Commercial vs Residential: Which investment pays better returns in Chennai?

Depends on cycles, and these change.

Demand and supply, the economy, etc.

Commercial may get better initial returns, but have less capital gains, and for many, you pay for the outgoings.

So there is no correct answer, and you need to do your research.

Both are speculative, so be prepared for that as well.

Long term, real estate “usually” does well, especially if you don't “have to sell” in a low cycle.