Bengaluru-based listed real estate developer Brigade Group plans to develop about 15 million square feet of real estate in Chennai by FY27, with more than 80 percent launches in the residential space, Pradyumna Krishnakumar, its Executive Director, told Moneycontrol.
He added that within the next two years, the company will add about 4 msf of residential space and 1 msf of commercial space in the city with an investment of Rs 3,400 crore, including additional investments, which was recently signed up at the Global Investors Meet 2024 in Chennai. "This is within the 15 msf launch pipeline. We have already invested 25 percent of the amount, and the rest will be released slowly," he said.
In the new project pipeline within the next 3-4 financial years, Krishnakumar added that about 30 percent of the projects will be in Chennai.
Currently, the company is looking forward to launching about 1 msf of mixed development project at Mount Road in the city with an investment of Rs 1,000 crore. The project will have two towers – one will be primarily residential and the other will have offices with smaller retail spaces. "The final stages of approval are ongoing. This will be among the tallest towers in Chennai, and the ticket sizes for the apartments will be upwards of Rs 3 crore," Krishnakumar said.
In one of the other launches, the Group is looking at a 3.5 msf residential development in the IT belt of Sholinganallur, with an investment of over Rs 2,000 crore. Krishnakumar said being one of the prime IT areas in the city, the company is expecting high demand for apartments that will be priced at Rs 1-2 crore.
Other than these, the Group is also looking forward to developing an office park in the southern part of Chennai with a development potential of less than 1 msf.
Chennai real estate bouncing back
Krishnakumar added that after a major slowdown in 2012, the real estate across all segments has started to pick up in the city.
According to Knight Frank India, in 2023, Chennai saw 14,920 new apartment sales, up by 5 percent YoY and 16,272 housing unit sales, 6 percent more than in 2022.
In terms of office transactions, the Chennai market saw 10.8 msf of office transactions in 2023, a staggering 92 percent growth from 2022.
Among the larger markets in 2023, rental levels in Mumbai, NCR and Chennai have grown at 4 percent, 2 percent and 6 percent, respectively.
"In terms of pricing, certain micro-markets in Chennai have always been premium to some pockets of Bengaluru. For example, if we launch apartments in one of the prime areas in Chennai for Rs 10,000 per sq foot, the similar launch in Bengaluru will be sold for about Rs 8,000-8,500 sq ft," Krishnakumar said.
For now, the Group added that the company will continue to be bullish in Bengaluru, Chennai, and Hyderabad while opportunities in places like Mumbai, NCR, and Pune continue to be under its radar.
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