Chennai Real Estate Outlook: Driven by IT and Manufacturing Sectors

by Godrej Properties Limited

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Formerly known as Madras, Chennai is one of India's four metropolitan siblings, harmonising a rich cultural heritage with a contemporary lifestyle. The affordability of land here is a major appealing factor for investors and homebuyers, particularly in North Chennai, where land prices are comparatively lower, offering a cost-effective choice for real estate projects. Moreover, the ongoing expansion of the IT-ITeS and manufacturing sectors is sure to drive the next phase of growth in the Chennai real estate market. 

Influence of IT industry on Chennai real estate 

  • The comeback of offline work for major IT companies and the gradual return of retailers to physical stores are propelling growth in the commercial property for sale in Chennai.
  • E-commerce firms are also expanding warehousing, while the SaaS sector and the growing auto industry contribute significantly to residential demand in and around Chennai.
  • The Tamil Nadu State Government's efforts to attract investments in IT, ITeS, SaaS, startups, and MSMEs have positively impacted residential real estate demand. It led to a rise in apartments for sale in Chennai, especially in the city's southern suburban areas.

Influence of the Manufacturing Industry on Chennai Real Estate 

  • The western properties in Chennai are witnessing a surge in demand due to upcoming investments and continued auto industry expansion, with projects like Radiance Icon at Koyambedu already underway.
  • Chennai serves as the hub for approximately 40% of India's automobile industry and 45% of the auto components industry.
  • The city hosts a multitude of automotive companies, including Royal Enfield, Hyundai, Renault, Robert Bosch, Nissan Motors, Ashok Leyland, Yamaha Motor, Daimler AG, Caterpillar Inc., Komatsu Limited, BharatBenz, Ford, BMW, Citroën, and Mitsubishi, each with manufacturing plants. The house for sale in Chennai around these companies are in high demand and have the potential for appreciation.
  • This concentration of diverse industries not only creates numerous job opportunities but also establishes Chennai real estate as a prominent factor in national and global manufacturing sectors.
  • The Ambattur–Padi industrial zone accommodates textile manufacturers. In contrast, a dedicated special economic zone (SEZ) for apparel and footwear manufacturing in the southern suburbs positively influences the commercial real estate market.

The Final Word

Chennai blends cultural richness with modern living, attracting investors with affordable land, notably in North Chennai. The city's real estate growth depends on the expanding IT-ITeS and manufacturing sectors. Commercially, the return to physical stores and e-commerce warehousing are significant. In residential demand, the SaaS sector, auto industry, and government efforts drive growth, with southern suburban areas witnessing a rise in apartments. The western parts of Chennai, central to 40% of India's auto industry, experience increased demand in the housing market. 

 

Frequently Asked Questions

1. What are some factors that make Chennai suitable for real estate investment?

Ans: Chennai's appeal lies in its harmonious blend of cultural heritage and modern lifestyle, with affordable land, particularly in North Chennai, making it a cost-effective choice for real estate projects.

2. What is the price range for houses in Chennai?

Ans: The construction cost in Chennai ranges from Rs 1450 to Rs 4500 per sq. ft. However, specific localities in Chennai have varying costs, depending on the presence of the IT and manufacturing industry.

 

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