Commercial real estate in Chennai is currently going through a phase which is quite the case in many other markets in the country – dwindling supply of quality space. From a developer’s/landlord’s perspective, this is the ideal time to ‘make hay’ provided they play it right. The wait for many owners, especially those who invested in the peripheral parts of OMR, is finally getting over.
The market has begun to see traction in spaces that were literally ‘written off’ earlier simply because the other preferred options have all been taken. The ‘other preferred’ options are those that were perhaps superior in technical specifications or had an existing marquee client list or simply because the location was just great. Since these options are no longer available, clients do not have a choice but to settle for the ‘next best’ even if it meant compromising on parameters that are critical to quality. From a macro view, the market is robust, abuzz with activities and in locations like the central business district, it is competition where the fastest decision wins. Simply put, supply is king in Chennai and if you are a proud owner of a grade ‘A’ space, happy days are ahead.
But would all this mean that clients/end users face the brunt in the mid to long term and be at the mercy of the owners? In the short term, the answer is perhaps ‘yes’ and more so in active micro markets. However, with announcements by Brigade to build its next WTC in OMR, RMZ committing to a million plus square feet in Porur, Olympia group eyeing multiple options in Guindy and Prestige group planning a large campus in the CBD, cycles will change and the current landlord’s market will begin its shift swinging towards the tenant. Also, hopefully by then the political climate would be stable considering the elected government would have spent at least a year in office.
This post would be incomplete if the December deluge that devastated Chennai last year is not touched upon. And the one pertinent question on most people’s minds is how Chennai has fared post the floods? It is now clearer than daylight that the floods was not just ‘force majeure’ but terrible mis-management by human beings. Therefore, companies who have invested in Chennai, running large operations have not decided to shut shop but on the contrary are ramping up and even evaluating large consolidation options.
There certainly was a dip in the sentiment initially but thanks to multiple buildings reporting zero down time, a passionate citizen group ready to put their lives at risk to help and an overall conducive environment has only resulted in bringing in more positivity. Even in the residential / land realm, the floods are now history and it is business as usual!
About the author
Shaju Thomas heads the Office Services team in Chennai. He has extensive experience managing Commercial Real Estate services for corporates. He provides his clients with the right solutions backing it with valuable knowledge of real estate nuances in the market.