- Average rent in office market grew by 6% YoY in 2024 at INR 69.2/sq ft/month
- Mid-range segment of INR 5-10 mn dominated sales in the city in the residential sector
- Annual average residential price appreciation recorded at 7%
Chennai, January 7, 2025: Knight Frank India in its latest report, India Real Estate: Office and Residential (July – December 2024) cited that 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. GCCs dominated the market share in Chennai in 2024, constituted 39% of total transactions of 3.2 mn sq ft. In 2024, Chennai’s rental rates soared to high of INR 69.2 per sq ft per month, reflecting a 6% 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.
The report also cited that Chennai’s residential market experienced a 9% YoY growth in 2024, with sales reaching 16,238 units. Homes priced between INR 5-10 mn in Chennai continued to lead the market, accounting for 43% 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 INR 100 mn to 200 mn witnessed the highest percentage growth in YoY terms at 107%.
Office Market Update: January – December 2024
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% 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% in 2024.
Chennai market Office summary
Parameters. 2024. 2024 Change ( YoY)
End-User Categories
In terms of the end-use split of office spaces transacted, GCCs dominated the market share in Chennai in 2024, constituted 39% of transactions. The total transactions totalled up to 3.2 mn sq ft. Following GCCs, India facing businesses tallied 1.9 mn sq ft in transactions. Flex recorded 1.3 mn sq ft while third party IT services witnessed 1.8 mn sq ft of transactions in the city recording the highest YoY growth at 61% across the end use category in Chennai.
Chennai’s office market witnessed 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.”
Residential Market Update: January – December 2024
The Chennai residential market has exhibited a 9% 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% YoY increase. Of these, 8,576 units were introduced in the second half of the year, reflecting a 5% YoY growth in 2024.
Developers launched 17,431 units in 2024, marking a 7% increase from the units launched in 2023. Launches were predominantly seen in the ticket size category of 5-10 mn constituting 51% market share in 2024. Most of the launches were concentrated in the southern and western micro-markets during the period, 56% and 28% 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.
With 9% YoY increase, the total residential sales in the city were recorded at 16,238 units in 2024.
Home Price Ticket Categories
In 2024, Chennai’s super luxury housing segment, with ticket sizes ranging from INR 100-200 mn, saw the highest YoY growth, increasing by 107.69% from 13 units in 2023 to 27 units in 2024. The luxury housing segment, with ticket sizes between INR 50-100 mn, experienced the second-highest YoY growth of 41.58%, rising from 101 units in 2023 to 143 units in 2024. The mid-range segment (INR 5-10 mn) continued to dominate Chennai’s market comprising 43.2% of sales in the city, recording the highest number of units sold, with 7,022 units in 2024
About Knight Frank:
Knight Frank LLP is a leading independent, global property consultancy. Headquartered in London, Knight Frank has 27,000+ people operating from over 740+ offices across more than 50 territories. The Group advises clients ranging from individual owners and buyers to major developers, investors, and corporate tenants. For further information about the Company, please visit www.knightfrank.com
Knight Frank India is headquartered in Mumbai and has more than 1,800 experts across Bangalore, Delhi, Pune, Hyderabad, Chennai, Kolkata, and Ahmedabad. Backed by strong research and analytics, our experts offer a comprehensive range of real estate services across advisory, valuation and consulting, transactions (commercial, retail, land capital and residential), project management, and facilities management. For more information, visit www.knightfrank.co.in
