Chennai records 6.02 million sqft GCC oriented transactions in 2023, BFSI largest occupier, says Knight Frank India

The city has recorded a surge in GCC-oriented office transactions during 2023, totalling 6.02 million sqft across 71 deals, said a report by Knight Frank India. This figure represents a 176 per cent year-on-year (YoY) increase, signifying Chennai’s growing prominence as a preferred destination for GCC operations.

According to the findings of a study conducted by Knight Frank India, of all the GCC deals observed across eight major commercial markets in India during 2023, Chennai accounted for a significant 29 per cent, further solidifying its position in the GCC landscape. This momentum marks a significant leap from the 57 deals recorded in 2022, totalling 2.18 million sqft.

Now in terms of the industry, the report stated that the BFSI (Banking, Financial Services, and Insurance) segment is the frontrunner in GCC-oriented office space transactions. “Despite only 6 deals throughout the year, the BFSI sector contributed over 30 per cent of GCC transactions in Chennai, leasing a substantial 1.89 million sqft in 2023,” it said.

Following closely, the manufacturing sector emerged as the second-largest occupier of GCC business-oriented office space in Chennai’s commercial market, with transactions totalling 1.78 million sqft in 2023. Other service sectors recorded 26 GCC-oriented deals, representing the highest number of transactions during the same period.

Maximum transaction volumes in Q4 2023

In Q4 2023, Chennai experienced a surge in office transaction volume, with a total of 3.3 million sqft from 29 deals. This surge was particularly noteworthy as more than half of the GCC business-oriented transactions for the entire year were recorded during this quarter. This, per the report, can be attributed to the substantial leasing activities by three major occupiers. These transactions accounted for 55 per cent of the overall GCC-oriented transactions during Q4 2023, totalling an area of 1.83 million sqft.

Viral Desai, Senior Executive Director, 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.Tamil Nadu R&D Policy 2022 has meaningfully aided in accentuating GCC investments in the state, especially 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 the market, commanding the highest GCC transacted volumes in the city. 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.”