1. Office Spaces: A Surge in Demand
Chennai has emerged as a significant hub for office space demand, particularly from Global Capability Centres (GCCs), IT-BPM firms, and flexible workspace providers. In the first quarter of 2025, the city recorded its highest office leasing activity in five quarters, with a total leasing volume of 2.9 million square feet, reflecting a 93% year-on-year growth. Notable transactions include Tata Consultancy Services leasing 690,000 sq ft at Ozone Tech Park and Walmart signing a lease for 465,400 sq ft in CapitaLand ITPC. The Pallavaram-Thoraipakkam (PTR) zone and Old Mahabalipuram Road (OMR) Zone 2 accounted for nearly 60% of the total leasing activity, indicating a strong preference for these corridors.
2. Retail Spaces: High Street Retail Leading the Way
Chennai’s retail real estate sector is experiencing a notable shift, with high street retail spaces gaining significant traction over traditional malls. In the first quarter of 2025, high street locations accounted for over 90% of total retail leasing, driven by strong consumer footfall and limited supply. The North-West submarket, including areas like Anna Nagar and Perambur, led the market with a 38% share, followed closely by the Off-CBD region, encompassing Arcot Road and Aminjikarai, with a 37% share. Rental growth was concentrated in these high-demand corridors, with quarter-on-quarter increases of 3-4%.
3. Industrial and Warehousing: Rapid Expansion
Chennai’s strategic location and robust infrastructure have positioned it as a key hub for industrial and warehousing activities. The city witnessed a significant 72% growth in warehouse leasing volumes compared to the first half of 2024, with the Oragadam submarket leading with a 20% share, followed by Madhavaram at 19%. The demand is primarily driven by third-party logistics (3PL) players, accounting for 45% of the sector’s growth, and the automotive industry, contributing 14%. Notably, IndoSpace, a prominent warehouse developer, announced plans to increase its investment in Tamil Nadu by 41% over the next three years, aiming to meet the escalating demand for industrial parks.