M A R K E T B E AT CHENNAI Residential Q4 2020 Surge in quarterly launches signifying a healthy recovery Chennai residential market has witnessed a supply of more than 4,000 units in Q4, a 3X rise as compared to the previous quarter, driven by healthy end-user demand and resumption of economic activities. On an annual basis, new launches in Q4 were higher by about 60%, an indication of the UNIT LAUNCHES (Q4 2020) pent-up demand, a steady growth in enquiries since the relaxation of lockdown in Q3 besides strong market fundamentals. Mogappair, Vanagaram, 4,228 Nerkundram that are prominent for mid to high segment housing within close proximity to the CBD have accounted for a major share of 44% of new launches during the quarter. Prime residential catchments in the vicinity of IT corridors such as Sholinganallur and Thiruporur in the Suburban South I SHARE OF SUBURBAN WEST IN sub-market have also witnessed several new project announcements totalling to about 1600+ units. Some of the key launches include projects by 44% NEW LAUNCHES (Q4 2020) prominent developers such as Casagrand FirstCity, Casagrand Millenia, Casagrand Athens, Prestige Windsor Park, and Ashiana Shubham Phase IV- A, Marutham Neptune, etc. Despite the pandemic induced uncertainty for the last 2-3 quarters, the residential market in Chennai has remained resilient and new launches for CY 2020 (9,000+ units) were in fact were marginally higher (2%) on an annual basis. We expect the recovery to SHARE OF UNITS LAUNCHED IN continue at a steady pace over the next 2-3 quarters and new launches could go up by about 10-15% in 2021. 76% MID-END SEGMENT (Q4 2020) Mid segment dominated new launches; developers focusing on better amenities to attract buyers Mid segment accounted for 76% of the total launches in Q4 and developers have targeted areas such as Sholinganallur, Pallikaranai which are populated largely by the tech workforce scattered along the OMR. The share of mid-segment in new launches has been growing steadily for the last 2- 3 years. Nearly 70% of all units launched this year fall under mid-segment category and the number of units launched are 57% higher as compared to MARKET INDICATORS OVERALL Q4 2020 2019 numbers for the segment. High-end segment followed suit with a share of 17% of the total launches this quarter. Developers are introducing new design elements such as play areas, child centric / sports and wellness themed spaces, dedicated workspaces, senior living units, lifestyle and kid- friendly facilities that appeal to changing buyer sentiments amidst the pandemic. Some examples include recent projects by Casagrand, Arun Excello Y-O-Y 12-Months Change Forecast and Ashiana Housing etc. Like other cities, average unit sizes haven’t increased amidst the pandemic and are expected to remain largely similar going forward. New Launches Price incentives and ready to occupy properties generated sales momentum Rents and capital values have remained stable across all the submarkets on a quarterly basis. Conversion rates have increased in Q4 across all Units Sold categories and submarkets as compared to Q3 and ready to move-in / close to completion projects have found more takers. Developers have continued most of their offers and discounts announced earlier and transactions are closing at average of 3-6% lower than the pre-COVID prices though quoted rates have remained largely range-bound. Developers have also announced additional discounts during the festive season to ramp up Average Capital sales. For example, Casagrand which has been actively providing various offers to its customers since the pandemic has lowered prices by 5-10% Values (INR/sf) across some of its projects for a few days. Besides the mid-end category, which is gradually recovering since Q3, high-end and luxury segments have also witnessed a recovery in enquiries and sales as buyers at the top-end are looking to leverage current market conditions. We expect the recovery to gain pace in H1 2021 and momentum is likely to strengthen further in H2. SIGNIFICANT PROJECTS LAUNCHED IN Q4 2020 BUILDING LOCATION DEVELOPER UNITS LAUNCHED RATE*(INR/SF) Casagrand FirstCity Sholinganallur Casagrand Builder Pvt. Ltd. 1,693 4,099 - 4,299 Prestige Windsor Park Vanagaram Prestige Group 637 5,700 M A R K E T B E AT CHENNAI Residential Q4 2020 RENTAL VALUES AS OF Q4 2020 CAPITAL VALUES AS OF Q4 2020 AVERAGE QUOTED QoQ CHANGE YoY SHORT TERM AVERAGE QUOTED QoQ CHANGE YoY SHORT TERM SUBMARKET SUBMARKET RENT (INR/MONTH) (%) (%) OUTLOOK RATE (INR/SF) (%) (%) OUTLOOK High-end segment High-end segment Central 100,000-250,000 0% 0% Central 23,000-27,000 0% 0% Off Central - I 90,000-150,000 0% 0% Off Central - I 18,000-23,000 0% 0% Off Central - II 50,000-130,000 0% 0% Off Central - II 12,000-17,500 0% 0% East Coast Road 90,000-2,48,000 0% -3% East Coast Road 6,000-9,500 0% 0% Mid segment Mid segment Central 50,000-75,000 0% 0% Central 14,000-18,000 0% 0% Off Central- I 45,000-80,000 0% 0% Off Central- I 15,000-18,000 0% 0% Off Central- II 25,000-50,000 0% 0% Off Central -II 8,400-10,000 0% -1% Suburban South - I 5,000-7,400 0% -1% Suburban South - I 21,000-31,000 0% -4% Suburban South - II 4,000-7,400 0% -1% Suburban South - II 14,000-24,500 0% -4% Suburban North 4,200-6,950 0% 0% Suburban West 4,400-8,000 0% 0% East Coast Road 4,500-6,500 0% 0% SIGNIFICANT CONSTRUCTION COMPLETIONS IN Q4 2020 BUILDING LOCATION DEVELOPER UNITS LAUNCHED UNIT SIZE(SF) DRA 90 degrees Pallavaram-Thoraipakkam Road DRA Homes 111 965-1,506 Rohan Sharma Altis Ashraya Mangadu Altis Properties 578 832-1,394 Director, Research Services +91 124 4695555 /[email protected] SIGNIFICANT PROJECTS UNDER CONSTRUCTION – TO BE COMPLETED IN NEXT 12 MONTHS BUILDING LOCATION DEVELOPER UNITS LAUNCHED EXPECTED COMPLETION Kapil Kanala TCP Altura Phase II Sholinganallur Lancor Holdings Limited 182 Q2 2021 Senior Associate Director, Research Services M One Madhavaram Lokaa Developers 234 Q3 2021 +91 40 40405555 /[email protected] Data collated from primary and secondary resources. Estimations are subject to change * Rental and capital values have been depicted only for key submarkets ** Quoted capital value on carpet area based on agreement values which includes, Base Rate, Car Parking Charges, Internal Development Charges, etc. The above values for high-end segment are for units typically of 1,500-2,000 sf cushmanwakefield.com The above values for mid segment are for units typically of 1,000-1,400 sf Affordable housing has been defined as units with a carpet area of 60 sq.mt in metros / 90 sq.mt in non-metros and value up to INR 45 lakhs 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 & KEY TO SUBMARKETS Mid Segment Wakefield is among the largest real estate services firms with approximately 53,000 High-end Segment Central: Boat Club, Poes Garden, Nungambakkam employees in 400 offices and 60 countries. In 2019, the firm had revenue of $8.8 Central: Boat Club, Poes Garden, Nungambakkam Off Central-I: R.A. Puram, Abhiramapuram, Alwarpet and Teynampet billion across core services of property, facilities and project management, leasing, Off Central-I: R.A. Puram, Abhiramapuram, Off Central -II: T.Nagar, Mylapore, Annanagar, Kilpauk, Thiruvanmiyur, Adyar, Kotturpuram, Besant capital markets, valuation and other services. To learn more, visit Alwarpet and Teynampet Nagar, K.K.Nagar, Velachery, Vadapalani www.cushmanwakefield.com or follow @CushWake on Twitter. Off Central -II: T.Nagar, Mylapore, Annanagar, Suburban North - Madhavaram, Perambur,Thondiarpet ©2020 Cushman & Wakefield. All rights reserved. The information contained within this report is Kilpauk, Thiruvanmiyur, Adyar, Kotturpuram, Suburban West: Mogappair, Nolambur, Ambattur, Poonamallee High Road gathered from multiple sources believed to be reliable. The information may contain errors or Besant Nagar, K.K.Nagar, Velachery, Vadapalani Suburban South-I: Rajiv Gandhi Salai (Thiruvanmiyur to Kelambakkam) omissions and is presented without any warranty or representations as to its accuracy. Suburban South-II: GST Road (Alandur to Tambaram, Porur).