Chennai’s Grade-A office market is expected to maintain stable occupancy levels of 90.5–91.0% by March 2026. Strong absorption—driven by IT-BPM, engineering, and manufacturing sectors—has offset new supply, with net leasing reaching 4.8 msf in FY2025 and 3.1 msf in Q1 FY2026.
A major share of upcoming supply is concentrated in Pallavaram, which accounts for 50% (~2.5 msf) of the ~5 msf expected in FY2026. The micromarket’s proximity to Chennai International Airport and rising IT/ITES presence have made it a growth hotspot, with 21% of new supply already pre-leased.
Chennai holds 8.5% (~89 msf) of India’s top six cities’ Grade-A office stock, with OMR and South-west corridors comprising 80% of the city’s supply. Tharamani, Perungudi, and Mt. Poonamallee Road contribute 35% of total stock and are expected to maintain low vacancy due to limited new supply and strong demand, according to ICRA’s latest report.
Rental rates in Chennai’s top five micromarkets—Perungudi, Tharamani, Thoraipakkam, Mt. Poonamallee Road, and Guindy—have grown at a CAGR of 3–4% over the past five years. Citywide rentals are projected to rise by a similar margin in FY2026. The top 10 developers control 47% of the Grade-A supply, with eight maintaining occupancy above 90%.
While Chennai’s office market grew at a 5% CAGR between FY2017–2025—slightly below the pan-India average of 7%—its share of national supply is expected to hold steady in FY2026, signaling resilience and sustained demand.
