ASIA PACIFIC OUTLOOK 2025

CHENNAI

KEY MESSAGES

Supply

Demand

Rents

Key Outlook

Emerging markets such as Moun-t Poonamallee Road (MPR) and Pallavaram-Thoraipakkam Road (PTR) have witnessed healthy demand and supply, and this trend is likely to persist in the upcoming years. The prime markets of South -West and Suburban South will enjoy enhanced connectivity to all other parts of the city following the completion of Phase 2 of the Chennai Metro.

Chennai is expected to witness a new supply influx of 12.4 msf over next two years.

Net absorption is projected to reach 2.8 msf by the end of 2024, owing to healthy fresh leasing activity through the year.

Rents in 2024 have witnessed strong growth, with a projected increase of ~5% by year-end, rising from INR885 per sq ft per year to INR931 per sq ft per year. .

Of this anticipated supply for 2025-2026, nearly 41% is concentrated in the prime submarkets of Southwest and Suburban South.

Due to robust absorption in 2024, vacancy rates are expected to decline by 1.1% in 2024.

The anticipated addition of premium Grade A supply is likely to maintain rental appreciation over the coming years.

Net absorption is forecasted to remain strong, averaging 2.7 msf annually, driven by healthy ongoing demand.

Post-2026, the average annual supply is expected at between 5.5 and 5.6 msf.

Chennai’s office market is expected to witness strong demand driven by IT-BPM, E&M, BFSI and Flexspace operators.

Cushman & Wakefield

ASIA PACIFIC OUTLOOK 2025