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Chennai's GCC office leasing to pass 3.2 million sq. ft. by 2025: CBRE

2024-11-28

Chennai, ranked as India’s third most active market for Global Capability Centers (GCCs), is poised to more than double its office space leasing for GCCs compared to the past two years. According to CBRE, the city is projected to absorb 3 to 3.2 million sq. ft. of office space by 2025, with strong demand led by American companies.

Chennai currently houses 11% of India’s GCC workforce, supported by state initiatives like the Tamil Nadu Startup and Innovation Policy 2023 and the R&D Policy 2022. Major firms such as AstraZeneca, Adidas, and Caterpillar established GCC operations in Chennai this year, solidifying the city's appeal for global enterprises.

“Global Capability Centers are critical drivers of India’s growth, initially attracted by cost benefits but now leveraging a skilled workforce and vibrant startup ecosystem,” said Anshuman Magazine, Chairman & CEO - CBRE India, South-East Asia, Middle East & Africa. Tamil Nadu’s policy incentives, robust talent pool, and quality office spaces make it a top choice for GCC expansion.

The city currently accommodates about 250 GCC units, expected to increase to 450-460 by 2030. Correspondingly, the GCC talent pool is projected to grow by 1.4 times, reaching 320,000–370,000 professionals by 2030, driven by government policies and a diverse talent base of seasoned professionals and fresh graduates.

Between 2025 and 2026, Chennai is set to add 12–13 million sq. ft. of premium office space to meet rising GCC demand. Currently India’s fifth-largest office market, the city boasts over 90 million sq. ft. of office stock as of 2024 and is expected to surpass 100 million sq. ft. by 2026.

Chennai has seen rapid GCC office absorption, growing from 1.4 million sq. ft. in 2022 to 2.3 million sq. ft. in the first nine months of 2024. Key sectors driving this growth include engineering and manufacturing (33%), BFSI (27%), and technology (13%), with U.S. firms accounting for 67% of GCC setups during this period. Key micro-markets such as OMR Zone 1, MPH Road, and PT Road contributed to 92% of the city's GCC leasing activity.

Smaller cities like Coimbatore, Madurai, and Tiruchirappalli are also emerging as hubs for manufacturing investments, creating opportunities for GCC-led innovation and development. Tamil Nadu’s industrial infrastructure, coupled with initiatives in R&D and workforce skill enhancement, is positioning the state to achieve its $1 trillion economy target by 2030.

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