High Times for Chennai Real Estate Market

2016 saw several new measures being implemented – the passage of RERA, GST, FDI reforms and demonetization – that are expected to further increase the investment profile of real estate, still the preferred investment asset for Indians.

Chennai has for long been known to be a market fuelled by diverse economic drivers as well as by end-user demand.  The city’s broad industrial and manufacturing base combined with its port and IT/ITeS sectors have contributed to its sustained growth as one of the largest metros in the country. This in turn has attracted a steady influx of skilled workforce raising absorption of office and residential space.

Highlights:

• In 2016, the city’s IT/ITES sector absorbed over 70% of office space – part of a record gross absorption of 6 million sq. ft; a 20% increase over the previous year.

• Locations like the southern suburbs which have seen marked increase in office space activity is also likely to see increased traction in residential projects.

• Good news for homebuyers with banks announcing reduction in home loan rates.

• 8 MOUs signed with various players in auto, auto-ancillary, light engineering and telecom sectors; combined with fresh launches of Grade A space supply for warehousing has resulted in private investors shopping for properties in and around Chennai.

• With affordable housing granted infrastructure status – this segment will receive cheaper sources of financing.

• Chennai’s developers can be expected to stay invested in affordable housing projects in anticipation of vastly increasing demand.

For Chennai’s real estate market, the prospects for the future have never been better!

Sarita Hunt, Managing Director – Chennai & Coimbatore, JLL India