Boom in office space, a boon for local economy
The development is indicative of the emergence of new job opportunities and the larger impact on the local economy, pushing housing sales, creation of auxiliary jobs, and springing up of new hospitality ventures in the corporate corridors, according to experts.
A report by real estate consultant Colliers India says the city recorded 5.5 mn sq ft of leasing during Jan-June period of the current year, soaring by 57% over the corresponding months last year at 3.5 mn sq ft (H1 CY2024).
It is the second largest absorption on par with the National Capital Region (NCR) and higher than Hyderabad and Mumbai. "Demand for Grade A office space in the city has been on the rise in the last few years," says Vimal Nadar, national director and head of research, Colliers India.
Ramkumar Ramamoorthy, former CMD, Cognizant India, said the development will have ripple effects. "Each high-value job created by new-age companies, in tech and related services, creates between 3 and 7 downstream jobs, enhances per capita income, and drives higher tax collection.
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
Dementia Has Been Linked To a Common Habit. Do You Do It?
Memory Health
Learn More
Undo
Growth in high-value jobs drives higher levels of consumption, local entrepreneurship and economic growth."
You Can Also Check:
Chennai AQI
|
Weather in Chennai
|
Bank Holidays in Chennai
|
Public Holidays in Chennai
Ramamoorthy earlier oversaw an employee base spread over 24 mn sq ft across India. He says Chennai is attracting Fortune 500 and Global 2,000 companies including the likes of Mizuho, Bank of America, Workday, AstraZeneca, Hitachi and Shell for whom innovation at scale is important. "In addition to smaller floor space absorption, we see individual firms locking down upwards of a million sq ft of office space in newer technology parks," he said.
Rajaram Venkataraman, convener & head, FICCI Tamil Nadu Technology Panel and Strategic Advisor - Kritilabs says, a significant number of jobs created through the 5.5 mn sq ft leasing will be in GCC operations and IT services. "Each IT/ITES job generates 4.5-6.5 auxiliary jobs across sectors including facility management and security, food services and catering, transportation and logistics. Hospitality will see an expansion with 3-4 star hotels expected in key corridors.
Commercial real estate comprising retail and F&B space development will see an uptick," he added.
The city's IT corridor, OMR and its offshoot, Radial Road (Pallavaram–Thoraipakkam Road) mirrored this growth with expanding new IT parks attracting residential, commercial and hospitality developments. The trickle from OMR and Radial Road will spread to emerging office space destinations such as Tambaram-Vandalur, Porur-Poonamallee, Ambattur-Avadi and Madhavaram belt in north Chennai, where the TN Tech City has been proposed.
Knight Frank India says 5.1 million sq ft of office space translates to around 34,000 seats considering 150 sq ft per seat, which is optimal for most tech, professional, and hybrid workplaces. In the past five years (between 2020 and H1 2025), the city added more than 19.2 mn sq ft of office space and total office stock currently stood at 92 mn sq ft.
Joseph Thilak, national director, occupier strategy and solutions (Hyderabad & Chennai), Knight Frank India said, "There is a correlation between office absorption and residential housing demand, in markets like Chennai with strong IT/ITES and GCC presence.
As firms expand, job creation drives migration and housing demand—in areas close to employment hubs. While a specific job-to-housing unit ratio varies by income segment and city, in Chennai, the continued strength in office absorption is mirrored by steady growth in residential sales, particularly in south and west zones, where most commercial activity is concentrated.
"
Property consultant Anarock says Chennai was the only city with a significant quarter-on-quarter (QoQ) increase in housing unit sales by 40%.
It had a sale of 5,660 units in Q2 (April-June) period against 4,050 units Q1 (Jan-March) even as most of the other metros, except for NCR, either saw a QoQ dip or marginal rise in their respective home sales. With the city's office space stock is all set to reach 100 mn sq ft in the next few years, urban development experts are stressing on planned infrastructure growth and ensuring quality of living.
Former professor of urban engineering at Anna University K P Subramanian says, the Chennai Metropolitan Development Authority (CMDA) may have to be proactive in this regard. "Sensing development trends, CMDA may assess demand for offices at potential locations, prepare integrated projects with a holistic approach, and execute them."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
44 minutes ago
- Time of India
Muted Q1 earnings point to weakening micro: Is the easy money phase over?
We are now exactly at the halfway mark of the earnings season. Among BSE 500 companies, nearly 50% have declared their results for the June quarter. So far, the earnings trend has been underwhelming — far from anything to write home about. Of course, no one expected blockbuster results this quarter. Even on that muted backdrop, the reported numbers have largely disappointed. Given the election-related disruptions in the base quarter last year, many had expected a natural tailwind from the low base effect to support growth this quarter. Explore courses from Top Institutes in Please select course: Select a Course Category healthcare Public Policy Management Data Science Leadership Digital Marketing Product Management CXO others Degree Design Thinking Operations Management Others Technology MBA Cybersecurity MCA Project Management Finance PGDM Healthcare Data Analytics Data Science Artificial Intelligence Skills you'll gain: Duration: 11 Months IIM Lucknow CERT-IIML Healthcare Management India Starts on undefined Get Details by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like No annual fees for life UnionBank Credit Card Apply Now Undo Instead, we're seeing several companies struggle to post even modest growth. This implies that the current softness may not be a one-off. If it's not just a passing blip, are we staring at a deeper growth challenge for the economy in the medium term? To better understand the underlying trends, it's useful to look at key takeaways from the management commentaries of some prominent companies that have reported earnings so far. Let's start with banking The surprise here isn't muted credit growth — that has been subdued for a few quarters now. There was no respite from that trend this quarter either, despite a recovery in overall sentiment. In fact, credit growth has fallen further over the past three months. Live Events From hovering around mid-teen levels in Q4 FY24, credit growth has sharply declined to single digits in this quarter, after staying in the low teens for the past three quarters. However, the bigger negative surprise came from commentary around the unsecured segment — particularly from the management of leading NBFCs and banks. Managements have raised red flags over the unsecured loan book in MSME and business loan segments. They are pointing to over-leveraged customers (loans from multiple banks), which could hit credit quality and severely impact growth in the coming months. This signals growing stress in the MSME segment, which could significantly constrain growth if the pressure continues. Deteriorating asset quality and rising slippages in MSME retail loans across banks support this concern. Combined with continued stress in the microfinance segment and a general credit slowdown, the prospects of a sharp economic rebound look dim. For banks, pressure on Net Interest Margins (NIMs) couldn't have come at a worse time. With successive rate cuts, lending rates have declined, while deposit rates lag behind — squeezing NIMs in the short term. This pressure is emerging just when growth is scarce and credit costs are rising (due to higher provisions), severely impacting profitability for many banks. Not to forget, banking stocks were the consensus buy at the beginning of the quarter — seen as undervalued plays amid the market's sharp recovery from March lows. Unfortunately, earnings told a different story. The wait for a much-anticipated rerating in banking stocks only gets longer. Circling back to asset quality in retail, further evidence of stress is visible in the credit card segment. While the slowdown in new credit card additions is well known, growing delinquencies have not received as much attention. Based on the Portfolio at Risk (PAR) metric, long-term delinquencies (PAR over 90 days) have surged to 15%, indicating rising repayment pressure among overdue accounts. Turning to IT — another sector with equally disappointing earnings. Bellwether companies reported sequential declines in both revenue and profitability. With muted guidance from major players, we are looking at another year of low single-digit dollar revenue growth. But that's only part of the story. While revenues may inch up, the real pain lies in job losses triggered by productivity gains from the AI push. If TCS's recent 2% layoff announcement is followed by others in the industry, the second-order effects on broader economic activity could be ominous. Coming at a time when MSMEs are already under stress — as echoed in banks' commentary — the medium-term growth outlook is looking increasingly fragile. That said, the economy does have some bright spots. There are no complaints about the agriculture sector's growth prospects, given the robust monsoon outlook this year. While this alone cannot offset the potential slowdown in consumption, it can offer some relief — especially if backed by sustained government capital expenditure (capex), which remains critical given the weakness in private capex. Government capex had been a strong driver until FY24, but last year exposed its limitations. Capacity constraints in traditional infrastructure segments like roads, railways, and general infra have started to impact execution. In response, the government is exploring new areas — such as urban water infrastructure (including wastewater treatment) and shipbuilding — to accelerate capex. If successful, these efforts could significantly improve the economic outlook. For investors, these are not easy times to navigate While benign macro conditions are helping prevent sharp market corrections, weakening micro fundamentals may keep markets in check and delay the breakout many are hoping for. In such an environment, investors must adopt a stock-specific approach — seeking bottom-up opportunities. The era of easy money appears to be behind us. Going forward, spotting the next winners will depend more on skill than luck. (The author, ArunaGiri N is the Founder CEO & Fund Manager at TrustLine Holdings)
Time of India
an hour ago
- Time of India
Is Bharat outpacing India in mutual fund growth?
In Agra, Shalab Bibhab was born into an illustrious family with a nine-decade legacy in real estate and education. His career began as an equity research analyst in Mumbai. However, he was called back to join his family business in Agra. In 2019, he started his own venture, motivated by the desire to secure his special child's financial future, particularly in light of her medical expenses. Today, he manages ₹1,650 crore in assets under management (AUM) in mutual funds . When he began, Agra was classified as a B-30 city, but it has since transitioned to a T-30, despite being a Tier-2 location. Shalab's story is no longer an anomaly; it's emblematic of a quiet transformation brewing in India's smaller towns and cities. Explore courses from Top Institutes in Please select course: Select a Course Category Project Management Technology Data Science healthcare Operations Management MBA Cybersecurity Digital Marketing Artificial Intelligence Data Analytics Product Management Design Thinking Data Science Healthcare CXO PGDM Public Policy Others Management Finance Leadership others Degree MCA Skills you'll gain: Project Planning & Governance Agile Software Development Practices Project Management Tools & Software Techniques Scrum Framework Duration: 12 Weeks Indian School of Business Certificate Programme in IT Project Management Starts on Jun 20, 2024 Get Details Skills you'll gain: Portfolio Management Project Planning & Risk Analysis Strategic Project/Portfolio Selection Adaptive & Agile Project Management Duration: 6 Months IIT Delhi Certificate Programme in Project Management Starts on May 30, 2024 Get Details Cities beyond the top 30 (B-30) are rewriting India's mutual fund narrative. Once considered passive spectators in financial markets, these regions are now emerging as active participants, driving a significant shift in the industry. Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Discover the AI writing partner that understands your audience. Grammarly Install Now In FY25, over 55% of all new SIP registrations came from B-30 locations—up from 48% just two years ago. These cities have added over 2.34 crore new SIP accounts, with a notable rise in direct plan investments, signaling growing financial confidence and awareness. The share of B-30 assets under management (AUM) in the mutual fund industry has risen from 16% in December 2020 to 18% in March 2025. What's even more striking is the composition of these investments: over 80% of B-30 AUM is allocated to equity funds, compared to just 52% in the top 30 cities (T-30). Live Events Factors driving growth in smaller cities Digital enablement: The proliferation of low-cost smartphones, Aadhaar-based eKYC, and UPI payments has made it incredibly easy to start an SIP—even in remote areas. Internet penetration has skyrocketed, with broadband connections growing by an astounding 1,452% between 2014 and 2024, according to the Ministry of Communications. Financial education: Campaigns like "Mutual Funds Sahi Hai" have resonated deeply in smaller towns, where trust and clarity are paramount. Fund houses and the Association of Mutual Funds in India (AMFI) have stepped up efforts to demystify mutual funds, making them accessible to first-time investors. According to AMFI, the mutual fund industry's overall net AUM has reached an all-time high of ₹74.41 lakh crore. Mindset shift: Sebi's decision to allow SIPs with investments as low as ₹250 has lowered the entry barrier, especially for young and first-time investors. The aspirations of Bharat are aligning with those of urban India. Whether it's planning for children's education, buying a home, or building a retirement corpus, SIPs offer a structured, low-risk route to achieve long-term goals. There's a noticeable shift away from traditional investments. Mutual funds, particularly equity funds, are increasingly seen as viable alternatives for wealth creation. Systematic Investment Plans (SIPs) have become the entry point for millions of first-time investors, thanks to their disciplined, flexible, and accessible structure. In June 2025 alone, net inflows into equity mutual funds rose 24% month-on-month to ₹23,568 crore, according to AMFI data. Overall mutual fund inflows surged 67% month-on-month to ₹49,301 crore. What's even more exciting is the demographic shift—a majority of new SIP accounts are now being opened outside the top 30 cities. Persistency rates in SIPs from B-30 cities have also improved, suggesting that investors from these regions are not just participating—they are staying invested. This is a critical indicator of financial maturity and long-term wealth-building intent. Opportunities and challenges The mutual fund industry in India is still in its nascent stages compared to developed markets. India's mutual fund AUM-to-GDP ratio is 19.9% as of March 2025, significantly lower than that of many developed economies. This gap underscores the immense growth potential. For B-30 cities, the opportunity is even more pronounced. With rising incomes, improving financial literacy , and increasing digital penetration, the next wave of mutual fund investors will likely come from these regions. However, challenges remain. Despite the progress, financial literacy levels in smaller towns are still lower than in metros. Misinformation and a lack of trust in financial products can deter potential investors. Additionally, while digital infrastructure has improved, tech challenges like inconsistent internet connectivity in remote areas can hinder seamless participation. The road ahead From 2020 to 2025, mutual fund AUM from B-30 cities has grown at a compound annual growth rate (CAGR) of over 24%, with equity-specific AUM growing even faster. The trend is clear: Bharat is no longer just consuming financial knowledge—it is applying it with intent. The outlook for the mutual fund industry remains robust. Equity funds are expected to continue dominating inflows, driven by India's long-term growth story. Debt funds and ETFs are also gaining traction, offering diversification options to investors. For mutual fund companies, the focus must now shift to deepening engagement in B-30 cities. This includes tailored financial products, localized investor education programs, and leveraging technology to enhance accessibility. India's mutual fund future is being shaped in smaller towns, not just skyscraper cities. The cities and towns once seen as peripheral are now setting the pace. For mutual fund companies, this is the moment to nurture, support, and deepen this shift—because the next 100 million investors will likely come not from the metros, but from the heart of India. As Shalab aptly demonstrated, the aspirations of Bharat are no different from those of urban India. What's changing is the access, awareness, and confidence to act on those aspirations.
Time of India
an hour ago
- Time of India
Mahindra to pursue engineering actions to address rare earth magnet shortage issue: Group CFO
Mahindra & Mahindra plans to manage rare earth magnet supplies through alternative sourcing channels for the next nine months and will pursue 'engineering efforts' to address the raw material shortage situation amid growing product portfolio, according to a senior company executive. The imposition of export restrictions by China on key rare earth magnets has resulted in supply chain bottlenecks, impacting the user industries, including the auto and electronics sectors. Explore courses from Top Institutes in Please select course: Select a Course Category Digital Marketing PGDM Operations Management MBA CXO Cybersecurity Healthcare Artificial Intelligence Others Project Management Degree Data Science Data Science Public Policy others Management Design Thinking Finance MCA Product Management Technology Data Analytics Leadership healthcare Skills you'll gain: Digital Marketing Strategy Search Engine Optimization (SEO) & Content Marketing Social Media Marketing & Advertising Data Analytics & Measurement Duration: 24 Weeks Indian School of Business Professional Certificate Programme in Digital Marketing Starts on Jun 26, 2024 Get Details Skills you'll gain: Digital Marketing Strategies Customer Journey Mapping Paid Advertising Campaign Management Emerging Technologies in Digital Marketing Duration: 12 Weeks Indian School of Business Digital Marketing and Analytics Starts on May 14, 2024 Get Details The magnets are essential components across sectors like automobiles, household appliances, and renewable energy. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Buy Resmed AirSense 11 with flat 20% off ResMed Buy Now Undo "Basis, all the actions we have taken, FY26 is more or less managed. We have to now work on some medium and long term actions," Mahindra & Mahindra (M&M) Group Chief Financial Officer Amarjyoti Barua told PTI in an interaction. The company has taken steps to build inventory through alternative sources to take care of the problem, he stated. Live Events "It has panned out well for us so far and we do not foresee any major risk for the next nine months," Barua said. "But considering the growth plans we have, we have to think about a much bigger play than what the tactical plays we have done, and that is going to require a lot more engineering effort," he added. The company's engineers are working on various solutions to work out a solution, Barua said. Last week, Maruti Suzuki stated that its engineers are working to mitigate the rare earth magnet shortage issue, noting that there has been no impact on its production so far. Hyundai Motor India has also stated that it is not facing any production issues due to the shortage of rare earth magnets. In June, rating agency Icra had stated that inventories of rare-earth magnets used in critical automotive components, particularly electric vehicle (EV) traction motors and power steering systems, could run dry by mid-July this year. Crisil, another rating agency, had also flagged it as a significant risk to automotive supply chains. The magnets in question, neodymium-iron-boron, are known for their strength and efficiency, used for high-performance automotive applications such as traction motors in electric vehicles and power steering in both electric vehicles and internal combustion engine vehicles.
