Embassy REIT, the country’s first publicly listed real estate investment trust, plans to invest about ₹1,700 crore in Chennai over the next three years to more than triple its office portfolio in the city to 5 million sq ft, as demand from expanding global capability centres (GCCs) continues to gather pace.
Embassy REIT entered Chennai last year with the acquisition of the 1.4 million sq ft ‘Embassy Splendid Techzone’, spread over a 24-acre campus, for around ₹1,200 crore.
What did CEO of Embassy REIT say?
“We have started additional construction of three blocks at 1.6 million sq ft. Given the traction, we are launching another 2 million square feet. Overall, the state will be 5 million sq ft operational in the next three years,” Amit Shetty, CEO, Embassy REIT, told FE.
Embassy REIT is the country’s largest office REIT. It owns and operates a 50.8 million sq ft portfolio comprising ten office parks across Bengaluru, Mumbai, Pune, the National Capital Region and Chennai. It also owns and operates four hotels with over 1,100 room keys and a 100 MW solar park. Around 75% of its office portfolio is currently concentrated in Bengaluru, followed by Pune (6.4 million sq ft), Noida (4.6 million sq ft), Mumbai (2 million sq ft) and Chennai.
Embassy REIT is planning to invest over ₹3,700 crore towards a 7.2 million sq ft under-construction pipeline across the country, to be delivered over the next three to four years. “50% of that development pipeline is sitting in Chennai,” Shetty said, adding that Chennai’s share in Embassy REIT’s overall portfolio will rise from 3% to 10% over the next three to four years.
GCCs Fueling Demand for Grade A Spaces
According to Shetty, demand for Grade A office space continues to outpace supply across major cities as GCCs across retail, healthcare, IT, R&D and BFSI increasingly look at India as a key outsourcing destination. About 65% of Embassy REIT’s portfolio is occupied by GCCs and MNCs, with domestic firms accounting for the rest.
“It’s been a robust year for all of us in the office market,” Shetty said, adding that the industry recorded around 82.6 million sq ft of leasing in calendar year 2025, surpassing the previous peak of 74 million sq ft in 2019. “The supply was only 58 million sq ft. There is always a demand-supply mismatch. The vacancies are tighter, the rental rates are growing,” he added.
Record-Breaking Market Performance
India’s office real estate market closed 2025 with its strongest performance on record, clocking net absorption of 61.4 million sq ft across the top eight cities, up 25% year-on-year, according to Cushman & Wakefield’s Q4 MarketBeat report. Bengaluru recorded net absorption of 14.4 million sq ft, followed by Delhi NCR at 10.9 million sq ft. Chennai emerged as a standout, posting a 187% year-on-year jump in net absorption to 7 million sq ft.
“Rentals are always a factor of the demand supply,” Shetty said, adding that Chennai absorbed 9.2 million sq ft against supply of around 5 million sq ft. “We are seeing rental movements as high as 10%,” he said.
Shetty also said SEBI’s classification of REITs as an equity asset class last year has been a key trigger for higher retail investor participation. Retail investor participation in Embassy REIT has risen from about 4,000 at the time of its IPO to 115,000 currently. “In the last 12 months, Embassy REIT has given total returns of 25% to our unit holders,” he added.