Chennai GCCs overtake IT sector in India office space race
MAHARASHTRA, INDIA — Chennai’s commercial real estate (CRE) market is experiencing a surge as global capability centers (GCCs) surpass the traditionally dominant information technology (IT) sector, emerging as the primary drivers of office space leasing in the city.
According to a report from The Times of India, in 2025, GCCs accounted for 51% of gross office leasing, highlighting a major shift in demand and underscoring the growing influence of these global operation hubs.
GCCs drive growth amid IT slowdown
According to data sourced by The Times of India from real estate intelligence firm Anarock Group, GCCs leased 4.3 million sq ft of the total 8.4 million sq ft of gross office space in Chennai last year.
This trend outpaced the national average, with GCCs accounting for 41% of gross office absorption across India, up from 36% in 2024.
The rise of GCCs has been steady over the past three years. In 2023, they leased 2 million sq ft (27% share of 7.4 million sq ft), which grew to 3.29 million sq ft (41% share of 8.1 million sq ft) in 2024.
“The IT and ITeS sector, traditionally the dominant force in office space leasing here, has experienced a continued moderation, while demand from GCCs has been on the rise,” Peush Jain, managing director of commercial leasing and advisory at Anarock Group, explained.
This shift reflects broader economic and industry dynamics, as companies increasingly look to consolidate operations and expand global capabilities from Chennai, positioning the city as a key outsourcing and business hub.
Chennai office supply tightens as demand surges
The surge in GCC demand has put pressure on office supply. While new office supply in 2025 stood at 3.9 million sqft (a 72% growth), net office absorption was higher at 5.6 million sqft, representing 12% growth compared to the 10% average across India’s top seven cities.
Chennai continues to maintain low vacancy rates, dropping from 9.2% to 8.8%, and average rentals rose 5% to nearly Rs 79 (US$0.95) per sq ft.
“Current trends indicate that the Chennai office market will continue to show positive momentum in 2026, with GCC demand remaining strong. Data suggests that both new office supply and absorption may see anywhere between 10%-15% growth in 2026 compared to 2025,” Jain said, offering a positive outlook.
Beyond Chennai, Tier 2 cities like Coimbatore and Madurai are emerging as new data center hubs, complementing Chennai and Mumbai’s established metro-level operations.
The growth signifies a strategic geographic diversification for GCCs, further solidifying India’s role in global outsourcing.
Chennai’s commercial real estate development is a reflection of a larger change in the outsourcing sector, where global operations hubs are driving the future of business and real estate in terms of expansion, talent, and strategy, as the GCCs still dominate IT/ITeS in terms of office space occupation.
