OMR Zone 1 and Mount Poonamalle attract office demand
Posted on: 23/Oct/2017 5:23:31 PM
The demand for prime office space in Chennai got concentrated along OMR Zone 1 and Mount Poonamalle Road in the 3rd quarter of 2017. Reports state that between July and September this year, the office market in Chennai was mainly focused in the newly furnished block at SEZ on MPH Road and a major development along OMR Zone.
This primary space occupancy is mainly due to pre-committed space along with occupier interest in SEZ space. IT or TES, eCommerce, etc. have surged the demand for office space in SEZ developments. In this quarter, the new supply that entered is furnishing of new blocks of SEZ on Mount Poonamallee Road.
There is lower vacancy levels with the three micro markets of Chennai including OMR Zone 1, Mount Poonamallee and Off CBD. Hence, the rental values have seen an uptick of the range 5 to 7 percent with the IT developments and OMR zone 1 and 6 to 8 percent along GST road and Mount Poonamallee Road.
There is one more trend being observed in the market where is now large scale space being available in the micro markets having large IT corporates, as they have chosen to make use of the available space in their own campus developments. Reports in the third quarter of 2017 say that in OMR Zone 2, the leasing has dwindled. Hence, in all the segments in annual basis, there is very strong rental momentum. On Mount Poonamallee Road, the demand has soared with surge in rental rates.
In long term, the outlook for Chennai office markets is very positive. A number of big developers have proposed Greenfield projects in Grade A commercial developments all of which are focused towards OMR Zone 1 and Mount Poonamallee Road. Each of these are at present in different stages of construction. The norm now is pre-commitments with office space. So, there are several corporates that look forward to making use the new project developments for making expansions in the near future.
There is also a likely strong demand from corporates for multiple facilities in the city for streamlining their operations. On completion of these projects, the demand will get realized, and leasing activities are likely in the city in the upcoming quarters.
