Chennai’s office stock set to exceed 100 million sq ft by 2026 end

The office stock in Chennai is expected to exceed 100 million sq ft by the end of 2026 as against 89 million sq ft as on December end, ranking fifth in India, said a CBRE-CII Tamil Nadu joint report.

Private equity investments in Chennai’s office assets have also reached over $1.19 billion between 2022 and 2024 indicating the institutional investors’ interest in this market.

The demand for office spaces in Chennai has led to an increase in campus-style developments, attracting global and domestic corporates.

The influx of capital and the entry of developers have enabled the construction of office buildings offering multiple space options. A robust public transportation network has contributed to office activity across the city.

“Tamil Nadu's strategic vision of becoming a $1 trillion economy by 2030 is driven by its robust industrial and services sectors. The continued attractiveness of the state as an investment destination in India, particularly for global/domestic manufacturing players, is expected to further push it to the forefront of innovation and technological evolution,” said Anshuman Magazine, Chairman & CEO, India, Southeast Asia, Middle East & Africa, CBRE.

According to him, the state's robust manufacturing base provides a solid foundation for the growth of its services sector across cities such as Coimbatore, Madurai, and Tiruchirappalli.

Chennai’s office market, previously led by technology firms, is seeing increased interest from the BFSI and life sciences sectors. Existing technology firms have built a strong foundation, attracting other industries. BFSI firms continue to expand, focusing on digital infrastructure and cloud technology.

The life sciences sector absorbed 0.8 million sq ft in 2024 in the city, a 60% rise from the previous year. Research institutions and a skilled workforce are driving growth in biopharmaceuticals, diagnostics, and regenerative medicine, the report added.

The city is also positioning itself as a hub for Global Capability Centres (GCCs), ranking third in GCC leasing after Bengaluru and Hyderabad. US firms were the most active in setting up GCCs from 2022 to 2024. Tamil Nadu hosts over 250 GCCs, with leasing at approximately 2.9 million sq ft in 2024.

Chennai is India’s second-largest data centre market after Mumbai, with a total stock of over 220 MW as of December 2024. The city hosts 20% of India’s total data centre capacity, driven by its coastal location, bandwidth availability, and IT presence. Key data centre hubs include Ambattur, Siruseri, and Oragadam.