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Home , Irungattukottai, Oragadam

M A R K E T B E AT Industrial H2 2020

South west remains a key warehousing hub; proposed industrial park to drive future demand Chennai’s logistics and warehousing market witnessed an uptrend in H2 2020, recording 2.0 msf of space take up in this period (a 59% rise compared to the H1 2020). Several transactions which were in the last leg of discussion prior to the lockdown have concluded in H2. (37%) and INR 70 AVERAGE LAND RATE IN (17%) in South-West Chennai have witnessed maximum traction with demand coming from manufacturing majors such as Vikram Solar, Wheels , TM Mn/acre Seating and Amara Raja batteries etc., and 3PL, e-commerce majors such as Mahindra Logistics, Reliance Groceries and Big Basket. During H2, Greenbase, a joint venture between Hiranandani Group and Blackstone has entered into an agreement with the state government to invest INR 750 Cr. to develop a 115 acre (2.8 msf built-up area) industrial & logistics park at Oragadam. Vestas India has already signed a deal with the proposed development for Y-O-Y GROWTH IN WAREHOUSING RENT 4% a warehouse and a wind-turbine park. Meanwhile, SIPCOT has also proposed to develop another Industrial Park at Vallam Vadagal (over 325 acres) to meet IN - ORAGADAM the growing demand for industrial land.

SPACE LEASED BY MAGIC Manufacturing and warehousing rentals declined in select submarkets 0.28msf WOODS E-commerce majors such as Amazon, Big Basket, Reliance Groceries preferred submarkets such as Irungattukottai and Periyapalayam Road while large manufacturers closed transactions in , Sriperumbudur-Oragadam and Irungattukottai. Manufacturing rents in select micro-markets such as Manali and Mannur have corrected by 5-8% over the last 6 months with growing competition among landlords/developers and availability of multiple space options. Similarly, warehousing rents have also corrected by about 4-8% in and Manali submarkets in H2 2020. However, growing demand (due to its proximity to the city and presence of quality space) and limited availability has sustained warehousing rentals in Sriperumbudur-Oragadam. Locations in the North (Redhills - Tamaraipakkam stretch, Orakkadu) and South-West (Oragadam, Mannur) will continue to attract demand going forward and with shortage of quality space options and limited supply, we could expect rental growth over the next 6-12 months. Land prices have largely remained ECONOMIC INDICATORS Q4 2020 stable across most markets over the last 6 months, however, witnessed a rise of 13% on a h-o-h basis due to increased demand from the Data centre sector. Oragadam and Mannur witnessed higher investor demand and growing competition from other asset classes for land parcels have steadily 2021 2019 2020 pushed land prices upwards by 4% over the year. Forecast Government initiatives to facilitate industrial momentum GDP Growth 4.2% -7.5% 8.8% Several initiatives have been taken by the state government to support and develop the industrial sector amidst the prevailing economic uncertainty. Proposals such as setting up of industrial parks and industrial townships and credit guarantee scheme for small-scale industries, investment in a greenfield CPI Growth 3.4% 6.1% 4.5% bulk drug pharma park are under consideration. The government is working on a new industrial policy with a focus on expediting growth in the southern part of the state and bringing more investments into the Chennai-Kanyakumari Industrial Corridor. A special incentive package for the manufacturing of essential Consumer medical equipment and drugs has also been announced. Recently, the state government has also signed several MOUs with companies such as Torrent 5.0% -8.5% 7.2% Spending Gas, First Solar, Voltas, etc. which are looking to establish / expand their manufacturing base in the vicinity of Chennai. Adani Group has also announced plans to invest INR 2,300 crore in a data centre in , towards the south-eastern part of Chennai. Govt. Final Expenditure 13.20% 5.70% 10.50% INDUSTRIAL RENT / Y-O-Y GROWTH WAREHOUSING RENT / Y-O-Y GROWTH Growth 30 10% 30 10% 25 5% 25 5% Source: Oxford Economics, RBI, IMF 20 0% 20 0% 15 -5% 15 -5% 10 -10% 10 -10% 5 -15% 5 -15% 0 -20% 0 -20%

INDUSTRIAL RENT (H2 2020) INDUSTRIAL RENT Y-o-Y GROWTH WAREHOUSING RENT (H2 2020) WAREHOUSING RENT Y-o-Y GROWTH M A R K E T B E AT CHENNAI Industrial H2 2020

LAND RATES – DECEMBER 2020 INR US$ EURO Y-O-Y SUBMARKET MN/ACRE MN/ACRE MN/ACRE Change Ambattur 180 2.45 2.05 13% Poonamallee 95 1.29 1.08 -5% Sriperumbudur – Oragadam 25 0.34 0.29 4% Irungattukottai 25 0.34 0.29 0% Madhavaram 70 0.95 0.80 0% 13 0.17 0.14 0% Periyapalayam road 16 0.22 0.18 0% Manali 35 0.48 0.40 0% Mannur 14 0.18 0.15 4% Maraimalai Nagar 45 0.61 0.51 0%

Percentage growth are in local currency; Y-O-Y – Year on Year Conversion Rate: US$1= INR 73.50 and Euro 1 = INR 87.60 Rohan Sharma Director, Research Services +91 124 4695555 /[email protected] SIGNIFICANT TRANSACTIONS H2 2020 Kapil Kanala Buyer/Lessee Seller/Lessor Type Submarket Area (sf) Senior Associate Director, Research Services Magic Woods Prime One Warehouse Maraimalai Nagar 2,75,000 +91 40 40405555 /[email protected]

Mahindra Logistics NDR Warehouse Irungattukottai 2,00,000 cushmanwakefield.com

Reliance Groceries Preethi Warehouse Kuthambakkam 2,00,000

Vikram Solar Indospace Park 1 Warehouse Oragadam 1,80,000 A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is KEY SALES TRANSACTIONS H2 2020 among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 Buyer/Lessee Seller/Lessor Type Submarket Area countries. In 2019, the firm had revenue of $8.8 billion across core services of property, facilities and project Prestige Individual Land Poonamallee 6.5 Acre management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.

©2020 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.