Chennai real estate market is witnessing an unparalleled growth in the commercial sector. The property value graph is showing a constant increase in commercial property values but it is estimated to cross the threshold very soon.
Chennai’s economic set-up and its infrastructure favour both industrial as well as the service sector. Traditional segments like the shipping sector prefer Chennai because of its geographical location. New businesses, like the Back office Processing Operations and Information Processing Centres, too prefer Chennai to other neighbouring cities since Chennai’s city’s infrastructure favours such activities. In fact the demand for commercial activities surpasses its supply, even after a number of commercial projects are under construction. IT companies are fuelling this demand for commercial space in Chennai.
Leading developers and realty majors have launched their new commercial and residential projects to cater to the rising demand. Most of the new projects are on Chennai’s IT Corridor. Chief locations like Nungambakkam, Mount Road, Anna Salai, Cathedral Road and Dr Radhakrishnan Salai are witnessing maximum appreciation in the property rates. These areas are accessible and are hence preferred by the property builders.
The present commercial capital value of Radhakrishnan Salai is 4,500 – 5,000 Rs/ sq ft. This is by far the most expensive commercial area in Chennai. A property booker from Chennai informs that other prestigious commercial localities like Anna Salai and Cathedral Road have capital value of 4,200 – 4,500 Rs/sq ft.
Commercial rental values are equally high in these areas and are expected to escalate in the coming years. Rental values for 1,000 sq ft space at Radhakrishnan Salai are about 35,000 -50,000 Rs/sq ft. This is certainly high as compared to other places in Chennai. Chennai’s commercial segment is poised to grow further when all the locations along the IT Corridor become operational.
This is good for the city’s trade and commerce but will affect the property rates sharply. Property brokers feel that the best deal is to capitalise on this city’s present commercial hubs. These areas are sure to swell in the next five year, ensuring good returns as rentals or as capital.
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