CHENNAI: Chennai has witnessed a 35 per cent jump in office space leasing as compared to the corresponding period of last year (third quarter in 2018), according to a report by CBRE, one of the leading real estate and consulting firm. The rise was primarily driven by robust demand from technology, engineering, banking, financial services and insurance firms.
According to the report, office space leasing activity in Chennai increased on a quarterly basis driven by large-sized deals (more than 100,000 square feet) in special economic zones while supply addition was witnessed in Central Business District (CBD), Off-CBD and Old Mahabalipuram Road (from Toll Gate to Sholinganallur).
Ameeth Raja, Head - Advisory & Transaction Services, Tamil Nadu and Kerala, India, CBRE South Asia told Express that the market witnessed a jump in leasing activity primarily driven by demand among Special Economic Zone projects in key suburban and peripheral locations of the city with enterprises taking up space for their expansion requirements.
The current quarter also saw inking of large pre-commitment deals in prominent under construction projects which are lined up for delivery in the coming years. This momentum is expected to continue for
the next few years owing to the positive intent from corporates to consolidate and expand their operations in the city into new investment grade projects.
According to the report, the most preferred locations for office space leasing was the OMR Zone from Shollinganallur to Siruseri followed by Toll Gate to Shollinganallur stretch and these accounted for nearly 80% of the total absorption.
S Sridharan, chairman of Confederation of Real Estate Developers Association of India, Tamil Nadu, told Express that it is a welcome sign and highlighted that Chennai is spearheading the growth. He said
presently there is a huge demand in office space as lot of top projects including the World Trade Centre project coming up in the city. "Leasing of office space going up is a good sign. It will generate more jobs for youths," he added.
Builders Association of India Chairman Southern centre, S Rama Prabhu told Express that the rise in leasing activity could be attributed to the dip in prices in rental space. However, Raja says that prices are
not going to dip, it will be rationalised and not go up steeply by the end of the financial year, he added.