CHENNAI: Chennai’s aging office stock is emerging as a surprising catalyst for the city’s next wave of commercial real estate growth, as landlords embrace retrofitting as a strategy to revitalise underperforming assets and meet evolving tenant demands.
New analysis from global real estate consultancy CBRE suggests as much as 57 million square feet of outdated office space in Chennai may be ripe for transformation, unlocking a potential investment opportunity valued between Rs 39 billion and Rs 66 billion.
“Retrofitting is a strategic response to enhance long-term asset performance by integrating structural resilience, ESG compliance, and occupier-centric features,” said Anshuman Magazine, CBRE chairman and CEO for India, South-East Asia, Middle East and Africa.
The city’s total office inventory stands at 89 million square feet, with more than half of that now considered past its prime. Retrofitted buildings in core locations could command rental premiums of up to 20%, CBRE noted.
Olympia Group CEO AJ Balaji estimates 50-60% of Chennai’s office space is over a decade old, adding demand for high-quality Grade A offices remains strong.
He told TNIE, “Tenants are demanding enhanced air quality, security, greenery, natural lighting, app-based visitor management, and even sleeping pods. These are no longer luxuries; they’re becoming baseline requirements.”
Potential areas for redevelopment
Old Mahabalipuram Road
Mount Poonamallee High Road
Manapakkam
Pallavaram-Thoraipakkam Radial Road
Ambattur