. Almost 70% of the stock is Grade A, which depicts Grade A is taking the centre stage”, it said. The report mentioned, “Similarly, retail space in Chennai has expanded from 1.17 million sq. ft to 7.1 million sq. ft in 2024, depicting a 6-fold increase in the past 25 years. This growth reflects the city’s rising affluence and changing consumer preferences”. Perhaps one of the most significant developments has been Chennai’s emergence as a major Data Center hub. The city is now the second-largest Data Center market in India, with a colocation capacity of 88 MW. This positions the city well for the digital economy of the future. With the presence of 6 cable landing stations, good availability of power, and talent pool, Chennai is becoming an ideal location for a data centre. The city has two data centre hubs i.e., Ambattur and Siruseri, with more than 20 km of distance between them, making it possible for cloud players to adopt a three-site strategy with the emergence of a new data centre zone. New cable landings are expected to influence the growth of the data centre hubs in the city. Approximately $ 1.54 billion of investment is expected in Chennai in the next two years in the Data Center sector, which is 27% of overall investment in India. As Chennai looks into the future, it is well-positioned to capitalize on emerging trends in technology, sustainability, and urban living. The city’s resilience and adaptability, coupled with continued infrastructure development and strategic policies, bode well for its future as a key player in India’s economic landscape.
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