CHENNAI — Tata Consultancy Services (TCS) has made a significant real estate move by leasing approximately 630,000 sq. ft. of office space at Ozone Techno Park in Chennai’s Navalur suburb. The 10-year lease agreement, secured with a ₹25.5 crore deposit and a monthly rent of ₹2.8 crore, comes when India’s IT sector is witnessing a notable slowdown in office space leasing activity.

While broader IT industry players like Cognizant and Wipro are cutting back on real estate to streamline costs, TCS is doubling its physical infrastructure. According to documents reviewed by real estate data platform Propstack, the lease includes a 12% rental escalation every three years, indicating a long-term strategic commitment to the region.

Raja Seetharaman, co-founder of Propstack, noted that despite the sector’s cautious outlook, leading firms are still investing in office space. “Despite broader economic factors and technological shifts impacting the IT sector, companies continue to commit to significant office spaces, reflecting diverse operational strategies including work from office and regional preferences,” Seetharaman said.

This isn’t TCS’s only large-scale lease in recent times. Last year, the company signed a deal for over 1 million sq. ft. of office space in Hyderabad for a 15-year term. While the lease officially began in October, registration was completed in April.

Meanwhile, several other IT giants are reversing course on office expansion. Cognizant recently sold 600,000 sq. ft. of its Chennai office space on Old Mahabalipuram Road to Bagmane Constructions for ₹612 crore. Wipro has also taken steps to trim its real estate footprint to cut operating costs.

The contrast in strategies highlights a split in the sector. Some firms are consolidating and embracing hybrid or remote models, while others, like TCS, are still investing in traditional office spaces, possibly reflecting a preference for long-term growth, regional hubs, or back-to-office policies.

Despite the uneven activity in the IT space, India’s overall office leasing market remains active. According to CBRE India, gross office leasing in the country reached 18 million sq. ft. in the first quarter of 2025. Notably, Global Capability Centres (GCCs)—offshore arms of multinational corporations—accounted for 45% of the leasing volume, emphasising their growing role in India’s commercial real estate.

In a climate where many tech companies are downsizing or opting for flexible workspace models, TCS’s latest lease signals confidence in the traditional office format and a commitment to continued expansion in India’s southern cities.