Chennai clocks 2.6 million sq ft of office leasing during January to March 2025

CHENNAI:

Chennai registered 2.6 million sq ft of office leasing during January–March 2025, driven primarily by technology firms, fast-moving consumer goods (FMCG) companies, retail businesses, and flexible space operators, according to CBRE’s latest report.

Leasing activity in the city was largely composed of small-sized deals. Nationally, India’s office market saw gross absorption of 18 million sq ft during the quarter—a 5% year-on-year increase. Bengaluru, Delhi-NCR, and Mumbai dominated leasing activity, accounting for nearly two-thirds of the total, the report stated..

Notably, Chennai contributed 10% of leasing in green-certified developments. “India’s office sector is on a solid trajectory for sustained leasing growth, driven by strategic expansions from both domestic and global occupiers,” said Anshuman Magazine, Chairman & CEO, CBRE India, South-East Asia, Middle East & Africa. “With strategic investments and a maturing office landscape, the sector is poised for long-term resilience and evolution,” he added.

Chennai and Pune are emerging as attractive destinations due to their skilled talent pools and robust supply pipelines. The report also highlights rising interest in tier-II cities, spurred by state-level incentives and cost efficiencies.

Among sectors, banking, financial services, and insurance (BFSI) firms recorded a 100% year-on-year surge in leasing across India, accounting for 26% of the total space absorbed. American financial institutions led this growth, contributing nearly half of BFSI leasing, followed by domestic banks at 31%. Within this, Global Capability Centres (GCCs) played a pivotal role, absorbing 57% of BFSI-related office space.

GCCs overall accounted for 45% of all office leasing in Q1 2025—equivalent to 8 million sq ft—marking a 66% year-on-year growth. Bengaluru led GCC leasing with a 40% share, followed by Delhi (24%) and Chennai (14%).

“India is rapidly emerging as a global hub for GCCs, with companies leveraging the country’s skilled workforce to drive innovation and digital transformation,” said Ram Chandnani, Managing Director, Advisory & Transaction Services, CBRE India. “In 2025, GCCs are expected to contribute 35–40% of total office space absorption.”

The technology sector retained its stronghold, contributing 24% of total leasing, while flexible space operators made up 12%. Engineering, manufacturing, and analytics firms also added to the momentum. Global corporations accounted for 62% of total leasing, with American companies leading at 45%.

CBRE report states technology is expected to remain a primary driver, supported by growth in AI, machine learning, and cloud computing. BFSI and engineering sectors are also poised to deepen their presence, powered by digitalisation trends.