Binny Ltd Management Discussions

The residential market in India has witnessed a strong and sustained up cycle since the pandemic, prompting growing discussions around the possibility of a correction, particularly in premium segments which have experienced the bulk of growth. Despite these perceptions, market fundamentals in 2025 have remained resilient. The Reserve Bank of Indias cumulative 125 bps reduction in the repo rate since February 2025 has supported housing affordability and eased financing conditions.

During the Year 2024-2025, Chennais real estate market is holding firm, supported by infrastructure upgrades and steady end-user confidence. The city is being seen as one of Indias more stable housing markets, with demand sustained across affordable to premium segments. On-going metro corridor expansion is improving connectivity to emerging residential pockets, making peripheral locations more attractive for buyers. Backed by its industrial and IT ecosystem, Chennai continues to draw both homeowners and investors, reinforcing its position as a market built on stability and long-term value rather than short-term sentiment.

1. RESIDENTIAL REAL ESTATE TRENDS

During the fiscal year, Chennais residential market demonstrated a clear geographic pivot, shifting from traditional saturation in the south toward high-growth corridors in the North and West. Our Companys strategic positioning in these high-velocity zones aligns with the citys evolving infrastructure and demographic demand.

I. North Chennai: The Emerging Investment Frontier

North Chennai, historically a smaller market, underwent the most significant structural transformation in FY 202425. It is no longer just an industrial pocket but is rapidly maturing into a residential destination of choice.

- Economic Anchors: The commissioning of the TIDEL Park at Pattabiram has acted as a massive employment catalyst, driving demand for quality housing from a new generation of IT and tech professionals.

- Infrastructure Connectivity: The early-stage impact of the Metro Rail Phase II (Red Line) and the 400-foot Outer Ring Road has improved accessibility exponentially, reducing travel times to the city core.

- Value Proposition: With market share rising from 6% to 7%, this zone offers the highest potential for capital appreciation due to its relatively lower entry price points compared to the south, attracting both first-time homebuyers and long-term investors.

II. West Chennai: The Resilient Mid-Market Powerhouse

West Chennai maintained a dominant and stable 27% market share, cementing its status as a self-sustained residential ecosystem.

- Connectivity-Led Demand: The Mount-Poonamallee Road and the rapid progress of the Vadapalani- Poonamallee Metro corridor have transformed locations like Porur and Poonamallee from peripheral to core residential hubs.

- Diversified Occupancy: Demand in this corridor is uniquely balanced, fuelled by the IT/ITES clusters at one end and the Manufacturing/Logistics belt (Sriperumbudur-Oragadam) at the other.

- Market Stability: Th is zone has shown remarkable price resilience, with steady absorption rates driven by end- users seeking a work-live-play balance near major healthcare and educational institutions.

Strategic Alignment: By focusing our current major project in Perambur, which is situated in North Chennai and our Valasaravakkam Project which is maintaining a strong presence in the West Chennai, the Company is perfectly positioned to capture the Infrastructure-Led Appreciation cycle. These micro-markets are expected to outperform the city average in volume growth as connectivity improves and employment hubs continue to decentralize

As mentioned in the earlier reports, the Companys main focus is on the three land parcels in Perambur (North Chennai), Valasaravakkam (West Chennai) and Chingelpet (Adjoining district of Chennai (South).

Valasaravakkam

With the rapid growth in Chennais infrastructure, Valasaravakkam has emerged as a hotspot for real estate investment. Amid other factors, its proximity to DLF Cyber city, a key employment hub and its easy access to Chennai International Airport (13 km) also contributes to Valasaravakkams overall growth and appeal, making it an attractive option for savvy investors.

Situated towards the western part of Chennai, Valasaravakkam presents a great opportunity for investors looking to invest in Chennais real estate market. Here are five reasons that provide insights into why Valasaravakkam is an investment hotspot.

Valasaravakkam is a well-established residential destination in Chennai with an impressive price appreciation of over 63 percent in the last five years. The average apartment rate in Valasaravakkam is around 11,600 per sq ft, which makes it a lucrative investment hub. In fact, the areas rapid infrastructure growth is a key driver for this success, and several upcoming developments are expected to further enhance the home values and quality of life in Valasaravakkam.

These include -

- The upcoming Chennai Metro Phase 2 on the Red Line, which will connect Madhavaram to Sholinganallur, and will have a dedicated metro station in Valasaravakkam.

- The locality is also a part of the under-construction Chennai Metro Phase 2 Orange Line, which will link Lighthouse to Poonamallee, strengthening overall connectivity in the region.

Perambur

Chennai retail market witnessed absorption of 0.4 million sq.ft of retail space in year 2024-25, a 60% increase in demand compared to 2023-24. Anna Nagar, Adyar, Perambur, T. Nagar and ECR continues to be the main market streets accounting for 55% of total leasing activities.

Our Joint Development partner viz. SPR Group is developing a large-scale integrated township

- Market of India: A large-scale, first-of-its-kind organized wholesale and retail centre will become a major trade hub, potentially rivalling trade centres in other countries.

- Integrated Lifestyle: The development includes residential towers, a 1.5 million sq. ft. mall, the Shri Ram Universal School, and numerous amenities, aiming to create a self-sufficient community that attracts residents and businesses.

- Infrastructure & Connectivity: Its strategic location offers excellent connectivity via road and railways, with a metro station planned nearby, enhancing its accessibility and property values.

- Employment Opportunities: The various commercial and retail projects within SPR City are expected to generate significant employment opportunities, further boosting the local economy.

Chengalpet

Chengalpattu has rapidly transitioned from a quiet suburb to one of the most significant real estate growth corridors in the Chennai metropolitan region. As of now, it is favoured by investors and homebuyers seeking affordability.

2. COMMERCIAL REAL ESTATE TRENDS

The Chennai office market touched gross absorption of about 3.1 million sq.ft in year 2024 (Source..CIRIL Report 2024). Global Capability Centres (GCC) emerged as a dominant sector demand driver in year 2024, constituting 40% of commercial leasing volume, followed by Engineering & Manufacturing with a 16% share. Many operators are planning for new development owing to revival of commercial market demand and positive market sentiments. Chennai saw supply of around 1.2 million sq.ft of space in year 2024. Approx. 15.2 million sq.ft of supply is in the pipeline over the next 3-4 years. The overall city-level vacancy rate remained stable at 17.0%. Despite the significant upcoming supply, rentals are likely to remain stable over the next 2 years. Rentals in most micromarkets at the city level remained stable driven by flexi leasing options, cost optimisation and repurposed space utilisation. Chennai commercial market is expected to continue its robust performance with improved investors sentiments.

Chennais office market delivered a resilient and structurally strong performance in 2024-25, with total leasing volumes reaching 0.94 mn sq m (10.1 mn sq ft), marking the second-highest annual absorption on record after the peak year of 2023, when transactions touched 1.0 mn sq m (10.8 mn sq ft). Leasing momentum remained robust despite a relatively tighter supply environment, supported by sustained occupier confidence across GCCs, flex operators, and India-facing businesses. While 2024-25 leasing moderated marginally on a YoY basis, the market continued to demonstrate depth and consistency, reflecting Chennais position as a long-term occupier-

driven office market. On the supply side, office completions remained elevated through 2025, with total additions of 0.32 mn sq m (3.5 mn sq ft), enabling the market to absorb occupier expansion without materially loosening underlying fundamentals.

Future Developments

Announced in the 2025-26 State Budget, these is a 2,000-acre integrated township led by TIDCO. It is modelled as a 15-minute smart city where residents can work, live, and play within a small radius.

- Target Sectors: IT parks, Fintech trade zones, R&D centers, and life sciences.

- Key Villages Involved: Attimanam, Janakipuram, Kallapiranpuram, Padalam , Palayanur, and Puliparakoll.

- Impact: This project has already triggered a speculative surge in land prices, with some reports showing a year- on-year interest spike of over 60% since the announcement.

This is a game changer in that area for the real estate development.

- Regional Rapid Transit System (RRTS): A proposed high-speed rail corridor (Chennai - Chengalpattu - Tindivanam) with speeds of 160-200 km/h is under study, which would make Maduranthakam a viable suburb for Chennai city workers.

- Road Connectivity: The expansion of the GST Road (NH-45) remains the backbone of this growth. A new link

road from Karunguzhi to ECR is also planned, which would provide the region with sea-route access.

- Industrial Hubs: Proximity to the Melmaruvathur educational corridor and existing industrial units near Padalam ensures steady blue-collar and white-collar housing demand.

Opportunities

Residential

- Luxury Housing: Demand for homes priced above 1.5 crore is skyrocketing. Buyers are no longer just looking for a roof; they are looking for branded residences and lifestyle-integrated townships.

- NRI Investment: A favorable exchange rate and the transparency brought by RERA have made India a top-tier destination for Non-Resident Indians seeking long-term capital appreciation.

Commercial REITs & Alternative Assets

The Grade-A office market remains robust, but the real excitement is in alternatives:

- REITs 2.0: With the 2026 reclassification of REITs as equity instruments, liquidity has improved, attracting more retail and institutional investors to commercial real estate.

- Data Centers & Logistics: With the AI boom and 5G expansion, the demand for data center space is projected to grow exponentially. Similarly, e-commerce has turned warehousing into a blue-chip investment

Tier-II Growth & Infrastructure Corridors

The suburbs like Chengalpattu are the new frontlines.

- Infrastructure Catalysts: Multi-modal logistics parks, new airports, and high-speed rail projects (RRTS) are turning remote land into prime residential and commercial hubs overnight.

Threats

Affordability Crisis

- High interest rates and soaring land costs have pushed developers toward higher-margin luxury projects, leaving a massive gap for the middle and lower-income classes. Sales in this segment have seen double-digit declines in 2026.

Inventory Overhang & Oversupply

- Developers have launched more units than they have sold, leading to an inventory overhang estimated at 3.2 - 3.4 years. This could lead to price stagnation in few specific zones.

Geopolitical & Economic Volatility

- External Shocks: Global geopolitical and volatile equity markets have made domestic investors more cautious.

- Input Costs: While GST 2.0 has helped stabilize some material costs, any sudden hike in global oil or steel prices directly eats into developer margins and increases final property prices.

Internal Control system and their adequacy

The Company has adequate internal control systems commensurate with its size and nature of business and complexity of operations. Internal Auditors conduct regular audits and report to the Audit Committee, thus ensuring the adequacy and effectiveness of Internal Control. The observations of the Internal Auditors are reviewed periodically on a quarterly basis and due compliances ensured. The exceptional items are reported to the Board.

Discussion on financial performance with respect to operational performance

Financial performance with respect to operational performance is discussed in the main part of the Report.

Material Developments in Human Resources / Industrial Relations front, including number of people employed.

There was no significant development in Human Resources. The Company has a structured job appraisal and training systems and as we expand, there this robust systems and processes in place. The Industrial relations remained cordial throughout the year.