A significant reduction in new launches of residential projects has pushed the sale of unsold inventory in Chennai.
The city witnessed a 36 per cent drop in residential launches to 5,815 units in the first six months of 2016. “However, this excessive reduction in supply, compared to the sales levels, has also caused the unsold inventory level to fall to a four-year low, at 33,862 units,” said, Kanchana Krishnan, Director, Knight Frank, Chennai, while highlighting the trends in the real estate market.
For the second half of this year, Knight Frank has estimated that there would be 5,350 units in terms of supply. It has said that sales levels will recover from the current lows and reach approximately 8,900 units during the same period.
“Going forward, we believe that the steady demand and reducing unsold inventory will encourage developers to increase supply in residential segment,” Ms. Krishnan added.
She said even on the office space front, there was no project that could offer new companies huge space at one single site. “Chennai office space market has seen a 9 per cent year-on-year drop in absorption numbers during the first half of 2016. Dearth of good-quality, large-format office spaces has caused IT/ITes companies to postpone their leasing decisions.”
However, with the launch of new projects in the recent past along Rajiv Gandhi Salai and Pallavaram- Thoraipakkam Radial Road, the city can offer as large as one million square feet of office space in two years. She said Chennai was adding about 5 million square feet every year, while it was about 12 million square feet a year in Bengaluru.
