Global Capability Centres’ Office leasing to touch 3.2 Mn Sq Ft in Chennai by 2025: CBRE Report 

Chennai, November 27, 2024: CBRE South Asia Pvt. Ltd. On Wednesday released a report titled, ‘Tamil Nadu: The Next Frontier for Global Corporations’. The report highlights Chennai’s rising prominence as a key destination for Global Capability Centers (GCCs) and its expanding commercial real estate landscape. As per the report, it is projected that GCCs would lease ~3-3.2 mn. sq. ft. in 2025 in Chennai. Over the years, Chennai has solidified its position as a preferred hub for global corporates, which accounts for 11% of India’s current GCC talent. The city currently hosts 250+ GCC units, which is expected to reach around 450-460 units by 2030. Aligned to this growth, the GCC talent pool in Chennai is projected to grow by 1.4X, reaching 320-370k by 2030. This growth is underpinned by a diverse talent mix of experienced professionals and fresh graduates, further strengthened by the state government’s initiatives in workforce training and industry-academia collaboration.

Chennai’s robust infrastructure, proactive state government policies, and quality office development are aligned to meet the needs of global corporates. Between 2025 and 2026, the city is set to add 12–13 million sq. ft. of premium office space tailored to enhance employee experience and offer state-of-the-art amenities. Chennai is India’s fifth-largest office market, with 90+ million sq. ft. of office stock as of 2024 (YTD). As per the report, total office stock in the city is expected to surpass 100 mn. sq. ft. by 2026. Campus-style developments and sustainable design approaches make the city a magnet for businesses prioritizing employee well-being and environmental consciousness.

Chennai currently houses about 250 GCCs that employ 150,000+ professionals, contributing about 11% of India’s total GCC talent pool with notable ER&D capabilities. Strategic policies like the Tamil Nadu Startup and Innovation Policy 2023 and R&D Policy 2022 enhance its attractiveness, while the payroll subsidy program for newly established GCCs incentivizes high-paying jobs, drawing substantial global investments and solidifying the city’s role as a hub for innovation and talent.

Tamil Nadu – Strategic imperative for global businesses

Tamil Nadu’s vision of becoming a USD 1 trillion economy by 2030 is underpinned by its strong industrial base and expanding services sector, including Global Capability Centers (GCCs). Cities like Coimbatore, Madurai, and Tiruchirappalli are emerging as key hubs for manufacturing investments, providing significant opportunities for GCCs to drive innovation and product development. With a robust talent pool in manufacturing, software development, and mechanical engineering, GCCs in Tamil Nadu are poised to deliver niche and foundational expertise, contributing to the state’s economic growth. Initiatives in R&D, regulatory support, and workforce development further bolster sustainable growth prospects.

GCCs overview in Chennai 

Chennai is ranked third in GCC leasing activity in India after Bengaluru and Hyderabad during the period from 2022-9M 2024. The city has witnessed GCC office absorption increasing from 1.4 million sq. ft. in 2022 to 2.3 mn. sq. ft. in the first nine months of 2024.

This growth is fuelled by strong demand from corporates belonging to sectors such as engineering and manufacturing (33%), BFSI (27%), and tech (13%). US firms accounted for 67% of GCC setups between 2022 and 9M 2024. During the same time period, key micro-markets in Chennai viz., OMR Zone 1, MPH Road, and PT Road, cumulatively contributed to 92% of the overall city GCC leasing, cementing Chennai’s position as a global hub for corporate growth.

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “As the world embraces digital transformation, Global Capability Centers (GCCs) have emerged as strategic drivers of India’s exponential growth. Initially attracted by cost advantages, GCCs in India now leverage the country’s deep pool of skilled talent and vibrant startup ecosystem. 

Tamil Nadu presents a compelling proposition for businesses seeking to establish or expand their global operations. The state, with its attractive policy incentives, strong talent pool, robust corporate ecosystem, and abundant quality office space, has solidified its position as a preferred destination for these GCCs. Tamil Nadu currently hosts over 250 GCCs, contributing substantially to India’s GDP.”

Ram Chandnani, Managing Director, Advisory & Transaction Services, CBRE India, said, “Chennai is a vibrant metropolis with a rich cultural heritage and a thriving economy. The city’s strategic location and excellent connectivity have made it a preferred business destination, furthering economic development.

To foster investment and job creation, the Tamil Nadu government has proactively initiated policies across sectors.  The government recently announced GCC-specific policies which would aid the growth of such facilities in the state. Additionally, the state’s policies on fintech, R&D, startups, and semiconductors offer attractive incentives, further enhancing its appeal as a destination for established and emerging firms.”

The convergence of talent availability and robust infrastructure is propelling businesses to establish GCCs in Tamil Nadu’s emerging and developing cities. Government investments in education and training initiatives further bolster the state’s capacity to meet the evolving demands of the modern economy. Coimbatore, Madurai and Tiruchirappalli are emerging cities in Tamil Nadu in the GCC space.