Residential launches in Chennai grow by 19%(YoY)in H1 2019; Knight Frank Report. In

Residential launches in Chennai grow by 19%(YoY)in H1 2019; sales, driven by

affordable housing segment, go up by 5%(YoY):Knight Frank Report

Volume of office space transacted in the city saw 6%increase (YoY)in H1 

:Knight Frank India today launched the 11 th edition of its flagship half-yearly report –

India Real Estate. The report presents a comprehensive analysis of the residential (across eight cities)

and office (acrosseight cities) market performance for the period January – June 2019 (H1 2019). The

report findings establish that the number of residential launches in Chennai increased by 19% in H1

2019 to 7,762from 6,523 in H1 2018. The housing units sold saw an increase of 5% in H1 2019 to

8,979from 8,585in H1 2018.

Chennai’s office market witnessed 6% increase in volume of office space transacted in H1 2019 to

0.2mnsq m (1.9mnsqft) from 0.2mnsq m (1.8 mnsqft) in H1 2018.Increased co-working activity is driving  office space absorption in H1 2019 and has contributed to the growth in share of the Other Services sector, from 34% in H1 2018 to 61% in H1 2019.


 Launches grew by 19% year-onyear (YoY) during H1 2019on the back of the Tamil Nadu Combined

Development Regulations (TNCDR) and Building Rules, 2019 notification of February 2019. Of the

total launches, 74% belong to the sub-5 mn category.

 Sales sawa modest growth of 5% YoY in H1 2019 on the back of the demand for affordable housing


 Residential prices have corrected by 3% (YoY) in H1 2019 to INR 47,110/sq m (INR 4,377/sqft) from

INR 48,567/sq m (INR 4,512/sqft) in H1 2018

 Unsold inventory came down by 21% (YoY)in H1 2019 to 17,810 housing units from 19, 027 housing

units in H1 2018. Suppressed launches in 2018 result in a net decrease in unsold inventory.

 The Quarters-to-sell (QTS) level also trended slightly lower for the same reason and stood at 4.5 at

the end of H1 2019.

 The present water crisis in Chennai has been slowing down construction activity and could

eventually result in six-to-nine-month project delays.

Joseph Thilak, Senior Director – Occupier Solutions, Chennai, Knight Frank Indiasaid, “The Chennai

residential market is showing modest signs of recovery with a considerable growth in launches and a

slow but steady momentum in sales. The ‘rightsizingandrightpricing’

trendisareflectionofprevalentmarketneeds, mostly the sub-5 mn category, and is





 The Chennai office market recorded 6%(YoY) growth in transactions,a positive growth for the first

time since H1 2017.

 Supply crunch continues as office space completions recorded a 76% drop YoY in H1 2019.

 Weighted average rentals remainedsteady at a modest 3.5 % YoY growth across the market.

 Stable demand from Chennai occupiers has helped keep vacancy levels steady at 10.2% for H1 2019.

 The demand for co-working spaces in Chennai has significantly increased in the last one year and as of H1 2019, co-working holds a 24% share in the total transactions pie of Chennai office market as

compared to a mere 3% in H1 2018.

 Three of the top five transactions, in terms of transacted area in H1 2019, are by co-working players,

bringing to light the fact that these players are,at present, major drivers of office space absorption in


 Share of IT/ITeS sector’s office space consumption declined to 29% in H1 2019 after a brief recovery

in H2 2018 while BFSI sector accounted for only 2% of the office space transacted during the period.

Joseph Thilak, Senior Director – Occupier Solutions, Chennai, Knight Frank Indiasaid, “The Chennai

office market is showing definite signs of market stability. Transaction numbers have seen a positive

growth for the first time since H1 2017. Increased activity in the co-working industry has significantly

contributed to the growth of Chennai’s office market. However, inadequacy of quality supply continues  to remain the biggest challenge.”