Chennai is the only city among the top six - the other five are Bengaluru, Hyderabad, Mumbai, Pune and NCR - that witnessed a dip in new office completions (Grade A) in 2024. In comparison, Mumbai saw the highest increase.
In 2024, Chennai saw a 57 per cent dip in new office constructions (Grade A) to 2.9 million sq ft. In comparison, in 2023, the city saw a 43 per cent increase and in 2022, the increase was 213 per cent, according to a US-based Vestian office market report for 2024.
In comparison, Hyderabad reported the highest new office completions of 14.5 million sq ft in 2024, closely followed by Bengaluru with 14 million sq ft.
Interestingly, Kolkata witnessed no new completions during 2024 as compared to over 10 lakh sq ft of supply in the previous year, says Vestian. The company’s service portfolio includes investment and consultancy, transaction advisory, retail business solutions and integrated facilities management services.
Shrinivas Rao, FRICS, CEO, Vestian, on reasons for dip in new office completion in Chennai said that supply of new office spaces is influenced by various factors, including the pipeline of under-construction projects, completion timelines, regulatory hurdles, natural calamities, raw material availability, supply chain disruptions, and overall market demand.
In 2024, Chennai recorded 2.9 million sq ft of new completions, marking a 57 per cent decline from the previous year and the lowest in the past three years. However, 2021 witnessed the lowest new completions of 1.5 million sq ft post-pandemic, he told businessline.
Echoing a similar view, Bharat M Jain, Director of the Chennai-based Arihant Foundations & Housing, said constructions of many commercial Grade A projects are going on in the city. Typically commercial buildings take 3-5 years to hit the market depending on the size and scale. Based on this timeline, we see that during Covid and its immediate aftermath (2020-2021) new projects were not launched, causing this lull in completed office space deliveries.
However, in 2025 and going forward a steady supply of Commercial Grade A office spaces will be seen ready to occupy, he said.