CHENNAI: Chennai is going to witness a revival of growth in the office space sector with three major projects set to come up, according to president of the Confederation of Real Estate Developers Association of India Ajith Chordia.
Reacting to a study by Colliers International which stated that Chennai’s office space absorption has dipped by nearly 34 per cent over the previous quarter as a number of transactions are still in execution stages, Chordia said that the city is likely to have 11.5 million square feet of office space by next quarter.
Of the three major developments, one is coming up at Pallavaram-Thoraipakkam site. This will add 4.5 million square feet of office space, he said.
“Second is a property of DLF which is coming up near Tidel Park. This will add another 3.5 million square feet to four million square feet and third is the proposed World Trade Centre by Brigade Group in Chennai. This will be set up at Perungudi Real Estate and will add three million square feet of office space,” said Chordia.
Interestingly, Chennai’s World Trade Centre will come up at a cost of over Rs 1,000 crore.
The three developments are likely to trigger a growth in office space in the city.
Currently, the enquiry is good despite the city having faced the worst ever floods in December 2015, he said.
Colliers International Study has said that the first quarter of 2016 had recorded nearly 0.77 million square feet of absorption volume of office space out of which 86 per cent is attributed to information technology and information technology-enabled services.
Other services like banking and financial services and consulting too accounted for 7 pc and 4 pc share in the total transaction volume, said the study.
Renault Nissan Technology Business Centre (180,000sq feet), Citibank (48,000sqft), Lennox (38,000sqft) and barry Wehmiller International (38,000 sqft) were amongst some prominent corporate occupiers that leased spaces on GST Road, Old Mahabalipuram Road and Guindy respectively.
It is learnt that 33 pc of total absorption of office space in this quarter was concentrated in OMR-pre toll corridor as this remains the most preferred location for occupiers to consolidate and expand their manifold operations.
Office rental rates have gone up by 7 pc in OMR-Pre toll area while the central business district witnessed 3 to 5 pc rise due to preference for inner city areas.