Chennai's Old Office Buildings Get a New Lease on Life Through Retrofitting
A new analysis from CBRE suggests that 57 million square feet of outdated office space in Chennai is ripe for transformation, presenting a significant investment opportunity. Retrofitting is seen as a strategic move to enhance asset performance and meet modern tenant demands.
RetrofittingCommercial Real EstateOffice BuildingsChennaiEsg ComplianceReal EstateMay 17, 2025
New analysis from global real estate consultancy CBRE suggests as much as 57 million square feet of outdated office space in Chennai may be ripe for transformation, unlocking a potential investment opportunity valued between Rs 39 billion and Rs 66 billion.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.”
Retrofitting is not just about aesthetics; it involves a comprehensive overhaul to meet modern standards. This includes upgrading electrical and plumbing systems, enhancing energy efficiency, and incorporating smart building technologies. The goal is to create spaces that are not only more attractive to tenants but also more sustainable and cost-effective to operate.
Potential areas for redevelopment include:
- Old Mahabalipuram Road
- Mount Poonamallee High Road
- Manapakkam
- Pallavaram-Thoraipakkam Radial Road
- Ambattur
These areas are ripe for transformation due to their strategic locations and existing infrastructure. Retrofitting can breathe new life into these older buildings, making them competitive with newer developments and attracting a wider range of tenants.
The benefits of retrofitting extend beyond just the property owners. It can have a positive impact on the local economy by creating jobs in construction and related industries, and by boosting the overall appeal of the city as a business hub.
As the demand for high-quality office space continues to grow, retrofitting is emerging as a viable and sustainable solution. By investing in these older buildings, developers can create modern, efficient spaces that meet the needs of today’s tenants while preserving the city’s architectural heritage.
Frequently Asked Questions
What is retrofitting in the context of office buildings?
Retrofitting involves upgrading and modernizing existing office buildings to enhance their performance, efficiency, and appeal. This can include structural improvements, energy efficiency upgrades, and the addition of modern amenities.
How much outdated office space in Chennai is ripe for transformation?
According to CBRE, as much as 57 million square feet of outdated office space in Chennai is ripe for transformation.
What are the potential investment opportunities from retrofitting?
The potential investment opportunity from retrofitting outdated office space in Chennai is valued between Rs 39 billion and Rs 66 billion.
What are some of the key features tenants are demanding in modern office spaces?
Tenants are demanding enhanced air quality, security, greenery, natural lighting, app-based visitor management, and even sleeping pods. These features are becoming baseline requirements rather than luxuries.
What are the potential areas for redevelopment in Chennai?
Potential areas for redevelopment in Chennai include Old Mahabalipuram Road, Mount Poonamallee High Road, Manapakkam, Pallavaram-Thoraipakkam Radial Road, and Ambattur.
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