C SHIVAKUMAR @ Chennai
Chennai’s residential real estate market has kicked off 2025 with notable momentum, as both buyers and developers bet on the city’s evolving infrastructure and commercial promise. Housing sales rose by 10% year-on-year to 4,357 units in the first quarter, with new supply climbing 5% to 4,576 units, according to data shared with The New Indian Express.
The southern metropolis is emerging as a balanced urban growth centre, where end-user demand, policy support, and investor interest are beginning to align.
“The market has maintained a steady rhythm in the first quarter, which suggests momentum will likely continue through the rest of the year,” said Srinivas Anikipatti, Executive Director for Tamil Nadu and Kerala at Knight Frank India. He cited robust commercial leasing—particularly from global capability centres (GCCs) and co-working operators—as a leading indicator of Chennai’s strengthening appeal as a business hub.
Indeed, office activity has paralleled the housing market’s performance. Chennai registered 2.6 million square feet of office leasing in Q1, contributing 10% of India's total leasing activity in green-certified office spaces, per CBRE. Tech, FMCG, and flexible workspace players led demand.
Corridors of Change
Mount Poonamallee Road (MPR) and Pallavaram-Thoraipakkam Road (PTR) have emerged as dual engines of growth, transforming into key commercial corridors. In 2024, these micro markets accounted for 6,000 residential unit launches—about 30% of the city’s total—underscoring their strategic importance.
“PTR is quickly gaining traction,” said VS Sridhar, Executive Managing Director, Tamil Nadu & Kerala, and Head of GCC Advisory-Operations at Cushman & Wakefield. “Together, MPR and PTR accounted for one-third of Chennai’s leasing activity last year, and they are expected to deliver nearly 60% of future office supply over the next two years, with a strong pipeline of Grade A+ office space.”
These corridors are also catalysing residential growth in surrounding neighbourhoods like Manapakkam, Porur, Pallikaranai, and Medavakkam—driven by improved connectivity, available land, and access to employment hubs. Residential prices have followed suit, rising 7% year-on-year to an average of ₹4,854 per square foot, reflecting both stable demand and disciplined supply.
Infrastructure, Affordability and Broader Access
Chennai’s residential demand, while robust, remains grounded in end-user affordability, Anikipatti noted. Ongoing infrastructure investments—especially new metro lines and the Tamil Nadu government’s Grid of Roads initiative—are extending the urban envelope, unlocking development potential in previously underinvested areas.
This decentralised growth pattern is evident in rising interest across north and west Chennai. While southern zones like Velachery and Tambaram remain popular, areas like Manali, Korukkupet, Ambattur, and Avadi are gaining traction, suggesting a maturing market with more geographically distributed demand.
Central business districts such as T. Nagar and Nungambakkam continue to command premium values. However, Chennai’s future lies in its ability to foster inclusive urbanisation, spreading growth beyond its historic heartlands.
The Confederation of Real Estate Developers’ Associations of India (CREDAI) projects 20–25% growth in residential real estate nationwide in 2025, fuelled by a combination of infrastructure upgrades, credit availability, and aspirational urban migration. Chennai is expected to mirror, if not outpace, this trend, particularly with the expected acceleration in new supply across emerging corridors.
Over 19,000 units were registered in 2024 across 182 projects under the Tamil Nadu Real Estate Regulatory Authority (TNRERA). CREDAI anticipates a 15–20% increase in launches this year, spurred by newly accessible land parcels and regulatory clarity.
Calls for Inclusive Growth
While the overall trajectory is positive, developers are urging the state government to do more to support homeownership, particularly among women. CREDAI has advocated for stamp duty concessions for female buyers—similar to those offered in Maharashtra—as part of a broader push for gender-inclusive housing policy.
Sridhar believes the momentum in the office sector will also help underpin residential demand. “GCCs continue to dominate the city’s leasing activity, accounting for 42% in Q1-25, up from the two-year average of 32%. These tenants are increasingly choosing emerging corridors for their affordability and scalability.”
Anshuman Magazine, Chairman & CEO of CBRE India, noted that Chennai, alongside Pune, is becoming a preferred destination for global tenants thanks to its talent base and infrastructure readiness. “India’s office sector is on a firm footing, and cities like Chennai are well-positioned to ride the next wave of strategic expansion.”
With both commercial and residential segments growing in tandem, Chennai is fast shedding its conservative real estate reputation, making a strong case for itself as one of India’s most dynamic urban property markets.
EOM
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