The Tamil Nadu Housing Board (TNHB) is positioning its new commercial complexes across Chennai as affordable alternatives to private office rentals. With rents ranging from ₹88 to ₹118 per sq. ft., the TNHB spaces are nearly 20% cheaper than comparable private properties, making them attractive to government agencies and private companies seeking cost-effective office solutions.
Several government departments, including the Employees’ Provident Fund Organisation (EPFO) and the Goods and Services Tax (GST) department, are among the early occupants of TNHB complexes. The board has already sold properties in Chintamani, which previously housed the old market, and in Anna Nagar to government bodies, including the TN Real Estate Regulatory Authority.
The TNHB has developed seven additional complexes in prime locations such as Ashoka Colony in KK Nagar, Mogappair, CIT Nagar, Arumbakkam, Ashok Nagar, Peters Colony, and Besant Nagar. The strategic positioning of these hubs, combined with metro connectivity and central access, has made them attractive for organizations struggling to find office space in congested areas. A TNHB official noted, “We shifted to CIT Nagar since staff found it difficult to travel all the way to Koyambedu. This centrally located spot now houses GST offices, and EPFO has rented multiple floors.”
The new complexes are designed to accommodate modern office requirements. Each floor ranges between 7,000 and 18,000 sq. ft., offering flexible options for tenants of varying sizes. The board reports that approximately 70% of available space in these complexes has already been leased, while the remaining floors are being marketed to private companies.
TNHB is also working on three upcoming high-rise projects aimed at attracting larger corporate tenants.
- Ashok Nagar: A 22-floor mixed-use tower featuring commercial spaces on the first four floors and residential units above. The tower is projected to generate an annual rental income of nearly ₹35 crore once stabilized.
- Arumbakkam: An 11-floor tower nearing completion, offering substantial commercial space. The project has drawn interest from IT/ITES firms looking for Grade B+ space at nearly 25% lower rentals than OMR and Guindy.
- Peters Colony: A 17-floor high-rise with three basements, designed to accommodate large-scale commercial operations. The tower will include 500 parking slots, making it one of TNHB’s largest parking provisions in Chennai.
To accelerate private sector participation, TNHB floated tenders to empanel consultants for feasibility studies, marketing strategies, and transaction advisory services, including bid management, for the Ashok Nagar, Arumbakkam, and Peters Colony projects. Officials indicated that consultant bids will be finalized by December 2025, with tenant pre-leasing campaigns set to start in early 2026.
The three projects together represent an investment potential of ₹550–₹600 crore. B. Ganesan, Managing Director (in charge), emphasized the board’s aim to create functional, affordable commercial hubs while ensuring modern infrastructure standards.
The TNHB strategy highlights the board’s commitment to offering well-located, cost-effective office spaces. By providing competitively priced rental options in central Chennai locations, TNHB is addressing the space shortage for government departments and creating opportunities for private companies to establish offices at lower operating costs.
With urban expansion and rising office rents in Chennai, TNHB’s commercial projects provide a sustainable alternative for both government and corporate tenants. Industry analysts estimate that TNHB’s share in Chennai’s commercial leasing market could rise from the current 3–4% to nearly 8% by 2027. By then, TNHB is projected to bring an additional 4–4.5 lakh sq. ft. of office space into the market, strengthening its role as a key public sector developer in Chennai’s commercial real estate segment.
The TNHB push comes at a time when Chennai’s Grade A office market is expanding steadily. City-wide Grade A vacancy stood at 13.85% at the end of Q2 2025, while net absorption touched about 2 million sq. ft., an 84% jump quarter-on-quarter. In H1 2025 alone, Chennai absorbed nearly 5.5 million sq. ft. of Grade A office space – a 57% year-on-year increase.
Fresh supply additions in FY2025 were around 4.9 million sq. ft., with another 1.3 million sq. ft. delivered in Q1 of FY2026. Analysts expect Chennai’s total office stock, currently at 89 million sq. ft., to cross the 100 million sq. ft. mark by end-2026. Occupancy levels for Grade A stock are forecast to remain steady at 90.5–91% by March 2026.
Against this backdrop of strong demand and steady absorption, TNHB’s centrally located, cost-competitive complexes are being positioned as alternatives to higher-priced Grade A stock in hubs such as OMR, Guindy, and Mount Poonamallee Road.
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