Residential launches witness a comeback in Chennai in H1 2018: Knight Frank India
Chennai, July25, 2018: Knight Frank India today launched the ninth edition of its flagship half yearly report – India Real Estate. It presents a comprehensive analysis of the residential and office market performance of Chennai for the period January– June 2018(H1 2018).
Office Takeaways:
- Inadequate supply continues to limit transaction numbers; Chennai saw just 0.42 mnsq m (4.5 mnsq ft) of supply since H1 2015 compared to the 1.4 mnsq m (14.6 mnsq ft) of transaction volume
- Transaction levels experience 9% YoY dropcompared to the healthy 10% growth in supply
- Average rentals grow by 4.5% yoy; growth was strong across business districts with SBD locations such as Perungudi, Guindy and Taramani continue to witness above-average rental growth.
- Vacancy level hovers around 11% over past 12 months; occupier demand continually outstrips supply
- Other Services sector gains significantly; share of IT/ITeS sector continues to weaken
Residential Takeaways:
- Comeback of residential launches with 8% annual upswing; 6,520 units launched in H1 2018 were the highest number of launches in a single period in the past 3 years; significant increase in launches due to right-sizing and right-pricing in under INR 5 mn ticket size
- Prices decline by 4% YoY as developers dole out aggressive discounts to lighten inventory load
- Sales recover from H2 2017 lows and end H1 2018 at 3% lower than year ago; marketing campaigns highlighting RERA compliancy, PMAY eligibility and Completion Certificate help developers regain buyers’ trust
- With a Project Life Cycle of lessthan 6 years, QTS (Quarters-to-Sell) continues to hover around6 quarters in H1 2018. Innovative marketing and aggressive discounts on priceshelp stem the decline in sales
Speaking about the findings,Kanchana Krishnan, Director – Chennai said,“The Chennai office market that has beenreeling under an acutesupply crunch over thepast 3 years has seen some respite in H1 2018 with the supply scenario easing somewhat with 10% growth in new completions.The paucity of quality office spacealsoled to a strong rental growth.
The residential real estate market, on the other hand,has begun on a positive note as H1 2018 shows the promise of a potential recovery in residential market volumes. H1 2018 saw the highest number of units launched in a single period during the past three years and the persistent drop in sales was largely muted as well, compared to the preceding period.”
About Knight Frank:
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank has more than 15,000 people operating from 418 offices across 60 markets. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit www.knightfrank.com.
In India, Knight Frank is headquartered in Mumbai and has more than 1,000 experts across Bangalore, Delhi, Pune, Hyderabad, Chennai, Kolkata and Ahmedabad. Backed by strong research and analytics, our experts offer a comprehensive range of real estate services across advisory, valuation and consulting, transactions (residential, commercial, retail, hospitality, land & capitals), facilities management and project management. For more information, visit www.knightfrank.co.in.