Chennai Office Market Set for Record 9 Million Sqft Absorption in 2025

Chennai’s commercial office market is poised to close 2025 on a historic high, with leasing activity projected to touch nearly 9 million sqft in gross absorption. This marks a two-decade peak, reflecting robust occupier demand, strategic expansion by multinational companies, and a strong shift toward high-quality Grade-A campuses across both core and peripheral locations.

Over the past nine months, several large deals have shaped the market momentum. Hitachi leased 1.2 lakh sqft, Veli University secured 2.2 lakh sqft, while TCS and LTI Mindtree each took up 6 lakh sqft. Optum also expanded with a 4 lakh sqft commitment, and other major players including Schneider, iEnergizer, and Onward have invested in substantial office space. These transactions highlight Chennai’s growing appeal as a corporate hub.

While central business districts like Guindy continue to attract strong absorption, peripheral business districts (PBDs) such as PTR and MPR are emerging as preferred destinations. Companies seeking large, integrated campuses are increasingly moving to these modern hubs. Developers in these areas have introduced high-quality assets with unique value propositions, including sports arenas, social infrastructure, and advanced amenities, which draw occupiers away from constrained core markets.

Another key factor driving growth is the continued expansion of Global Capability Centres (GCCs). Chennai’s strong talent ecosystem, connectivity, and competitive real estate costs position it as a preferred destination for technology, engineering, and business process management operations compared to peers like Bengaluru and Hyderabad.

Despite limited supply and construction delays, occupier appetite remains strong. The demand-supply imbalance is expected to continue in 2025, with vacancy compression likely as new demand absorbs available stock faster than it can be replenished.

Industry analysts believe Chennai’s commercial office market will remain resilient in the medium term. Sustained GCC demand, modern infrastructure, and amenity-centric developments are expected to keep leasing volumes at record levels, firmly establishing the city as one of India’s most diversified and robust office markets.