Chennai, one of India's most active markets for Global Capability Centres (GCCs), is on track to more than double its office space leased to GCCs in just two years. By FY25, the city is projected to absorb between 3 and 3.2 million square feet of office space, driven largely by American companies that have shown significant interest in setting up operations in Chennai. The city is home to approximately 250 GCCs, contributing 11% of India’s GCC workforce, which amounts to over 150,000 professionals. This figure is expected to grow 1.4 times by FY30, with the workforce expanding to 320,000 to 370,000 professionals, highlighting Chennai’s increasing importance as a global business hub.

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Key drivers behind this rapid growth include the Tamil Nadu Startup and Innovation Policy 2023 and the R&D Policy 2022, which provide a supportive environment for global businesses looking to establish or expand their operations in the city. Major global companies like AstraZeneca, Adidas, and Caterpillar have already set up operations, contributing to the city’s growing attractiveness for Global Capability Centres.

Chennai’s strategic location, highly skilled talent pool, and government incentives make it an attractive option for businesses across sectors like engineering, banking, financial services, insurance, and technology. Over the next few years, Chennai’s office market is expected to continue growing, with an addition of 12-13 million square feet of premium office space projected between FY25 and FY26. Currently, Chennai is the fifth-largest office market in India, with over 90 million square feet of office space in stock, which is expected to surpass 100 million square feet by FY26.

The demand for office space is largely driven by sectors such as banking, technology, and engineering, with US companies accounting for 67% of GCC setups between FY22 and Q1 FY24. Notably, key micro-markets in Chennai, including OMR Zone 1, MPH Road, and PT Road, have contributed to 92% of the overall GCC leasing activity.

Alongside Chennai, cities like Coimbatore, Madurai, and Tiruchirappalli are emerging as significant hubs for manufacturing investments, supporting Tamil Nadu’s goal of achieving a US$ 1 trillion economy by FY30. As the state continues to invest in infrastructure and support business initiatives, Chennai’s position as a top destination for Global Capability Centres is set to grow, fostering greater economic opportunities for the region.

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