Chennai to Witness Surge in Office Space Leasing for Global Capability Centers
Chennai, one of the most active markets in India for Global Capability Centers (GCCs), is set to experience a significant increase in office space leasing for GCCs. According to CBRE, the city is projected to absorb 3 to 3.2 million square feet of office space by 2025, more than doubling the leasing activity of the past two years. The strong demand is primarily driven by American companies, solidifying Chennai’s appeal for global enterprises.
Tamil Nadu’s Supportive Initiatives Fueling Growth
Chennai currently houses 11% of India’s GCC workforce, thanks to state-supported initiatives such as the Tamil Nadu Startup and Innovation Policy 2023 and the R&D Policy 2022. This year, major firms like AstraZeneca, Adidas, and Caterpillar established GCC operations in Chennai, further bolstering the city’s reputation as a preferred choice for global expansion.
India’s Growth Driven by Global Capability Centers
As per Anshuman Magazine, Chairman & CEO – CBRE India, South-East Asia, Middle East & Africa, Global Capability Centers play a vital role in India’s growth. Initially attracted by cost benefits, these centers now leverage India’s skilled workforce and vibrant startup ecosystem. Tamil Nadu’s policy incentives, robust talent pool, and quality office spaces position the state as a top choice for GCC expansion.
Rapid Growth and Expanding Talent Pool
Chennai currently accommodates around 250 GCC units, expected to increase to 450-460 by 2030. The GCC talent pool is projected to grow by 1.4 times, reaching 320,000-370,000 professionals by 2030. This growth is driven by government policies and a diverse talent base, consisting of seasoned professionals and fresh graduates.
Chennai’s Ambitious Development Plans
To meet the rising GCC demand, Chennai aims to add 12-13 million square feet of premium office space between 2025 and 2026. Currently, the city is India’s fifth-largest office market, boasting over 90 million square feet of office stock as of 2024. By 2026, Chennai is expected to surpass 100 million square feet of office space.
Industry Drive and Micro-Markets Fueling Expansion
Chennai has witnessed rapid GCC office absorption, growing from 1.4 million square feet in 2022 to 2.3 million square feet in the first nine months of 2024. The key sectors driving this growth include engineering and manufacturing (33%), BFSI (27%), and technology (13%). U.S. firms account for 67% of GCC setups during this period. Notably, micro-markets such as OMR Zone 1, MPH Road, and PT Road contribute to 92% of the city’s GCC leasing activity.
Emerging Opportunities in Smaller Cities
Smaller cities like Coimbatore, Madurai, and Tiruchirappalli are emerging as manufacturing investment hubs, creating opportunities for GCC-led innovation and development. Tamil Nadu’s industrial infrastructure, coupled with initiatives in research and development, and workforce skill enhancement, position the state to achieve its $1 trillion economy target by 2030.
Chennai’s tremendous growth in office space leasing for GCCs reflects its attractiveness as a global business destination. With the support of Tamil Nadu’s initiatives and a thriving talent pool, the city is poised to remain a leading choice for expansion and consolidation for years to come.
