How Chennai GCC expansion could reshape its real estate market
Tamil Nadu is home to Global Capability Centers (GCCs), but the pace of expansion has picked up in recent years, with several of the world’s leading companies choosing Chennai as their GCC hub. The previous Dravida Munnetra Kazhagam (DMK) government placed great emphasis on building the GCC state ecosystem and now the Tamilaga Vettri Kazhagam (TVK) government continues to invest in the sector through a series of MoUs. It also made new announcements for the sector.
With the GCC’s footprint expanding, a knock-on effect is expected to be felt in the commercial real estate market in Chennai, leading to increased demand for A-grade office space and spurring leasing activity. This reflects the impact of the IT boom on office and residential development in the late 1990s and early 2000s.
To attract the next generation of GCCs, Tamil Nadu Industries Minister S. Keerthana recently said that the “Tamil Nadu GCC Corridor and Growth Plan” will be introduced along the Pallavaram-Thoraipakkam Radial Road, Mount-Poonamallee High Road and Rajiv Gandhi Salai. She said these zones will have higher FSI along with better common and shared infrastructure facilities to attract more GCCs to Chennai.
“Tamil Nadu GCC Corridor and Growth Plan is a strategic initiative to release expansion capacity for multinational global capability centers already operating in Chennai”Deepak JacobManaging Director and CEO of Guidance, a nodal agency based in Chennai
“Rather than approving projects in stages, the government is treating the three established commercial corridors as integrated zones with coordinated planning and infrastructure development,” adds Jacob.
The Pallavaram-Thoraipakkam Radial Road was selected as it already hosts an established IT infrastructure and serves as a critical north-south connector for the southern GCC cluster with direct connectivity to the Chennai International Airport via the Pallavaram Flyover, says Jacob. “Mount-Poonamallee High Road (SH-55) is an emerging commercial corridor with a proven GCC presence and benefits from the upcoming development of the Poonamallee Metro Line, making it a gateway for multinational entry. Rajiv Gandhi Salai (OMR) is an established premier IT corridor with the highest GCC concentration and proven demand from the banking and financial services (BFSI), automotive and professional services sectors.”
FSI improvements
The basic game plan includes increasing the Floor Area Index (FSI) in eligible zones so that existing GCC campuses can expand vertically without additional land acquisition, while upgrading common infrastructure.
Jerry Kingsley
“Higher FSI will allow developers to build more floor space and lettable area and can also encourage redevelopment of projects to higher density, generating higher development returns and better margins without having to buy additional land, which will benefit developers, property owners and investors,” says Jerry Kingsley, Head of India Research and City Head of Capital Markets, JLL Chennai, Commercial Real Estate Solutions.
Kingsley adds that by targeting GCCs that require Class A infrastructure, the corridor ensures continued demand for premium office space.
The resulting influx of qualified professionals will drive residential development across the mid to premium segments and launch new housing projects.
Growth is expanding
According to Kanchan Krishnan, city director and managing director of Anarock, a real estate consultancy, GCCs accounted for around 55% of office leasing in Chennai in the first half of 2026, up from 49% in 2025.”
“GCCs deliver high-quality jobs, which creates demand for housing, retail, hospitality, schools, healthcare and other social infrastructure. The impact can extend beyond the office market to create a wider employment-based real estate ecosystem.”Kanchana KrishnanCity Chairman and CEO, Anarock
Currently, Tamil Nadu is home to more than 465 Global Capability Centers representing approximately 10-15% of the entire Indian GCC ecosystem. The state has 4.5 lakh GCC-ready professionals and has added roughly 65,000 GCC jobs in FY2025. Chennai accounts for 405 of these GCCs. Developing cities of Tamil Nadu like Coimbatore, Madurai and Tiruchi have more than 60 GCC countries. This shows the distributed growth of the state.
According to a study by commercial real estate services firm Colliers, although Bengaluru and Hyderabad together drove more than 60% of the GCC’s leases by 2021, demand from capacity centers in India is becoming broad. Other Tier I cities continue to use competitive costs and specialized industrial ecosystems to attract global firms. While Bengaluru and Hyderabad are likely to continue to be preferred by technology GCCs, Mumbai and Pune will anchor BFSI operations. Similarly, Chennai is likely to increasingly attract GCCs from the engineering and manufacturing sectors.
Memorandum of Understanding to promote growth
The TVK Government signed a number of MoUs in the GCC space at the Vettri Tamil Nadu Investment Conclave. To give an example, Bosch Global Software Technologies and TIDCO have signed a memorandum of understanding to establish a global software development center focused on automotive software and autonomous systems with research, development and engineering operations. It is expected to come up either along the OMR or the Mount-Poonamallee corridor.
Chubb, a global insurance company, signed a memorandum of understanding in July to expand its insurance operations through GCC in Chennai. The new center will handle claims processing, AI-driven underwriting, fraud detection and proprietary operations to serve Chubb’s Asia-Pacific portfolio.
Nordex, a German wind turbine manufacturer and world leader in renewable energy technology, has signed a memorandum of understanding to establish a major GCC in Chennai focused on product engineering and technology innovation. Recently, during his visit to the UK, Chief Minister C. Joseph Vijay signed an agreement with Ernst & Young (EY) to set up a GCC in Tamil Nadu, entailing an investment of ₹1,000 crore.
Real estate watchers say these investments will lead to significant growth in leasing activity in the coming months.
Jacob says these GCCs are not support centers or back-office operations, but encompass much more. For example, existing GCCs such as Ford design powertrains for cars sold in 150 countries; Bosch develops autonomous driving technology; Standard Chartered runs critical banking operations 24/7; KLA Algorithms Advance Global Semiconductor Manufacturing; and AstraZeneca discovers drugs with global reach. These are strategic, highly innovative functions that multinational companies cannot outsource.
Tamil Nadu is also attracting India’s first GCC members – companies setting up their first Indian operations in the state. SMBC (Sumitomo Mitsui Banking Corporation), Japan’s second largest bank, has established a major GCC in Chennai focused on trade finance, banking operations and technology infrastructure for Asia Pacific clients. HD Supply, a leading industrial and construction distributor, has chosen Chennai for its India GCC to optimize supply chain operations and develop digital commerce platforms serving the Indian infrastructure and construction sector. SES (Société Européenne des Satellites), a Luxembourg-based satellite and space technology company, has established a technology center in Chennai for satellite communications, IoT solutions and space technology applications serving Asia-Pacific markets.
Demand and price
GCCs are looking for spaces starting at 30,000 square feet. and rises to several million square feet. “Most mid-sized GCCs in Chennai typically opt for conventional office space of 30,000 to 50,000 sq ft, looking for stability and infrastructure tailored to their business needs. Meanwhile, smaller GCCs entering Chennai prefer flexible spaces that provide lower initial costs, shorter commitments and the ability to scale during their early operational phase,” adds Kingsley.
Class A rents in Chennai still hover around ₹76-78 per sq ft, giving it a significant cost advantage over markets like Bengaluru and Hyderabad.
Infrastructure improvement
As the GCC corridors are proposed, industry stakeholders have urged the government to strengthen infrastructure in these regions. One of the key issues is the need to speed up the Metro Rail projects as roads in several areas remain in poor condition due to ongoing excavation work. Last mile connectivity and public transport also need to be improved. In addition to office space, GCC clusters require good schools, hospitals, hotels, serviced apartments, restaurants, retail and leisure facilities. The government should consider developing this supporting infrastructure along with the GCC hubs. Drainage, water supply and flood mitigation should be considered basic infrastructure.
Krishnan said there was evidence of an employment-led real estate multiplier effect, although it was difficult to attribute the price appreciation solely to the GCC. The pattern was evident during the IT revolution in locations such as OMR in Chennai, Whitefield in Bengaluru and Gachibowli in Hyderabad.
A similar trend is emerging in Chennai now, she said. Average residential capital values increased from around ₹ 4,935 per sq ft. in 2020 to ₹7,100 per sq.ft. in 2025 an increase of approx. 44%. South Chennai, including the OMR/GST growth belt, accounted for approximately 78% of residential launches and 66% of sales in 2025.