Presentation on the India Real Estate Outlook Report highlighting the residential and office real estate scenario in Chennai.

1. Chennai
July – Dec 2014

2. Residential
July – Dec 2014

3. 2014 witnesses a sharp drop in demand for
residential properties
RESIDENTIAL
Chennai residential market launches, absorption and price trend
LAUNCHES ABSORPTION WT. AVG. PRICE (RHS)
4% rise in price
Y-O-Y in 2014
2% rise in H2 2014 vs. H2 2013
H2 2013 – 10,421 units
H2 2014 – 10,643 units
9% fall in H2 2014 vs. H2 2013
H2 2013 – 8,015 units
H2 2014 – 7,320 units

4. RESIDENTIAL
Residential Market in Chennai in Year 2014
Sales
volume
fell
by
14%
20,960 units sold vs.
24,444 units in 2013
New
launches
dropped
by
25%
24,850 units launched vs.
18,700 units in 2013

5. In the overall share, North and Central witness a
significant jump while West stays steady
RESIDENTIAL
3,162units
3,195units
3,661units
165units
357units
1,620units
3,545units
275units
757units
7,840units
1,746units
19units

6. A moderate 4% hike in prices have continued the
momentum in sales during Jul – Dec 2014
RESIDENTIAL
397units
312units
610units
2,463units
3,895units
2,693units
316units
259units
306units
6,735units
6,948units
8,990units

7. Chennai to take little less than 2 years to exhaust the
existing inventory
RESIDENTIAL

8. West Chennai - One of the best performing areas with
low prices and proximity to employment hubs
RESIDENTIAL
Total Unsold Units
47,140
as on December 2014
Central
West South
North

9. At 5%, Alandur has witnessed the highest price rise in
the last 12 months – Upcoming Metro the driver
RESIDENTIAL

10. Concluding Remarks
 Chennai Residential market on the slow track - Absorption drops
14%
 Moulivakkam building crash makes further dents; launches drop by
25% in 2014
 Prices increased by 4% Y-O-Y during H2 2014
RESIDENTIAL

11. Going forward
 Launches are expected to fall by 20% in the Jan – Jun 2015 period
 Sales to remain relatively steady at 11,360 units during Jan – June
2015; registering a growth of 10% on a Y-O-Y basis
 Price is expected to increase by 4% during Jan – Jun 2015
 RBI policy rate cut infuses hope among city home buyers – Are
better days expected?
RESIDENTIAL

12. Office
July – Dec 2014

13. Office vacancy levels have fallen drastically owing to
robust leasing activity in 2014
OFFICE
23%
24% 23% 21% 19% 16%24%

14. New supply fell by 57%, absorption registered a 7%
growth Y-O-Y
OFFICE

15. IT / ITeS continues its steady run while
Manufacturing drops from its peak
OFFICE
y

16. Among all other business districts, SBD led the city in
terms of absorption
OFFICE
y
231,350sq.ft.
285,000sq.ft.
200,000sq.ft.
317,500sq.ft.
72,000sq.ft.
93,300sq.ft.
1,572,000sq.ft.
479,500sq.ft.
291,411sq.ft.
731,500sq.ft.

17. Rental movements to grow by 3% in the next 6
months
OFFICE
y

18. Concluding Remarks
• City office market on a healthy diet; posts a 7% rise in
absorption in 2014
• Chennai realtors bet big as vacancy levels see a significant
drop
• Chennai maintains a steady run-rate - Will it continue the
hold over absorption?

19. Going Forward
• Chennai is likely to witness a restricted supply of new office
space during Jan – Jun 2015; a 5% decline on a Q-O-Q basis
• Absorption likely to be 2 mn.sq.ft. during Jan – Jun 2015;
slightly better than that of H1 2014
• Weighted average rental to rise by a nominal 3% on a Y-O-Y
basis

20. KnightFrank.India@in.knightfrank.com
Research@in.knightfrank.com
Contact