Brigade Group, a Bengaluru-based listed real estate developer, expects to create around 15 million square feet of real estate in Chennai by FY27, with more than 80 percent of the launches in the residential market, according to Pradyumna Krishnakumar, its Executive Director.
He said that the business plans to develop around 4 million square feet of residential space and 1 million square feet of commercial space in the city over the next two years, with an investment of Rs 3,400 crore, including further investments agreed at the Global Investors Meet 2024 in Chennai. “This falls inside the 15 msf launch pipeline. We have already invested 25% of the funds, and the remainder will be disbursed gradually,” he said.
Krishnakumar stated that around 30% of the new projects in the pipeline for the next 3-4 fiscal years would be located in Chennai.
The business is now planning to establish a mixed development project of around 1 million square feet on Mount Road in the city with an investment of Rs 1,000 crore. The project will have two towers: one will be mostly residential, while the other will be offices with modest retail areas. “The final phases of approval are underway. This would be one of Chennai’s highest structures, with flats priced at more than Rs 3 crore,” Krishnakumar added.
In one of the major launches, the Group plans to spend more than Rs 2,000 crore on a 3.5 million square foot residential property in Sholinganallur’s IT area. Krishnakumar said that being one of the city’s key IT neighborhoods, the business anticipates significant demand for flats priced between Rs 1-2 crore.
Aside from these, the Group plans to create an office park in the southern area of Chennai with a development potential of less than 1 million square feet.
Chennai real estate is rebounding back.
Krishnakumar noted that following a significant downturn in 2012, the city’s real estate market has begun to recover.
According to Knight Frank India, Chennai experienced 14,920 new apartment sales in 2023, up 5% year on year, and 16,272 housing unit sales, up 6% from 2022.
In terms of office sales, the Chennai market recorded 10.8 msf in 2023, a whopping 92 percent increase over 2022.
Among the largest markets in 2023, rental levels in Mumbai, NCR, and Chennai have increased by 4%, 2%, and 6%, respectively.
“In terms of price, some micro-markets in Chennai have always been more expensive than other areas of Bengaluru. For example, if we launch flats in one of Chennai’s premier locations for Rs 10,000 per sq foot, a comparable launch in Bengaluru would sell for about Rs 8,000-8,500 per sq ft,” Krishnakumar said.
For the time being, the Group said that it would continue to be bullish in Bengaluru, Chennai, and Hyderabad, while prospects in Mumbai, NCR, and Pune remain under its radar.
