State Street Leases 2.1 Lakh sq. ft in Coimbatore, Reflecting Rising Demand in South India’s Tier-2 Cities

In a big-ticket boost to the commercial real estate market of Coimbatore, State Street Corporate Services Delhi Private Limited, a unit of global financial services company State Street Corporation, has rented out 2.1 lakh sq. ft of commercial office space in the India Land KGISL Tech Park (CHIL SEZ). The transaction, one of the largest in a tier-2 city this year, has been entered into for 10 years with a rent of ₹1.05 crore per month.

According to documents accessed by data analytics firm Propstack, the office spans four floors in Tower D of the tech park, with India Land Techpark Pvt Ltd acting as the landlord. The lease commenced on April 1, 2025, at a rate of ₹50 per sq ft. The agreement includes a 3% rent escalation in February 2026, followed by 5% annual increases thereafter. A security deposit of ₹7.36 crore was also paid.

The deal signals a growing trend of IT and IT-enabled services (ITeS) firms shifting operations to tier-2 cities like Coimbatore, drawn by lower costs, solid infrastructure, skilled talent pools, and favorable state policies.

The lease adds to a wave of major transactions in Tamil Nadu this year. In March, Tata Consultancy Services leased 6.3 lakh sq. ft in Chennai’s Ozone Techno Park for ₹2.8 crore monthly rent. Earlier in January, Walmart secured 4.6 lakh sq ft in the International Tech Park, Chennai, for ₹3.26 crore. Last August, LTI Mindtree signed a deal for 5.85 lakh sq. ft in Manapakkam, Chennai, at ₹3.98 crore per month.

These developments underline the South’s dominance in India’s commercial real estate market. As per ANAROCK, southern cities dominated the nation in office leasing during 2019-2024 and achieved a 26% average rent increase. Bengaluru witnessed the highest growth (26%), which was followed by Hyderabad (25%) and Chennai (20%).
In comparison, Delhi-NCR reported just 10%.

Of the 283 million sq. ft of new office space added across India’s top seven cities in the past six years, the South accounted for a staggering 61% share about 173 million sq. ft solidifying its leadership in India’s evolving office market.