Tamil Nadu government identifies land bank for office space development in Chennai
Repreesentative image CHENNAI: Tamil Nadu govt is taking steps to avoid office space crunch in the state and tapping its own land bank in Chennai to build office facilities with private partnerships, a senior govt official said. It has identified 30 locations in Chennai for grade A office space development, said state industries secretary V Arun Roy.
Speaking to TOI, he said a special purpose vehicle between Chennai Metro Rail Limited (CMRL) and TIDCO has identified 30 locations in the city, adjacent to metro stations. “These locations would be developed into commercial space, mostly office space,” he said.
“The incremental office space absorption in the city is higher than supply and govt is unlocking its own land and plans to develop office spaces. Given the current demand scenario, there is a need for ramping up supply,” he said.
Estimates by analysts put Chennai’s gross office space absorption in 2023 at 10.8 million sq ft. They expect a similar momentum this year but a slowdown in 2025 due to shortage of office space.
Earlier, speaking at the GCC Summit, Roy said, global capability centres have become a focus area of investment promotion strategy and the state is inviting existing and new manufacturing players to set up their GCCs here. He said Tamil Nadu has immense potential for GCC operations in Chennai.
The state is witnessing a lot of traction in GCC operations due to incentives and subsidies being offered by the state, he said, adding that the state is open to tweaking the incentive package based on industry inputs.
Arun Roy said while Tamil Nadu tops rankings in most economic parameters, it is behind in global capability centres compared to other cities like Bengaluru, Delhi-NCR, Hyderabad and Pune. “Somewhere we lost out, we need to recognise that,” he said.
A report released at the event by CBRE states that Chennai ranked 3rd in GCC leasing after Bengaluru and Hyderabad from 2022 to September 2024, with 33% of the activity by engineering and manufacturing firms. GCCs are expected to absorb up to 3.2 million sq ft in 2025, slightly higher than current year.
