CHENNAI: Riding pillion on Tamil Nadu’s target of becoming a one trillion dollar economy, investments are steadily trickling into Chennai and the office space in the city’s heart is in high demand. Corporations from across the globe, which are investing in the state, are vying to secure flexible office space in a short period. This quarter alone (April to June 2024), a total of 0.7 million square feet of office space has been leased out to flexi-space operators, says a CBRE (Coldwell Banker Richard Ellis) report.
“There has been a huge demand for office space in the city, the reason being flexi-space operators occupying as much as 40% of the leased out office space in Chennai alone. This is the next big thing in the realty sector. Global corporations are cutting down on capital expenditure (CAPEX), long-term expenditure on office space, and are looking at operating expenses (OPEX),” says Srinivas Akinipatti, senior director, Tamil Nadu and Kerala, Knight Frank India.
Usually, to set up an office in the city, global corporations have to lease the office space for more than six months before moving in.
The flexi-office space operator, who has leased out the office space from the landlord, provides the global client with office space in 70 to 75 days.
Vaibhav Joshi, executive director at Table Space, a managed office firm which plans to expand its footprint in Chennai, says that there has been a surge in demand from global engineering firms, SaaS companies, and IT businesses to set up their Global Capability Centres (GCCs) in Chennai.
“Table Space has expanded its portfolio in Chennai by almost five times in the past year. We grew from 1,20,000 sq.ft with one asset at KRC Commerzone to 8,00,000 sq.ft across two new properties -- Mapletree Global Infocity Park and DLF Downtown Taramani. This rental commitment is worth approximately `500 crore across all three properties over the next five years. In Chennai, we have over 20 clients that have taken space from us so far,” he added.
Flexi-space operators are targeting two main micro markets in Chennai, one is OMR, the largest micro market of Chennai with approximately 28 million sq.ft and the most preferred micro market for IT companies, and the other is Guindy.
Guindy has only 1.1 million sq.ft of office space, but it is one of the most preferred micro markets.