A recent study by Knight Frank India shows that Chennai recorded a surge in Global Capability Centres (GCC)-oriented office transactions during 2023, totalling 6.02 million square feet across 71 deals.
This figure represents a substantial 176% year-on-year (YoY) increase, signifying the city’s growing prominence as a preferred destination for GCC operations.
Of all the GCC deals observed across eight major commercial markets in India during 2023, Chennai accounted for a significant 29%, further solidifying its position in the GCC landscape. This momentum marks a significant leap from the 57 deals recorded in 2022, which totalled 2.18 million square feet.
The study also highlighted industry-wise transactions, and mentioned Banking, Financial Services, and Insurance (BFSI) segment as the frontrunner in GCC-oriented office space transactions.
Despite only six deals throughout the year, the BFSI sector contributed over 30% of GCC transactions in Chennai, leasing a substantial 1.89 million square feet in 2023.
The manufacturing sector emerged as the second-largest occupier of GCC business-oriented office spaces in Chennai’s commercial market, with transactions totalling 1.78 million square feet in 2023. Other service sectors recorded 26 GCC-oriented deals, representing the highest number of transactions during the same period.
Viral Desai, Senior Executive Director, Occupier Strategy & Solutions, Industrial & Logistics, Capital Markets and Retail Agency, Knight Frank India, said, “GCCs dominated as an end-user occupier profile, accounting for more than half of the office volume transactions in Chennai during the year 2023.”
He further said: “Tamil Nadu R&D Policy 2022 has meaningfully aided in accentuating GCC investments in the State, particularly in Chennai. The market saw a remarkable surge in the number of GCC deals across various industries, with IT, Manufacturing, and other service sectors creating a vibrant tapestry of transactions. Notably, BFSI emerged as the leader of market, commanding the highest GCC transacted volumes in the city.”
Mr. Desai said that Chennai’s relative economic strength and relatively low occupancy cost positions commercial assets of the city favourably amongst the global occupiers looking to expand operations in the APAC region.
According to data provided by Guidance, the nodal agency instrumental in bringing in investments in Tamil Nadu, Chennai has over 250 GCCs employing over 1.5 lakh people.
According to a report jointly published by Nasscom and Zinnov, the percentage share of Chennai in employment in GCCs has increased from 9% to 10%. Prominent companies, including Adidas, Hitachi Energy, UPS, Harman, Mizuho, Guidehouse, and Ashley Furniture, have chosen Chennai to set up their GCC in the last couple of years.
