Chennai’s Competitive Rentals Could Boost Global Capability Centre Investments, Say Experts

With competitive commercial rents and growth in a variety of sectors, Chennai is being looked at as an attractive competitor in India’s booming real estate arena, according to the experts on a Tamil Nadu $1 trillion economy goal panel recently held.

The demand for commercial real estate in India stands between 70-80 million sq ft every year, with the southern city of Bengaluru leading with a massive absorption of 20 million sq ft, followed by NCR and Mumbai. Chennai holds its ground, effectively competing with Hyderabad and Pune. Over the past two years, the city has absorbed 8–9 million sq. ft annually, with similar demand expected this year.

Jerry Kingsley, Head of Value & Risk Advisory, JLL India, highlighted Chennai’s sub-dollar per sq ft rentals as a major draw for Global Capability Centres (GCCs). “While other cities are becoming expensive, Chennai remains affordable. This cost advantage attracts global players,” he said.

Kingsley also noted Tamil Nadu’s economic diversity. Unlike other states, it’s not dependent on one sector. Manufacturing, electronics, EVs, and data centres—especially in Oragadam, Sriperumbudur, and North Chennai are driving growth.”

However, Julian Francis of RMZ offered a counterpoint. “We haven’t gone beyond dollar rentals despite high investments. If a company plans a billion-dollar investment, it will go where returns are higher. That’s why Bengaluru and NCR are seeing more money and talent flow,” he said.

CREDAI Tamil Nadu President WS Habib backed the State’s $1 trillion vision and stressed real estate’s broader role. According to him, “IT parks, logistics, hospitality, and educational infrastructure must develop together with residential or commercial projects.”

The experts think that placing strategic investments into a diversified spectrum of sectors with competitive rentals would increase the stature of Chennai in the Indian commercial real estate domain and would act as a catalyst for the ambitious economic goals of the state of Tamil Nadu.