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The estimated stock under construction in these new micro markets is approximately 3.5 million sq.ft. of which an estimated 1.6 million sq.ft. has already been committed to various corporate tenants.

Real estate services firm Cushman & Wakefield released this information in a recent research report.

Although numerous multinational companies are considering the suburban markets favourably, given the new developments, the superior construction and the absence of congestion; the CBD and its neighbouring locations continue to attract a strong demand as the traditional business destination. These micro markets, including Anna Salai, T.Nagar and Nungambakkam, already face space constraints and will continue to do so in the short to medium term, as developments are limited due to the high land costs and lack of new land parcels for fresh construction.

IT/ ITeS companies typically expand into multiple cities as part of their natural growth and also as a business risk mitigation strategy. This sector has been leading the demand in Chennai and the trend is expected to continue as an increasing number of information technology related businesses are expanding operations into Chennai.

The rentals in the CBD/ Off CBD and suburban micro markets are expected to increase marginally during the next quarter due to robust demand from the corporate tenants and the shortage of supply in the former location. Conversely, rentals in the peripheral locations are expected to remain stable due to excess supply.

Leasing Transactions
In key leasing transactions, AIG leased approximately 72,000 sq.ft. built-up area in Lords I, Guindy. Photon Infotech leased approximately 40,000 sq.ft built-up area in an IT Park on the IT Highway.  Polaris leased approximately 50,000 sq.ft. built-up area in the Prince IT Park in Ambattur. Scope International leased approximately 216,780 sq.ft. built-up area in Digital Zone II.

Prime and Grade A office space rentals are in the range of Rs.50 per sq.ft. for the CBD - Anna Salai, Rs.44 per sq.ft. for off CBD, T.Nagar and Nungambakkam, Rs.38 per sq.ft. for Suburban, Guindy and Perungudi, and Rs.32 per sq.ft. for Peripheral and Old Mahabalipuram Road.

Investment / Sale
Capital Values (per Sq.ft) are Rs.5,200 in CBD-Anna Salai, Rs.4,600 in off CBD, T.Nagar and Nungambakkam, Rs.3,900 in Suburban, Guindy and Perungudi and Rs.3,400 in Peripheral and Old Mahabalipuram Road.

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About Cushman & Wakefield

Cushman & Wakefield is the world’s pre-eminent real estate services firm. Founded in 1917, the firm has 192 offices in 58 countries around the globe, and more than 11,000 talented professionals. The firm delivers integrated solutions by actively advising, implementing and managing on behalf of landlords, tenants, and investors through every stage of the real estate process.  These solutions include helping clients to buy, sell, finance, lease, and manage assets. Cushman & Wakefield also provides valuation advice, strategic planning and research, portfolio analysis, and site selection and space location assistance, among many other advisory services.